Ramalingam and Comcare

[2004] AATA 385

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 385

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No A2003/133

GENERAL ADMINISTRATIVE DIVISION		)
Re		SHANKAR RAMALINGAM

Applicant

And COMCARE

Respondent

DECISION

Tribunal Mr M J Sassella, Senior Member

Date16 April 2004

PlaceCanberra

Decision The decision under review is set aside and the tribunal substitutes its own decision that the applicant is entitled to compensation in accordance with s 14(1) of the Safety, Rehabilitation and Compensation Act 1988.

[sgd] M J Sassella

Senior Member

CATCHWORDS

WORKERS' COMPENSATION – applicant has compensable injury in the nature of adjustment disorder – applicant’s employment made material contribution to onset of adjustment disorder – workplace events affecting applicant predominantly not disciplinary action – applicant not precluded for payment of compensation because injury caused by reasonable disciplinary action

Safety, Rehabilitation and Compensation Act 1988 ss 4(1)(“aggravation”, “ailment”, “disease”, “injury”), 7(4)(a), (6), 14(1), 16, 19

Public Service Act 1999 ss 13, 15, 29(3)

Casarotto v Australian Postal Commission (1989) 86 ALR 399

Wiegand v Comcare Australia (2002) 72 ALD 795

Re Harper and Commonwealth of Australia (1989) 17 ALD 569

Re Pandos and Commonwealth of Australia (1991) 22 ALD 784

Re To Nga Quach and Australian Postal Corporation (1991) 22 ALD 79

Re Choo and Comcare (1995) 39 ALD 399

Re Bennett and Comcare (1992) 17 AAR 18

Re Quarry and Comcare (1997) 47 ALD 113

Re Arthur and Comcare [2004] AATA 241

Commission for the Safety, Rehabilitation and Compensation for Commonwealth Employees v Chenhall (1992) 37 FCR 75

Re Sheridan and Comcare (1999) 61 ALD 318

Re Battye and Comcare [2000] AATA 18

Re Sloane and Comcare (AAT 11512, 20 December 1996)

Re Tan and Comcare (AAT 12209, 15 September 1997)

Re Wierbicki and Comcare [1999] AATA 123. 

Re Friedlos and Comcare [1998] AATA 249

Re Mitsopoulos and Comcare (1999) 55 ALD 608

REASONS FOR DECISION

16 April 2004 Mr M J Sassella, Senior Member

RESULT

The tribunal has decided that Mr Ramalingam qualifies for payment of compensation in accordance with s 14(1) of the Act. However, in order to receive any compensation payments he will have to be found by a decision-maker to qualify for payment of particular forms of compensation. For example, he may qualify for weekly incapacity payments under s 19 of the Act if he satisfies the requirements of that section. As another example, he may apply for compensation for medical expenses under s 16 of the Act if he can satisfy the requirements of that section.

BACKGROUND

1.      Mr Shankar Ramalingam (“the applicant”), born 12 December 1957, commenced working at the Australian Agency for International Development (“AusAID”) on 26 March 2001.  On 29 May 2002 AusAID terminated Mr Ramalingam’s employment because it was alleged that he had failed to treat supervisors with respect and courtesy and he had failed to follow directions.  On 31 May 2002 Mr Ramalingam completed a claim form for compensation under the Safety, Rehabilitation and Compensation Act 1988 (“the Act”)[1] claiming anxiety, insomnia and depression caused by workplace stress.  On 19 August 2002 Comcare (“the respondent”) rejected the claim.  Mr Ramalingam sought reconsideration of that decision.  On 7 April 2003 Comcare issued its decision post the reconsideration affirming the earlier decision to deny liability.  This was a decision reviewable by the Administrative Appeals Tribunal (“the tribunal”).  Mr Ramalingam applied to the tribunal for review of the decision on 11 April 2003.

[1] Mr Ramalingam must have suffered an injury, as defined in s 4(1) of the Act, if he is to receive any compensation under the Act. An injury is defined in s4(1) as:

(a) a disease suffered by an employee; or

(b) an injury (other than a disease) suffered by an employee, being a physical or mental injury arising out of, or in the course of, the employee's employment; or

(c) an aggravation of a physical or mental injury (other than a disease) suffered by an employee (whether or not that injury arose out of, or in the course of, the employee's employment), being an aggravation that arose out of, or in the course of, that employment;

but does not include any such disease, injury or aggravation suffered by an employee as a result of reasonable disciplinary action taken against the employee or failure by the employee to obtain a promotion, transfer or benefit in connection with his or her employment;

3. In Mr Ramalingam’s case he has claimed in respect of diseases (anxiety, insomnia, depression). Where a disease is involved it must satisfy the definition of a disease in s 4(1):

disease means:

(a) any ailment suffered by an employee; or

(b) the aggravation of any such ailment;

being an ailment or an aggravation that was contributed to in a material degree by the employee's employment by the Commonwealth or a licensed corporation;

4. The definition of a disease refers to an ailment and an aggravation as relevant concepts. These are defined also in s 4(1):

aggravation includes acceleration or recurrence;

ailment means any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development);

5. An aggravation may also be present where the conditions set out in s 7(6) of the Act are met:

(6) An incapacity for work or impairment of an employee shall be taken, for the purposes of this Act, to have resulted from a disease, or an aggravation of a disease, if, but for that disease or aggravation, as the case may be:

(a) the incapacity or impairment would not have occurred;

(b) the incapacity would have commenced, or the impairment would have occurred, at a significantly later time; or

(c) the extent of the incapacity or impairment would have been significantly less.

6. If an injury is present then s 14(1) of the Act provides that Comcare is liable to pay compensation to the employee:

Compensation for injuries

14. (1) Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment.

7.      On the question of whether Mr Ramalingam bears an onus of proof, Hill J in the Federal Court summarised the position in Casarotto v Australian Postal Commission (1989) 86 ALR 399, 412-413. His conclusion was that in a practical sense, if not in a strict legal sense, it will be the responsibility of an applicant for review to ensure that there is laid before the tribunal all material which it will be necessary for the tribunal to have before it to enable it to come to a decision. Where material necessary to an applicant's case is not laid before the tribunal the applicant will not be able to complain if the tribunal, doing the best it can with the evidence before it, reaches a conclusion which is adverse to the applicant. In the present case it is in Mr Ramalingam’s interests to convince the tribunal that he should receive his compensation.

8. At the same time it is Comcare’s position that Mr Ramalingam suffered no injury under the Act, even if he contracted anxiety, insomnia or depression because of his employment, because any such condition arose from reasonable disciplinary action on AusAID’s part. It will be in Comcare’s interests to ensure that the tribunal is satisfied on this point.

9.      The issues that arise are, therefore:

(a)Does Mr Ramalingam suffer from an ailment as defined in s 4(1) of the Act?

(b)If Mr Ramalingam suffers from an ailment did his employment contribute in a material degree to the ailment or its aggravation?

(c)If the answer to (b) is yes, is Mr Ramalingam precluded from compensation because his injury was a result of reasonable disciplinary action taken towards him?

FINDINGS ON MATERIAL QUESTIONS OF FACT WITH REFERENCE TO THE EVIDENCE AND OTHER MATERIAL IN SUPPORT OF THOSE FINDINGS

(a) Does Mr Ramalingam suffer from an ailment as defined in s 4(1) of the Act?

10.     Dr S Rosenman, a psychiatrist, wrote on 13 May 2002 to Mr Ramalingam’s general practitioner saying that Mr Ramalingam had an “adjustment reaction”.  On 24 December 2002 Dr Rosenman wrote again to the general practitioner stating that Mr Ramalingam was suffering from adjustment disorder.  In oral evidence Dr Rosenman confirmed his diagnosis of an adjustment disorder.  The authoritative diagnostic manual, the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders (4^th ed, 1995) (“DSM-IV”), recognises no condition known as an adjustment reaction.  I see little hinging on that, however, as it is clear that Dr Rosenman saw Mr Ramalingam as suffering from an adjustment disorder.

11.     Dr J Saboisky, a psychiatrist who provided several reports for Comcare, initially diagnosed Mr Ramalingam as suffering from an adjustment disorder with anxious and depressed mood.  However, he was provided with additional documentation describing Mr Ramalingam’s conduct in the workplace and he decided that he preferred the diagnosis of a personality disorder with mixed obsessional and paranoid features. 

12. Ms Walker, counsel for Comcare, pressed me to prefer Dr Saboisky’s diagnosis and made several follow-up submissions regarding the personality disorder. These included that it was Mr Ramalingam’s personality that caused the problems in the workplace rather than Mr Ramalingam’s condition being caused by the workplace. Mr Ramalingam’s reaction was what one would expect from a person with Mr Ramalingam’s personality type. The disorder was not aggravated. Ms Walker also submitted that a personality disorder is not a disease under the Act. She relied on DSM-IV for this. My research into DSM-IV did not assist me to resolve this point. DSM-IV does not tend to discuss in terms of disease or not-disease. Its aims are to assist psychiatrists to identify the problems afflicting their patients and then deal with those problems. DSM-IV addresses personality disorders in much the same way as it addresses psychiatric conditions that are undoubtedly medical conditions.

13.     Relying on DSM-IV, and with all due respect to Dr Saboisky whose frequent evidence before this tribunal is often accepted by the tribunal, it is not a simple matter to find the Mr Ramalingam’s condition is “only” a personality disorder.  At page 647 of DSM-IV the editors describe a personality disorder as “an enduring pattern of inner experience and behaviour that deviates markedly from the expectations of the individual’s culture, is pervasive and inflexible, has an onset in adolescence or early adulthood, is stable over time, and leads to distress and impairment”.  At page 648 the editors state that a diagnosis of personality disorder “requires an evaluation of the individual’s long-term patterns of functioning, and the particular personality features must be evident by early childhood.”  The general diagnostic criteria for personality disorder are set out as follows on page 651:

“…

A.An enduring pattern of inner experience and behaviour that deviates markedly from the expectations of the individual’s culture.  This pattern is manifested in two (or more) of the following areas:

(1)cognition (ie ways of perceiving and interpreting self, other people, and events)

(2)affectivity (i.e., the range, intensity, lability, and appropriateness of emotional response)

(3)interpersonal functioning

(4)impulse control

B.The enduring pattern is inflexible and pervasive across a broad range of personal and social situations.

C.The enduring pattern leads to clinically significant distress or impairment in social, occupational, or other important areas of functioning.

D.The pattern is stable and of long duration and its onset can be traced back at least to adolescence or early childhood.

E.The enduring pattern is not better accounted for as a manifestation or consequence of another mental disorder.

F.The enduring pattern is not due to the direct physiological effects of a substance (e.g., a drug of abuse, a medication) or a general medical condition (e.g., head trauma).

…”

14.     There is little evidence before me relating to criteria B or D.  We simply do not know the history of Mr Ramalingam’s interactions in his non-work environments.  We have no evidence on his personality traits as at childhood or adolescence.  Dr Saboisky cited a number of matters that led him to diagnose a personality disorder.  These included, in his report of 19 September 2003:

(a)Supervisors at AusAID referred to Mr Ramalingam’s very difficult personality.  He was uncooperative and had little regard for his supervisors and team members.

(b)Mr Ramalingam had a very limited interaction with people in the workplace. 

(c)Mr Ramalingam generated a hostile environment at work.

(d)Mr Ramalingam refused to accept any constructive advice on how to improve his performance. 

(e)Mr Ramalingam refused to carry out basic financial responsibilities that he had been specifically selected and directed to perform. 

Dr Saboisky wrote that he had no reason to doubt the veracity of the statements made by Mr Ramalingam’s supervisors and those statements “completely reinforce my clinical judgement that he has a personality disorder with mixed obsessional and paranoid features”.  The difficulties Mr Ramalingam experienced in the workplace were as a direct result of his underlying personality traits.

15.     In his oral evidence Dr Saboisky pointed to the consistency in the way in which Mr Ramalingam’s different supervisors perceived Mr Ramalingam.  Dr Saboisky indicated his appreciation that Mr Ramalingam accepted absolutely no responsibility for any of his work-related problems.  He projected blame onto others despite there being good evidence that he had generated a hostile environment and displayed a very combative nature in the workplace.  Dr Saboisky pointed to the clinical impression gained from seeing Mr Ramalingam, the contents of the T documents and the supervisors’ reports as the sources of his views.  Further indicia of a personality disorder were said to be his combative and suspicious nature, his procrastination, his refusal to accept constructive advice, his accusations that AusAID management were corrupt and dishonest.  He was seen as quick to take offence and counterattack.  He was rigid, critical of others, unable to collaborate. 

16.     Dr Saboisky agreed that he had relied very heavily on Mr Ramalingam’s presentation when he saw Dr Saboisky and on the supervisors’ reports in forming the view that it would be very hard to believe that there was not a life history of the sort required by DSM-IV for the existence of a personality disorder.

17.     Dr Saboisky told the tribunal that he no longer thought Mr Ramalingam had an adjustment disorder.  He relied on DSM-IV at page 643:

“Adjustment Disorder is a residual category used to describe presentations that are a response to an identifiable stressor and that do not meet the criteria for another specific Axis I disorder.  For example, if an individual has symptoms that meet criteria for a Major Depressive Episode in response to a stressor, the diagnosis of Adjustment Disorder is not applicable.  Adjustment Disorder can be diagnosed in addition to another Axis I disorder only if the latter does not account for the particular symptoms that occur in reaction to the stressor …

“Because Personality Disorders are frequently exacerbated by stress, the additional diagnosis of Adjustment Disorder is usually not made.  However, if symptoms that are not characteristic of the Personality Disorder appear in response to the stressor (e.g., a person with a Paranoid Personality Disorder develops depressed mood in response to job loss), the additional diagnosis of Adjustment Disorder may be appropriate.”

Thus, if the individual’s response to a stressor is in keeping with the attributes of his or her personality disorder a diagnosis of adjustment disorder is not made.  Dr Saboisky saw Mr Ramalingam’s personality disorder as having mixed obsessional and paranoid features.  He saw Mr Ramalingam’s reactions to his work problems as indicative of obsessional and paranoid traits. 

18.     Asked whether events in his workplace aggravated Mr Ramalingam’s underlying personality disorder Dr Saboisky said that the abnormality was in the reaction rather than the environment.  He considered that Mr Ramalingam’s supervisors acted reasonably but Mr Ramalingam’s perception was that he was ill-treated.  “He turned up and he didn’t get what he wanted”. 

19.     I found much of Dr Saboisky’s evidence compelling and convincing, but I was and remain troubled by the diagnosis of a personality disorder when two of the central requirements in DSM-IV for such a diagnosis were not the subject of evidence before me.  There was no affirmative evidence of an enduring pattern that was inflexible and pervasive across a broad range of personal and social situations, nor of a pattern that was stable and of long duration with an onset that could be traced back at least to adolescence or early childhood.

20. In these circumstances I find that Mr Ramalingam suffers from an adjustment disorder. I consider that the evidence is stronger for that diagnosis and that such a diagnosis conforms to the approach in DSM-IV discussed in [17]. The answer in relation to issue (a), then, is that Mr Ramalingam has an ailment.

(b) If Mr Ramalingam suffers from an ailment did his employment contribute in a material degree to the ailment or its aggravation?

21.     This case echoes Wiegand v Comcare Australia (2002) 72 ALD 795 in which the employee, a worker in the Australian Tax Office (“ATO”), had work complaints and problems. They were addressed by the ATO but Mr Wiegand's attitude was that they had not been properly dealt with. There was evidence that Mr Wiegand had a major depressive disorder and obsessive-compulsive personality traits. Comcare’s view was that it was Mr Wiegand’s adverse perceptions of the ATO’s dealings with his concerns that resulted in his condition rather than his employment. The argument was basically perception versus reality.

22.     Von Doussa J in the Federal Court set aside the tribunal’s decision that Mr Wiegand’s condition could not materially be attributed to his work for the ATO.  His Honour was influenced by the tribunal’s acceptance of evidence that the matters Mr Wiegand complained of had actually occurred.  He then noted that it was the reasonableness of Mr Wiegand’s interpretations of events and his perceptions about them that the respondent put in question.  Von Doussa J noted that Mr Wiegand’s difficulties were only partially attributable to his work.  The predominant factor in his depressive disorder was his basic personality.  At pages 795-796 His Honour endorsed the following propositions:

·     There can be more than a single real cause of an employee’s condition.  From this it flows that the workers’ compensation insurer can be liable if employment was one of several causes provided it made a “material contribution” to the claimed condition or injury.

·     An employee can receive compensation if he or she reacts badly to stressors because of a vulnerability personal to him or her even if a “normal” employee would not so react.  This is an application of the “egg shell skull” rule known in the law of torts.  Its application in workers’ compensation is to be expected given that the workers’ compensation system is not based on an employee having to prove fault in the employer.  It is a no-fault scheme.

·     The relevant question is whether a stressor or stressors to which the employee was vulnerable happened and whether that happening was contributed to in a material degree by the employment.

·     A perception held by an employee will meet a “reality” test for the purposes of the definition of disease if it is a perception about an incident or state of affairs that actually happened. 

·     Compensation is not payable where a neurotic employee wrongly believes that his or her leg pain arose out of his or her work.

His Honour summarised the position in paragraph 31 at page 797:

“[T]here is no requirement at law that the interpretation placed on the incident or state of affairs by the employee, or the employee’s perception of it, is one which passes some qualitative test based on an objective measure of reasonableness.  If the incident or state of affairs actually occurred, and created a perception in the mind of the employee (whether reasonable or unreasonable in the thinking of others) and the perception contributed in a material degree to an aggravation of the employee’s ailment, the requirements of the definition of disease are fulfilled.”

23.     The events of which Mr Ramalingam complained were set out by him in a list sent to the tribunal by e-mail on 15 January 2004.  The list is long:

“…

1.Being undermined and discriminated against.

2.Being setup [sic] about a poor working relationship with Ms Strunks with no evidence or incidents being given.

3.Relentlessly badgered to improve working relationship with Ms Strunks knowing full well she is in gross violation of the [AusAID] Certified Agreement with her flex sheets.

4.Continuously pressurised to sign [Ms Strunks’] flex sheets.

5.The performance discussion in September with Ms Websdane and Mr Jensen.  Being given an inaccurate record of discussion one month after, and having to set the record right.

6.Ms Strunks being allowed to go on leave on 4^th Dec over a period of 3 weeks without notifying me and my struggle to send off the salaries as well as do her work.

7.The Performance Planning Review meeting held on Dec 17^th.

8.Refusal to grant leave due to stress.

9.Minute stating due to my sickness I have put the whole sections [sic] operations out of gear.

10.Forced to share a terminal with Ms Strunks and work.  Unable to keep my password confidential.

11.My pay being cut.

12.After reporting about the bank reconciliations being out of order for hundreds of millions of dollars, being pressurised to do the investigations and extensive reconciliations myself.

13.Formal counselling session held on 29^th March 2002, wherein matters discussed could have been easily done informally.

14.My report to the [Director-General] on the 18^th April 2002 on the bank reconciliations. Though he replied on the same day he did not call me and explain the steps he had taken for my protection as per the Public Service ACT [sic] and Regulations. Instead he did exactly the opposite by allowing a misconduct inquiry 4 days later ion [sic] 22^nd April.

15.The way the investigating officer behaved towards me in the morning before the misconduct investigation.

16.The way the whole investigation was done.

17.The investigating officers [sic] report recommending termination.

18.As I was sick requesting Mr. Tapp the ADG RES, further time for my response, till I was fit enough for such an important task.  Mr Tapp’s refusal to wait till my health permits, giving only a week more than the original 2 weeks.  As a result only a very sketchy response was given.  Unable to consult lawyers.

19.Mr Tapps [sic] letter of termination, hand delivered and rushed to me 2 days after my response was given.

20.The contents of the letter which was done in a way that gave me the impression that persons [sic] livelihood is of no consequence.

…”

24.     Applying the principles derived from Wiegand [22], it can be said that Mr Ramalingam reacted badly to stressors because of a vulnerability personal to him and in a way that would not be replicated in a normal employee. The items in Mr Ramalingam’s list in [23] fall into several categories:

(a)His interpretation of management’s intentions in its dealings with him: items 1, 2, 6, 8, 9, 12, 14, 15, 16.

(b)His objection to being required to do certain things by management: items 3, 4, 10.

(c)His objections to performance discussions: items 5, 7.

(d)His objections to disciplinary action taken against him: items 11, 13, 17, 18, 19, 20.

My perception is that Mr Ramalingam’s interpretations of the purposes behind the matters in categories (a), (b) and (c) were unreasonable.  Category (d) is in a class by itself.  It was clear during the hearing that Mr Ramalingam’s perceptions of what was occurring in relation to the category (a) – (c) items caused him stress, even though a normal employee would not have been affected in the same way.  There were events that occurred in the workplace that were the basis of these items as construed by Mr Ramalingam.  That, as I read the decision of the court in Wiegand, is sufficient for the workplace to have contributed in a material way to the onset or aggravation of Mr Ramalingam’s disease. 

25.     As regards the category (d) items, these were disciplinary matters several of which would be likely to cause upset to anyone affected by them. 

26.     I find, therefore, that the answer to issue (b) is yes, that Mr Ramalingam’s employment made a material contribution to his adjustment reaction either because it precipitated it or because it aggravated a pre-existing condition, more likely the former.

(c) If the answer to (b) is yes, is Mr Ramalingam precluded from compensation because his injury was a result of reasonable disciplinary action taken towards him?

27.     There is considerable authority on the concept of “disciplinary action”.  The tribunal in its earlier decisions required a disciplinary outcome such as the imposition of a penalty before action could be seen as disciplinary (see Re Harper and Commonwealth of Australia (1989) 17 ALD 569, Re Pandos and Commonwealth of Australia (1991) 22 ALD 784 and Re To Nga Quach and Australian Postal Corporation (1991) 22 ALD 792). This interpretation tended to favour an employee because it would apply in fewer circumstances than a broader understanding of the concept. Such a broader understanding might mean that action is disciplinary even if there is no sanction or penalty applied. I can understand why the tribunal in the cited cases took this route. The Act is beneficial legislation which, where there is ambiguity, might be expected to be interpreted in the employee’s favour.

28.     However, in 1992 the Federal Court (Cooper J) considered the matter in Commission for the Safety, Rehabilitation and Compensation for Commonwealth Employees v Chenhall (1992) 37 FCR 75. Cooper J held at page 83 that the phrase, “disciplinary action” means no more than “reasonable action lawfully taken against an employee in the nature of or to promote discipline”. Cooper J enlarged on this. He saw “the relevant discipline” as constituted by “the body of duties and such rules of conduct or behaviour as are applicable to and enforceable against the employee by virtue of his or her employment by the Commonwealth”. In the present case this refers to the Public Service Act (including its Code of Conduct) and the AusAID certified agreement.

29. Cooper J emphasised that it must be the disciplinary action itself, and not “the steps anterior to the decision to take such action” which is covered in the Act. “Thus, action taken to determine whether or not disciplinary action will be taken against an employee, although it may be characterised as part of a system or process to maintain discipline, is not action within the meaning … in the Act” (page 84).

30.     Cooper J then identified what may be lawful disciplinary action.  This depends on the nature of the duties, the rules of conduct or behaviour and the means provided by statute or at common law to enforce them.  He posed three questions to be answered in a case such as this:

(a)What discipline or rules of conduct apply to an employee of the Commonwealth?

(b)In what circumstances can the Commonwealth as an employer take action of a disciplinary nature to enforce the discipline or rules of conduct against the employee?

(c)What type of action may the Commonwealth take against an employee if the circumstances giving occasion to the taking of disciplinary action exist?

31.     The answers to these questions will determine whether any particular conduct is or is not disciplinary action. 

32.     The core of Cooper J’s analysis is that the emphasis is not on the imposition of a sanction or penalty.  It is whether action that can be regarded as disciplinary in accordance with the rules that apply in the particular Commonwealth workplace has been taken.  In one workplace disciplinary action may have to result in a penalty to be termed disciplinary.  In others the action may be disciplinary where the rules require no more than a finding that there are reasonable grounds to believe that an employee has breached, or may have breached, or may in the future breach, any duty he or she owes, or may breach a code of conduct or rules of behaviour without any requirement that misconduct be proven. 

33.     Since Chenhall [28] above the principles enunciated by Cooper J have been applied in other decisions. In one, Re Choo and Comcare (1995) 39 ALD 399, the tribunal omitted any reference to Chenhall, but this was unusual.  The later cases provide some examples regarding what is and is not disciplinary action.  In Re Bennett and Comcare (1992) 17 AAR 18 the tribunal dealt with an employee employed by the Australian Bureau of Statistics (“ABS”). In 1988 he was notified that his efficiency would be assessed under the ABS policy guidelines for inefficiency introduced in 1986. The assessment ran for three months from mid-September. He was found to be inefficient. His employment was terminated from 8 August 1989. The tribunal found that the employee suffered from stress and hypertension which were aggravated during the assessment process. The tribunal addressed Cooper J’s three questions in [30] above. It found the applicable rules on disciplinary action in the Public Service Act as it then was and the ABS manual of personnel management.

34.     That tribunal found that neither the employee nor his managers during the assessment process understood themselves to be engaged in a disciplinary exercise.  The employee was served with a warning requiring him to sustain an acceptable standard of work performance for an ASO 1 officer.  The person issuing that notice understood that the procedures were invoked compassionately to counsel the employee about his work performance, to give him encouragement to improve and to find out whether there were medical factors.  It was not issued to punish the employee.  This was regarded in Chenhall terms as action taken to determine whether or not disciplinary action would be taken against the employee.

35. On the other hand the tribunal found that the retirement of the employee under the Public Service Act, while not provided for in the disciplinary provisions of that Act, was disciplinary action within the meaning of s 4(1) of the Act. It was described by the tribunal as action taken by the ABS to enforce the disciplinary regime as far as it concerned the employee. I take the crucial point to be that this was action depriving Mr Bennett of a job because of his inefficiency. The retirement was found to be reasonable action. Mr Bennett was compensated only for the assessment period.

36.     In Re Quarry and Comcare (1997) 47 ALD 113 the tribunal applied Chenhall [28]. The employee was required by her managers at a meeting to undergo a competency needs analysis. She was upset by this requirement, left the premises and did not return to work for some weeks. She suffered an adjustment disorder as a consequence. Prior to the managers’ meeting there had been several counselling sessions. The tribunal surveyed the remedies open to management in the Public Service Act. It looked also at the matters now found in the Code of Conduct in the Public Service Act 1999 which it thought were in departmental policy documents.  In fact they were at the relevant time in the Public Service Regulations.  The tribunal referred to the relevant department’s personnel management manual.  The tribunal then considered the grounds on which the agency could take disciplinary action. 

37. However, at the end of the process the tribunal decided that, when the employee left work, no decision had been made whether to take action in relation to the employee on the basis of inefficiency, inability to perform her duties, medical incapacity, being an excess officer, or failing to fulfil her duty as an officer. The managers at the relevant time were still dealing with her compassionately. The tribunal regarded the counselling sessions as preliminary discussions at a stage when the managers were seeking both to assist her and to assess what action was appropriate. The actions were not disciplinary action. They were actions taken to determine whether or not disciplinary action would be taken in relation to the employee. There was, therefore, an injury under the Act.

38.     In the present case the answer to the first of Cooper J’s questions in [30], “What discipline or rules of conduct apply to an employee of the Commonwealth?” is:

·     The Public Service Act 1999. Section 13 of that Act requires an APS employee, which Mr Ramalingam was at all relevant times, to abide by the Code of Conduct appearing in that section. Section 15 permits an agency head to impose six types of sanction where an APS employee has breached the Code of Conduct. These are termination of employment, reduction in classification, reassignment of duties, reduction in salary, deductions from salary by way of fines and a reprimand. Section 15(3) requires an agency head to establish procedures for determining whether an APS employee in the agency has breached the Code of Conduct. In cases of underperformance or inefficiency s 29(3) might be applied to allow the agency head to terminate an employee’s employment.

·     The AusAID certified agreement.  Clauses 22 and 23 of the AusAID Certified Agreement 2000-2003 were relevant.  Clause 22 deals with managing unsatisfactory performance.  The model it endorses is a cascade whereby the steps are: (i) normal supervisory performance feedback, (ii) provision of personnel development training; (iii) counselling of the employee regarding aspects of work deemed unsatisfactory by the supervisor, the unsatisfactory performance is documented and the employee advised that a formal review period which could lead to action by the Director-General under clause 22.10 if there is no improvement will commence in two weeks; (iv) formal recorded counselling after two weeks of unimproved performance which leads to a formal six-week performance review period; (v) assessment of performance during the review period at the close of the six weeks; (vi) the supervisor makes a recommendation that might be favourable or unfavourable to the Director-General; (vii) the employee has seven days in which to make a written submission to the Director-General; (viii) the Director-General can decide under clause 22.10 to take no further action, or to impose a further performance review period of no more than two months, or to reduce the employee’s classification, or to terminate the employment of the employee.  The last two of these sanctions are suggestive of disciplinary action.  There are review rights signalled in the agreement. 

·     The certified agreement also provides in clause 23 for procedures to apply where it is alleged that an employee has breached the APS Code of Conduct, as was alleged in Mr Ramalingam’s case. These are redolent of disciplinary action. Clause 23 contemplates the appointment of an investigating officer (“IO”) to investigate the allegation. The IO determines whether, on the balance of probabilities, a breach has occurred and the IO recommends a sanction, if appropriate. The IO makes a written report to a senior executive in AusAID with a copy to the employee. The senior executive reads the IO’s report and decides whether a breach has occurred and whether the recommended sanction is appropriate. The employee has an opportunity to put his or her views. Any sanction is imposed by the senior executive after receipt of any statement from the employee. Possible sanctions are termination of employment, reduction in classification, reassignment of duties, reduction in salary, deductions from salary in the nature of a fine, or a reprimand. There are specific provisions relating to conviction for a criminal offence and relating to suspension. This would appear to be the set of disciplinary procedures within AusAID as required by s 15(3) of the Public Service Act.

·     There was an AusAID document, Inefficiency Procedures – Supervisor Instructions, but the tribunal had no evidence before it regarding that document. 

AusAID clearly had access to a full range of disciplinary and performance management processes on the basis of the Public Service Act and the certified agreement. As noted above, in certain respects the performance management process agreed industrially between management and employees in AusAID have a disciplinary aspect. Not all such clauses in certified agreements. See Re Arthur and Comcare [2004] AATA 241 for a recent example of a certified agreement, that in Comsuper, where the performance management and disciplinary clauses were rigidly separated.

39. Cooper J’s second question, “In what circumstances can the Commonwealth as an employer take action of a disciplinary nature to enforce the discipline or rules of conduct against the employee?”, is answered by reference to the Public Service Act. Action can be taken under s 29(3) of the Public Service Act 1999 where there is a breach of the Code of Conduct, or where an employee is excess to requirements, or lacks or has lost an essential qualification, or for unsatisfactory performance of duties, or because of inability to perform duties because of physical or mental incapacity, or for failure to complete an entry-level training course, or for failure to meet a condition (eg becoming an Australian citizen) imposed under s 22(6) of that Act, or for any other reason prescribed by regulations.

40. In the present case AusAID took action against Mr Ramalingam for alleged breaches of the Code of Conduct. This was one of the circumstances where the Public Service Act permits disciplinary action.

41. Cooper J’s third question, “What type of action may the Commonwealth take against an employee if the circumstances giving occasion to the taking of disciplinary action exist?”, is answered also by reference to the Public Service Act. The Commonwealth can take the actions in [38, bullet point one]. These actions were replicated in the certified agreement in Mr Ramalingam’s case.

42. Applying these principles I note that some of the actions taken by AusAID involving Mr Ramalingam were disciplinary and some were not. Those that were not, if they contributed to the onset of his adjustment disorder, were not reasonable disciplinary action and so cannot operate to prevent a decision-maker from finding that an injury has occurred under s 4(1) of the Act.

43. An issue raised several times during the hearing was the date of onset of any adjustment disorder. Mr Ramalingam argued that the date of onset of the disease, a disease he saw as compensable under the Act, was 25 January 2002. Dr Hope’s notes (Dr Hope being the general practitioner) included an entry on that date, “work stresses, headache/dizziness one to two months”. Section 7(4)(a) of the Act provides that an employee is taken to have sustained “an injury, being a disease, or an aggravation of a disease, on the day when … the employee first sought medical treatment for the disease, or aggravation …”.

44.     DSM-IV states at page 641 that the essential feature of an adjustment disorder is the development of clinically significant emotional and behavioural symptoms in response to an identifiable psychosocial stressor or stressors.  DSM-IV recognises subtypes of adjustment disorder which include “unspecified”, a category used for “maladaptive reactions” exemplified by physical complaints.  I am satisfied that the work stresses were the psychosocial stressors in Mr Ramalingam’s case and that the complaints of headache and dizziness were specific symptoms of his adjustment disorder.  I therefore find that the injury occurred on 25 January 2002, the day when Mr Ramalingam first sought medical treatment for the disease.

45.     Mr Ramalingam does not seem to have taken much time off work for health reasons in the early part of 2002.  The tribunal documents show medical certificates for time off work around 25 January 2002 and a few days around 8 February 2002.  He had a medical certificate for four days off in April 2002 and for 21 May to 4 June 2002.  He was terminated on 29 May 2002.

46.     In view of Chenhall [28] it is necessary to see whether what affected Mr Ramalingam at work up to 25 January 2002 was disciplinary action.  The main relevant events were:

·     17 May 2001: A session between Mr Ramalingam and Ms F Websdane, then Manager of the Financial Systems and Accounts Unit in AusAID.  The problems included discourtesy in the form of interrupting Ms Websdane when she was talking to another person, procrastination and Mr Ramalingam’s reluctance to take ownership of his responsibilities.  He also missed a section meeting.  I do not see this as disciplinary action.  In the terms of clause 22 of the certified agreement it was normal supervisory performance feedback.

·     2 August 2001: Another session involving Mr Ramalingam and Ms Websdane.  Ms Websdane raised with Mr Ramalingam his need to be aware of the issues and concerns of his staff and to resolve ongoing disputes with the finance officer.  He was told he needed to be more accurate in figures and calculations.  He was told he needed to fulfil the courtesy and timeliness standards in the service charter.  He was told he needed to demonstrate lateral thinking   Again the issues of accepting personal responsibility and attending at meetings were raised.  The need for adherence to security requirements was mentioned.  He was told to take on month-end reconciliations.  He was told his performance would be reviewed in two weeks time.  This seems to have been an activation of the third step in the certified performance management process, ie “counselling of the employee regarding aspects of work deemed unsatisfactory by the supervisor, the unsatisfactory performance being documented and the employee advised that a formal review period which could lead to action by the Director-General under clause 22.10 if there is no improvement to commence in two weeks”.  If it was this part of the process it was not implemented according to the letter but it does seem to accord with the substance of the agreement process.

·     12 September 2001: A “formal” performance discussion with Mr Ramalingam was held by Ms Websdane with Mr P Jensen, the Director, in attendance.  This was a follow-up to the 2 August meeting.  Mr Ramalingam was told his accuracy had improved and that he had taken greater responsibility in supervising staff by collating flex sheets.  However, a number of problems were cited.  These included staff downtime where Mr Ramalingam’s staff had been underutilised, unequal workloads carried by different members of Mr Ramalingam’s staff, communication problems, Mr Ramalingam taking flex leave with little notice, a poor working relationship between Mr Ramalingam and Ms D Strunks, his finance officer and the need for vigilance in avoiding security breaches.  Agreement was reached between Mr Ramalingam and Ms Websdane regarding how certain functions would be carried out in future.  Although termed “formal”, this discussion seems to have had the same status as a performance improvement device within the certified agreement as that on 2 August.  It does not seem to have gone to either of the next two steps which were the unsatisfactory performance documented and the employee advised that a formal review period which could lead to action by the Director-General under clause 22.10 if there is no improvement to commence in two weeks; and formal recorded counselling after two weeks of unimproved performance leading to a formal six-week performance review period. 

·     3 December 2001: A meeting was held involving Ms V Kuenne, Manager of the AusAID Financial Systems and Accounts Unit from October 2001, Ms Strunks, another officer and Mr Ramalingam.  The purpose was to resolve issues surrounding excess flex leave credits accumulated by Ms Strunks.  Mr Ramalingam was Ms Strunks’ supervisor and was to sign her flex sheets.  He had refused because he did not approve of her having accumulated all the flex leave she had.  Mr Ramalingam walked out of the meeting.  This was purely a routine management meeting with no disciplinary element.

·     17 December 2001: A performance planning and review meeting was held with Ms Kuenne, Mr Jensen and Mr Ramalingam present.  As part of this meeting Mr Ramalingam received feedback on his performance from April to September 2001.  Mr Jensen told Mr Ramalingam that overall his performance had been unsatisfactory and he had failed to meet three performance indicators.  Mr Ramalingam was advised to be proactive in his role as supervisor.  Particular items discussed were Mr Ramalingam not keeping work up to date, Mr Ramalingam losing temper with colleagues and treating them rudely, failure to give due notice of leave requests, failure to make adequate arrangements to cover staff absences in his sub-unit, a need to improve communication with his staff and frequent arguments between Mr Ramalingam and his staff.  Mr Ramalingam reacted badly to this feedback.  He said he needed leave for stress.  He was refused recreation leave but was told he could not be prevented from taking leave if he needed it because he was sick.  In oral evidence Mr Ramalingam made clear that he harboured an ongoing grievance at being denied this leave.  He seemed unable or unwilling to understand that his managers had invited him to seek a medical certificate which could justify him taking sick leave.  This was clearly a performance management action and was not disciplinary.

·     12 February 2002: Another performance planning and review discussion occurred involving Mr Ramalingam and Mr Jensen.  The assessment and plan first discussed in December were still outstanding.  Mr Ramalingam expressed disdain for AusAID management and “challenged” Mr Jensen to sack him.  He was said to declare “war” on Mr Jensen.  This was again a performance management discussion, although the risk of salary regression was mentioned. 

·     21 February 2002: A meeting attended by Mr Ramalingam, Mr Jensen and Ms Kuenne was another attempt to finalise the performance planning and review process.  Mr Ramalingam said he would provide written material by 22 February.  He expressed contempt for AusAID management and the performance review process.  He claimed it was dishonest and lacked integrity.  Mr Ramalingam left the room angrily.  This was again a performance management discussion.

·     15 March 2002: Ms Kuenne wrote to Mr Ramalingam giving written feedback on his performance as part of the still incomplete performance review process.  She identified several positive initiatives Mr Ramalingam had undertaken but reiterating many problems recorded above.  This was again a performance management initiative.

·     29 March 2002: A “performance counselling” discussion was held attended by Mr Jensen, Mr Ramalingam, Mr J Zabar (the Manager, Staffing who was observer) and Mr T Kaufold (the employee representative).  The issues were a failure by Mr Ramalingam to follow specific and reasonable directions from management, failure to treat colleagues with respect and courtesy and exercising due care and diligence when providing financial advice to AusAID staff.  A specific example of failure to follow a direction was given.  Specific examples of discourtesy were identified.  A specific example of provision of inappropriate advice was cited.  Mr Jensen closed by formally directing Mr Ramalingam to follow specific directions given by management, to treat all fellow employees, including Ms Kuenne, with respect and courtesy and to ensure that all advice given to staff is reliable.  This direction was provided in writing on 9 April 2002 and ended with, “Failure to follow these requirements in future may lead to the matter being referred to STAFF Section for consideration for disciplinary action.”  It is difficult to see how this step in the process accords with the steps in the certified agreement.  However, by expressly stating that the matter had not yet become disciplinary Mr Jensen clarified that no disciplinary action had yet occurred.

·     8 April 2002: Ms Kuenne wrote to Mr Ramalingam recording that she had on a number of occasions tried to arrange a meeting with him to discuss his performance over the past 12 months “in relation to [his] Performance Payment Assessment Report”.  Mr Ramalingam had been unwilling to meet so she was providing written feedback.  She recorded that Mr Ramalingam had improved in several respects but she identified many deficiencies.  She rated his performance as unsatisfactory.  This was again a performance management exercise.

·     10 April 2002: Ms Kuenne wrote to the Director, Staffing and recommended that Mr Ramalingam’s salary be regressed by one pay point because of unsatisfactory performance.  She provided reasons.  This may appear to constitute disciplinary action as clause 22 of the certified agreement does not contemplate salary regression.  However, clause 32 of the certified agreement contemplates salary regression as part of the area concerned with “performance payments”.  Again there is another document, Performance Payment Guidelines: Supervisor Instructions, which I do not have and which may be instructive.  The scheme is that an employee progresses one pay point if performing at an “effective” level.  If he or she has met only the minimum requirements of his or her position the employee does not advance.  If the Director-General assesses performance as unsatisfactory then the employee may regress one pay point.  This again seems to me to be a system of performance management.  Regression is not perceived as a matter of discipline in the agreement.  It is a matter of industrial management.

·     22 April 2002: Mr Jensen sent a minute to the AusAID staffing unit outlining details of Mr Ramalingam’s alleged breaches of management directions throughout April 2002.  This was provided for information and “action”.  The inference here was that the matter was being referred for disciplinary action in accordance with clause 23 of the certified agreement.  This would not, on the authority of such cases as Re Sheridan and Comcare (1999) 61 ALD 318 and Re Battye and Comcare [2000] AATA 18, yet be disciplinary action. In a two-stage process such as clause 23 of the certified agreement contemplates, the IO investigation being the first stage, there is no disciplinary action until the second stage has taken place and charges are laid.

·     22 April 2002: The Assistant Director-General, Resources Branch, AusAID appointed Mr E Murphy to act as IO and conduct an investigation pursuant to clause 23 of the certified agreement into “the allegation that Mr. Shankar Ramalingam breached the APS Code of Conduct”.  Again, this step, based on the Sheridan case, is not disciplinary.

·     30 April 2002: Mr Zabar notified Mr Ramalingam that he would be regressed a pay point.

· 3 May 2002: Mr Murphy completed his report as IO and found that Mr Ramalingam had been in breach of the APS Code of Conduct on a number of occasions. He considered that Mr Ramalingam’s employment should be terminated in accordance with s 15(1)(a) of the Public Service Act. At this stage, based on Sheridan, the action is not yet disciplinary.  It is part of the preliminary investigation process.  

· 29 May 2002: Mr C Tapp, a delegate of the Director-General, decided that Mr Ramalingam’s actions were in breach of the APS Code of Conduct. He decided that Mr Ramalingam’s behaviour in relation to four incidents identified by Mr Jensen on 22 April 2002 in his correspondence with the AusAID staffing unit involved breaches of s 13(3) and (5) of the Public Service Act. He declared he was satisfied that Mr Ramalingam failed to “treat his supervisors with respect and courtesy” and “comply with lawful and reasonable directions given to him by persons authorised to do so”. He decided that termination of employment was the appropriate sanction with immediate effect.

47.     Ms Walker cited a number of authorities to me to suggest that counselling is disciplinary action.  I have no quarrel with that proposition except to state that counselling is not, invariably, disciplinary action.  I consulted the cases cited to me and found that either that they applied the Chennall [28] principles or that they were unsatisfactory for some reason.  The cases were:

·     Re Sloane and Comcare (AAT 11512, 20 December 1996)[2].  The tribunal held counselling to be disciplinary but the findings were vague on the distinction between action taken for performance management purposes and action taken for disciplinary reasons.

·     Re Tan and Comcare (AAT 12209, 15 September 1997)[3].  The tribunal held that what occurred was not counselling.  It seems to have been an interview to gather some facts.  It was not disciplinary.

·     Re Sheridan and Comcare [46]. The tribunal held that the counselling would have been disciplinary action if carried out as part of the discipline process. The applicant’s problems in that case stemmed from a matrix of events in the workplace, only one of which was a disciplinary counselling.

·     Re Wierbicki and Comcare [1999] AATA 123. The tribunal held that counselling had occurred in a disciplinar context but that the counselling had been unreasonable.

·     Re Friedlos and Comcare [1998] AATA 249. The tribunal held that the applicant had suffered no injury, that his problem was personality-based.

·     Re Battye and Comcare [46]. This case involved a straight application of Chenhall. 

·     Re Mitsopoulos and Comcare (1999) 55 ALD 608. Requiring the applicant to engage in a performance improvement program that could result in dismissal was disciplinary action, however it was what management had required of the applicant earlier, that was not disciplinary, such as training her for work beyond her capacity, that caused her compensable problem.

[2]Found at website: at website: What this chronology indicates is that the disciplinary action in Mr Ramalingam’s case began quite late in the piece, strictly no earlier than 29 May 2002. Mr Ramalingam’s adjustment disorder had commenced much earlier, in January 2002. Dr Saboisky in the first report where he diagnosed an adjustment disorder, saw the employment connection as Mr Ramalingam having an adjustment disorder with anxious and depressed mood “specifically related to clashes with management”. He allowed that the termination of employment played a role also. However, for an injury to be disregarded under s 4(1) of the Act because of the influence of reasonable disciplinary action, the reasonable disciplinary action must be the sole employment-related contributing factor. This was a case, in my view, where the injury, as defined in the Act, had its onset at a time when the actions at work were performance management related and not disciplinary. This was also a case such as Sheridan [46] where a matrix of work-related events affected the applicant, with only a small element being disciplinary.

49.     I therefore answer the question attached to issue (c) by finding that Mr Ramalingam is not precluded from compensation because his injury was a result of reasonable disciplinary action taken towards him. 

CONCLUSION

50. The effect of the finding in relation to issue (c) is that Mr Ramalingam qualifies for payment of compensation in accordance with s 14(1) of the Act. However, in order to receive any compensation payments he will have to be found by a decision-maker to qualify for payment of particular forms of compensation. For example, he may qualify for weekly incapacity payments under s 19 of the Act if he satisfies the requirements of that section. As another example, he may apply for compensation for medical expenses under s 16 of the Act if he can satisfy the requirements of that section.

DECISION

51. The decision under review is set aside and the tribunal substitutes its own decision that the applicant is entitled to compensation in accordance with s 14(1) of the Safety, Rehabilitation and Compensation Act 1988.

I certify that the 51 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M J Sassella, Senior Member

Signed:         .....................................................................................
  Associate

Dates of Hearing     13, 14 October, 15 December 2003, 12, 16 January 2004

Date of Decision  16 April 2004
Counsel for the Applicant         Self-represented
Counsel for the Respondent     Ms L Walker
Solicitor for the Respondent     Sparke Helmore