Re Pettiford v Comcare
[2014] AATA 95
[2014] AATA 95
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2012/0193; 2012/5159
Re
Jenny Pettiford
APPLICANT
And
Comcare
RESPONDENT
DECISION
Tribunal Senior Member A K Britton
Date 27 February 2014 Place Sydney 1. The decision under review made on 22 December 2011 is set aside and in substitution of that decision, the Tribunal decides that Comcare is liable for the first claimed injury under s 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (2012/0193).
2. The Registrar is requested to list Application No. 2012/5159 for a directions hearing. Leave is granted to the parties to elect to attend by phone.
........................[SGD]................................................
Senior Member A K Britton
CATCHWORDS
WORKERS’ COMPENSATION — Psychiatric injury — Whether injury is the result of reasonable administrative action taken in a reasonable manner — Reasonableness to be assessed with reference to the circumstances surrounding the action — Difference between administrative action and operational action — Whether the injury was contributed to, to a significant degree, by the employees employment by the Commonwealth — Meaning of employment
LEGISLATION
Public Service Act 1999 (Cth) – s 33
Safety, Rehabilitation and Compensation Act 1988 (Cth) – ss 4; 5A(1);5A(2); 5B(1); 5B(3); 14
Workers' Compensation Act 1926-1960 (NSW) – s 6(1)
Workers Rehabilitation and Compensation Act 1986 (SA)
Workplace Relations Act 1996 (Cth) – s 328
CASES
Comcare v Martinez (No 2) [2013] FCA 439 Commonwealth Bank of Australia v Reeve [2012] FCAFC 21; (2012) 125 ALD 181
Drenth v Comcare [2012] FCAFC 86; (2012) 128 ALD 1
Federal Broom Co Pty Ltd v Semlitch (1964) 110 CLR 626
Hart v Comcare [2005] FCAFC 16; (2005) 145 FCR 29
Keen v Workers Rehabilitation and Compensation Corporation (1998) 71 SASR 42
National Australia Bank Limited v KRDV [2012] FCA 543
SECONDARY MATERIALS
Centrelink Agreement 2009-2011
REASONS FOR DECISION
Senior Member A K Britton
27 February 2014
Psychologist Jenny Pettiford is in her early forties and employed as a job capacity assessor with Centrelink. She has been diagnosed as suffering from an anxiety and depressive disorder and has not worked since a meeting with her manager, Paul Nugent, on 30 August 2011 during which she was directed to work “standard hours”.
Ms Pettiford seeks review of two decisions made by Comcare. In the first decision made in October 2011, Comcare refused to accept liability under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the Act) in respect of Ms Pettiford’s claimed injury “acute reaction to stress”. Comcare accepted that the claimed condition was contributed to, to a significant degree, by Ms Pettiford’s employment with Centrelink, but found that it was “a result of reasonable administrative action taken in a reasonable manner in respect of [Ms Pettiford’s] employment” and therefore, by the operation of the exclusionary provision in s 5A(1) of the Act, she was not entitled to compensation.
In the second decision Comcare refused to accept liability under the Act in respect of the claim made by Ms Pettiford in July 2012 alleging “aggravation of adjustment reaction with mixed emotional features”. Comcare’s delegate accepted that Ms Pettiford suffered from that condition but decided it was a result of “reasonable administrative action …” and therefore fell within the exclusionary provision in s 5A of the Act.
The Legislative Scheme
Comcare will be liable to pay compensation in accordance with the Act in respect of any “injury” suffered by Ms Pettiford if it results in impairment or incapacity for work (s 14 of the Act).
The Act defines “injury” to mean (s 5A(1)):
(a)a disease suffered by an employee; or
…
but does not include a disease, injury or aggravation suffered as a result of reasonable administrative action taken in a reasonable manner in respect of the employee's employment. [Emphasis added]
Section 5A(2) defines “reasonable administrative action” to mean:
2For the purposes of subsection (1) and without limiting that subsection, reasonable administrative action is taken to include the following:
(a)a reasonable appraisal of the employee's performance;
(b)a reasonable counselling action (whether formal or informal) taken in respect of the employee’s employment;
(c)a reasonable suspension action in respect of the employee’s employment;
(d)a reasonable disciplinary action (whether formal or informal) taken in respect of the employee's employment;
(e)anything reasonable done in connection with an action mentioned in paragraph (a), (b), (c) or (d);
(f)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.
“Disease” is defined to mean: “(a) an ailment suffered by an employee; or (b) an aggravation of such an ailment, that was contributed to, to a significant degree, by the employee’s employment by the Commonwealth” (s 5B(1)). “Ailment” in turn is defined to mean “any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development)” (s 4). “Significant degree” means “a degree that is substantially more than material” (s 5B(3)).
DECISON 1
Background
Ms Pettiford was based in the Mudgee office of Centrelink. In her role as job capacity assessor she was required to assess persons claiming Centrelink benefits and to prepare written opinions about their capacity for employment.
Between June 2006 and March 2010 Ms Pettiford was supervised by Mr Nugent who worked out of Lithgow, a town in central NSW about 125 kilometres from Mudgee. On 8 March 2010 Ms Pettiford lodged a formal complaint against Mr Nugent alleging that actions taken by him concerning, among other things, her hours of work constituted bullying and harassment. Further she alleged that after making that complaint Mr Nugent threatened her and abused his position.
Ms Pettiford’s allegations were referred for investigation. In a report dated 7 April 2010 Centrelink’s Professional Standards Manager, Ann Bagnall, concluded that the conduct complained of did not constitute bullying and harassment. She wrote:
I find that the actions of Mr Nugent in respect of coaching, in this instance, were reasonable and do not constitute bullying and harassment.
I find that the actions of Mr Nugent in respect of flex arrangements and regular hours, in this instance, were reasonable and do not constitute bullying and harassment.
I find that the actions of Mr Nugent in respect of travel arrangements, in this instance, were reasonable and do not constitute bullying and harassment.
I find that the actions of Mr Nugent in respect of requiring provision of data to him in a specific format, regardless of the fact that it can be obtained elsewhere in another format, in this instance, were reasonable and do not constitute bullying and harassment.
I find that there is no evidence to support a finding that Mr Nugent engaged in threatening behaviour, or that he abused his position in dealing with yourself, following your complaint and request to be assigned to another supervisor.
Ms Pettiford applied to the Merit Protection Commissioner for review of that decision under s 33 of the Public Service Act 1999 (Cth). On 14 January 2011 a delegate of the Merit Protection Commissioner notified Ms Pettiford that the decision made by Ms Bagnall had been affirmed.
Ms Pettiford notified of the decision to reappoint Mr Nugent as her supervisor
Shortly after lodging her complaint, Ms Pettiford was removed from Mr Nugent’s supervision. Len Backhouse was appointed as her supervisor. In August 2010 Mr Backhouse was transferred and Jeanette Kluver appointed as Ms Pettiford’s supervisor. Ms Kluver continued in that role for about 12 months.
On 15 August 2011 Mr Backhouse advised Ms Pettiford that he had decided to reappoint Mr Nugent as her supervisor. He gave as the reason for that decision a restructure within Centrelink placing Lithgow and Mudgee in the same service area. During that conversation Ms Pettiford asked for a mediation session between herself and Mr Nugent to be organised. On 24 August 2011 Mr Backhouse advised Ms Pettiford by email of his decision not to accede to that request:
I have given consideration to the issues you raised on the 15 August 2011, around my moving you from Jeannette Kluver’s team back onto Paul Nugent’s team. As I stated at the time, it is a management decision that I need to make to consolidate all the sites in Zone 3 under a single span of control. I need to do this to provide a coordinated response to servicing issues across the Mudgee to Dubbo region and I have asked Paul to actively involve you in a service strategy for the Dubbo office as I believe that you have a substantial amount of experience and input to offer.
I discussed with HR the issue that you raised about mediation. I formed the opinion that what was required was not so much mediation, but more a reintroduction and a renewal of your prior relationship with Paul. I was very mindful that I wanted this to be the start of a new, ongoing and professional relationship, not a rehash of things that have happened in the past.
To that end I have asked Paul to contact you via email to arrange a suitable time to visit Mudgee … I have suggested to Paul that perhaps the Manager (or delegate) might be present but I am prepared to leave that to both your discretion as to whether it would add or subtract from the conversation.
Mr Backhouse testified that when he advised Ms Pettiford of his decision it was apparent that she was apprehensive about the proposed change but appeared willing to “negotiate around the issue”. He agreed he was aware that 10 months earlier Ms Pettiford had raised with him concerns about participating in a conference Mr Nugent would also be attending. He admitted that he was aware that Ms Pettiford had lodged a complaint against Mr Nugent but claimed that he was unaware of the details of that complaint.
Ms Pettiford testified that during the conversation with Mr Backhouse on 15 August 2011 she pleaded with him to look at her file and the reports addressing her complaint about Mr Nugent. Mr Backhouse said he consulted Centrelink’s human resources division and was told it was not necessary to read the reports as they related to events that had occurred 18 months ago. He denied as claimed by Ms Pettiford that she told him she did not think she could cope with working with Mr Nugent.
Mr Backhouse claimed that when he made the decision to appoint Mr Nugent as Ms Pettiford’s supervisor it was his understanding the two were on civil terms. He said he formed that opinion on the basis of a dinner, following a training day in May 2011 which he, Mr Nugent, Ms Pettiford, and another Centrelink employee attended. Mr Backhouse recalled the dinner as being “unremarkable”. Ms Pettiford claimed that Mr Nugent ignored her throughout the dinner and refused to have eye contact. On her account she tried to engage in small talk but Mr Nugent rebuffed her efforts. Mr Nugent recalled that he was very tired that evening and not particularly chatty. He denied ignoring Ms Pettiford but agreed they did not speak at length.
The 30 August 2011 meeting
On 26 August 2011 Mr Nugent emailed Ms Pettiford and requested that she attend a meeting on 30 August 2011. According to Ms Pettiford she became distressed and anxious after receiving the email and spoke to her mother and an Employee Assistance Program counsellor.
The meeting was attended by Mr Nugent, Ms Pettiford and Melinda Wade, the manager of the Mudgee office who acted as scribe.
While some disagreement about what occurred at the meeting, it is agreed that the restructure of Centrelink and its impact on Ms Pettiford’s work was discussed. It is also agreed that Mr Nugent announced that from 4 October 2011 Ms Pettiford would be required to work “standard hours” (broadly, Monday to Friday, 8 am to 4 pm) and that this was “non-negotiable”. At the time Ms Pettiford was working four days per week: Monday, Tuesday, Thursday and Friday, 7 am to 4.30 pm.
According to Ms Pettiford she was extremely apprehensive and nervous during the meeting and “tried not to feel”. On her account Mr Nugent appeared to be “really angry”. Mr Nugent denied being angry but said he was nervous given that Ms Pettiford had previously made a complaint about him. In Ms Wade’s opinion Mr Nugent conducted himself in a professional manner throughout the meeting.
Consultation with GP
According to Ms Pettiford at the close of the meeting she was overwhelmed with feelings of anxiety and had difficulties breathing. She asked Ms Wade to cancel her appointments with clients scheduled for that afternoon and left the office in tears.
Within an hour of the meeting Ms Pettiford saw her GP who reported that she arrived in “distress anxiety and [was] not breathing well”. The GP recorded:
[T]oday [Mr Nugent] came up and taken over, in meeting with her outline[d] all the changes he would make with previously agreed arrangements undone and seemingly without any negotiated agreement with her
The GP certified Ms Pettiford unfit for work for two days. He subsequently referred Ms Pettiford to a psychologist, and later a psychiatrist, for treatment. It is agreed that following the meeting Ms Pettiford suffered an acute psychiatric illness (variously described). Ms Pettiford has been certified unfit to work since the 30 August 2011 meeting.
Background to Ms Pettiford’s hours of work
While working at Centrelink Ms Pettiford lived with her husband on a farm about 25 kilometres out of Mudgee. They shared the use of a car. Apparently there is no public transport servicing the area.
Shortly after commencing at Centrelink in 2006 Ms Pettiford started to work a four-day week, commencing at 7 am. She preferred to start early because this meant she could travel to and from work with her husband who was required to be at work by 7 am. She believed the arrangement not only suited her personal convenience but also improved her efficiency because it gave her uninterrupted time to complete reports in the hour or so before the office opened.
In early January 2010 Mr Nugent raised with Ms Pettiford concerns about her spread of hours. She responded in an email sent on 14 January 2010:
Further to our recent discussion regarding flex leave … My current working hours generally involve 9-10 hour days Monday – Thursday (ie 7 am – 5 pm) with a 30 minute lunch break and frequent requests for flex leave on Fridays.
This arrangement suits my personal circumstances as I reside out of town, share a car with my partner (who works a 4 day week and starts early) and it allows me to maintain a healthy work-life balance …
For these reasons I would prefer to continue with current arrangements. Alternatively I would be interested in negotiating a 9-day fortnight that accommodates full-time hours.
On 20 January 2010 Ms Pettiford wrote to her manager, Edna Salt, raising concerns about Mr Nugent’s conduct during a coaching session and asked to be removed from his supervision.
On 20 January 2010 Mr Nugent spoke to Ms Salt about Ms Pettiford’s hours of work. Five days later, Ms Salt sent an email to staff about “inconsistencies in the use of ‘Flex time’”:
Flexibility exists in the design and negotiation of regular hours between employees and their manager. A default option exists where agreement cannot be reached … Access to flex time is only available to employees with prior notice to and approval by the manager within operational requirements. Planned flex time with an automatic expectation that it will be approved, or where it has been taken on a regular pattern is not flex time … It really should become part of a negotiation about regular hours.
Ms Salt and Mr Nugent met with Ms Pettiford on 4 February 2010 and agreed that on a trial basis Ms Pettiford could work a nine day fortnight, starting at 7 am, with a 60 minute break for lunch.
At the end of that trial, Ms Pettiford asked that the arrangement be varied. Ms Salt rejected that proposal:
Your proposal to continue long hours, reduce your lunch break to 30 minutes and to have a 4 day per week attendance pattern does not appear to acknowledge the principles that underline our agreement which I have restated below … I have considered your proposal. My take is that the agreement that we reached was a reasonable solution to the issues discussed about your working pattern when we met on 4 February … I am more comfortable in maintaining this schedule for now. I am also aware that I have a duty to ensure that your health is not compromised through inadequate breaks especially during long working days. We will review this agreement again at the end of a further four week period.
On 11 March 2010 Ms Pettiford emailed Centrelink’s human resources division and alleged that following her request that she be removed from Mr Nugent’s supervision, there was a significant change in his position in relation to her working hours. She claimed that in retaliation for raising the issue with Ms Salt, Mr Nugent directed her to start work at 8 am despite having approved 7 am starts for the past three years. Shortly after this email Ms Pettiford was placed under the supervision of Mr Backhouse.
In May 2010 Mr Backhouse discussed with Ms Pettiford her hours of work. Later that month he emailed Ms Pettiford to advise that he had approved a three-month trial whereby she could work a 35 hour, 20 minute week, Monday, Tuesday, Thursday and Friday, 7 am to 4.30 pm with a 40 minute lunch break. He wrote:
My inclination is if it is working well at [the three-month] review, to then roll it over for a more extended period.
Mr Backhouse testified that the reason he agreed to that arrangement was because he was of the opinion Ms Pettiford would probably resist any change to her hours of work and, because he saw his role as that of caretaker, he did not want to tackle the issue until the investigation into the complaint made against Mr Nugent was finalised.
Sometime after taking over the supervision of Ms Pettiford, Ms Kluver noticed that Ms Pettiford seemed to be commencing work at 7 am and finishing at 5 pm. Ms Kluver raised with Ms Pettiford her concern that working long days was inappropriate given the type of work she was required to perform which sometimes involved dealing with difficult and damaged people. Ms Kluver stated that notwithstanding these concerns she was persuaded that it was appropriate for Ms Pettiford to continue to work long hours because she had no other way of getting to and from work apart from travelling with her husband.
In January 2011 Ms Kluver noticed Ms Pettiford’s timesheets consistently recorded a start time of exactly 7 am but finish times varied and were recorded to the minute. She raised the issue with Ms Pettiford who advised that the reason for this attendance pattern was because she was dropped at work the same time each day.
In February 2011 after being notified of CCTV footage showing Ms Pettiford arriving at work one morning at 7.20 am carrying shopping bags, Ms Kluver started calling Ms Pettiford at around 7 am. According to Ms Kluver sometimes Ms Pettiford did not answer her calls and the phone rang out.
Around February 2011, Ms Kluver became aware that Ms Pettiford was commencing work at 6 am on Fridays. Ms Kluver wrote to Ms Pettiford advising that she had not granted approval for Ms Pettiford to commence work before 7 am and directed her to cease doing so.
In a lengthy email to Ms Kluver sent on 1 March 2011, Ms Pettiford advised that for some time she had been starting work on Fridays at 6 am because her husband was required to start work at 6 am on Fridays. She wrote that it was her understanding that Mr Backhouse had briefed Ms Kluver about this arrangement: “under Len [Backhouse], I had believed this arrangement was acceptable as he had advised that as professionals we were trusted to manage our time and this included the discretion to arrive or leave”. Ms Pettiford wrote that nonetheless she had no problems with following the direction not to start work before 7 am.
Is Comcare liable for Ms Pettiford’s anxiety condition?
Comcare accepts that Ms Pettiford’s claimed anxiety condition (the condition) was contributed to, to a significant degree, by her employment with Centrelink. It contends however that by the operation of s 5A(1) of the Act, the condition did not constitute an “injury” within the meaning of the Act because it was a result of the direction given by Mr Nugent at the meeting on 30 August 2011 that Ms Pettiford commence working standard hours (the direction). Comcare contends that the direction constitutes reasonable administrative action taken in a reasonable manner. Ms Pettiford argues that the condition was not a result of the direction and, in any event, the direction was not reasonable administrative action taken in a reasonable manner.
Whether Comcare is liable for the condition turns principally on the following questions:
·Was Ms Pettiford’s condition a result of the direction given by Mr Nugent at the meeting on 30 August 2011?
·If so, does that direction constitute administrative action in respect of Ms Pettiford’s employment?
·If yes, was the action reasonable administrative action taken in a reasonable manner?
Was Ms Pettiford’s condition “a result of” the direction given by Mr Nugent at the meeting on 30 August 2011 about her hours of work?
Comcare contends that Ms Pettiford’s anxiety condition was a result of the direction. Counsel for Ms Pettiford, Mr Richards, disagrees and contends that the direction was a side issue and that the decision to return her to work under the supervision of Mr Nugent, who she believed had bullied and harassed her in the past and apprehended would do so in the future, was the main cause of her anxiety condition.
Ms Pettiford’s condition will be “a result of” the direction, if it was an operative cause of the condition, even if there were other unrelated causes. (Hart v Comcare [2005] FCAFC 16; (2005) 145 FCR 29 at [18] – [26]; Commonwealth Bank of Australia v Reeve [2012] FCAFC 21; (2012) 125 ALD 181 at [54] – [56]; Drenth v Comcare [2012] FCAFC 86; (2012) 128 ALD 1 at [29]).
Ms Pettiford’s actions in contacting a counsellor with the Employee Assistance Program shortly before the meeting with Mr Nugent is consistent with her claim that after being notified that Mr Nugent was to be reappointed as her supervisor she was in a state of heightened anxiety and had difficulties sleeping. I accept that Ms Pettiford was extremely distressed at the prospect of again being supervised by Mr Nugent. I also accept that she perceived that Mr Nugent had bullied and harassed her in the past and believed he was likely to do so again.
Nonetheless I cannot agree with the proposition that the direction did not contribute to Ms Pettiford’s condition. The history to the 30 August 2011 meeting reveals that Ms Pettiford attached great significance to being able to align her work hours with those of her husband. The proposition that she was unaffected by the direction is inconsistent with the account she gave her GP within an hour of the meeting. The GP’s clinical notes reveal that Mr Nugent’s decision to change “previously agreed arrangements … without any negotiated agreement” was something more than a “side issue”. It is also inconsistent with the account prepared by Ms Pettiford shortly after the meeting, “Reflections re meeting with Paul 30 August 2011” in which she discussed the direction at some length.
It is notoriously difficult to identify what causes a person to develop a psychiatric illness. The task does not lend itself to empirical measurement or testing. It is not uncommon for there to be multiple causes. Where, as in this case, a particular event appears to have precipitated the onset of the condition, care must be taken not to overlook other stressors which might also have played a role. I think it more probable than not the main cause of Ms Pettiford’s condition was the prospect of again being placed under the supervision of Mr Nugent. I am nonetheless satisfied that, while not the main cause, the direction was an operative cause of the condition.
I find that Ms Pettiford’s condition was “a result of” the direction.
Was the direction to resume “standard hours” “administrative action … in respect of Ms Pettiford’s employment”?
Mr Richards submits that the direction does not constitute “administration action in respect of [Ms Pettiford’s] employment” because it related to operational not administrative matters.
The meaning of the expression “… administrative action … in respect of the employee's employment” in s 5A(1) was considered in Reeve and Drenth. Reeve makes clear that matters of general administration, management and the implementation of policy do not constitute excluded action for the purpose of s 5A, even where those matters might affect the employee (per Gray J at [38]). To constitute administrative action the action must be “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” (per Rares and Tracey JJ in Reeve at [57]; per Rares, McKerracher and Murphy JJ in Drenth at [22]).
The direction that Ms Pettiford work “standard hours” was plainly directed at her and taken … in respect of [her] employment”. The real question is whether the direction can be characterised as administrative action. Mr Richards contends that the decision was operational in the sense used by Gray J in Reeve at [31] because it related to a feature of Ms Pettiford’s workplace, namely her hours of work. That submission cannot be accepted. The argument put by Comcare that Ms Pettiford’s practice of working “non-standard” hours constitutes a benefit within the meaning of paragraph (f) of s 5A(2), is probably correct. Even if not, the direction plainly related to the administration of Ms Pettiford’s employment relationship and the conditions under which she was employed, and therefore constitutes administrative action in respect of her employment.
Was the direction “reasonable” administrative action?
Comcare contends that the direction constitutes reasonable administrative action; Ms Pettiford disagrees. The determination of whether the direction was reasonable involves an objective judgment, taking into account the direction itself, the reason it was issued and the circumstances surrounding its issue.
Ms Pettiford was the only psychologist employed in the Mudgee office. The hours she was working in August 2011 meant that on one day out of five there was no psychologist available to staff and clients of the Mudgee office. As Ms Kluver pointed out if Ms Pettiford’s hours were spread over a five-day week her clients would be afforded greater flexibility and access to her services (a view shared by Ms Salt). Starting work at 7 am meant she was working alone for up to an hour each day and raised potential health and safety problems. In addition, the events of early 2011 had raised legitimate concerns about Ms Pettiford’s pattern of attendance.
In deciding staffing matters Centrelink had responsibilities to its clients and staff, including any affected employee. Given the staffing arrangements in the Mudgee office it was not unreasonable to require Ms Pettiford to attend the office five days a week and abandon early start times notwithstanding her stated preferences and the personal inconvenience she would inevitably suffer. Of itself the decision to require Ms Pettiford to work standard hours in my opinion was reasonable.
However the assessment of whether the direction was reasonable cannot be made at an abstract level but requires consideration to be given to the circumstances surrounding the issue of the direction. These include any provisions governing the conditions of Ms Pettiford’s employment. At the time the direction was made Ms Pettiford’s employment was governed by the Centrelink Agreement 2009-2011, an agreement binding on Ms Pettiford and the Chief Executive Officer of Centrelink, made under s 328 of the Workplace Relations Act 1996 (Cth) (the Agreement). For the reasons discussed below I am of the opinion that when the direction was issued it was not made in accordance with the provisions of the Agreement. Had those provisions been complied with I would have no hesitation in finding that the direction was reasonable. However they were not and for that reason I conclude the direction was not reasonable administrative action.
Was the direction taken in a reasonable manner?
Comcare contends that the action taken by Mr Nugent of directing Ms Pettiford to work standard hours without discussion was taken in a reasonable manner because of the long history of difficulties in dealing with Ms Pettiford. Ms Pettiford disagrees and argues that in the absence of genuine negotiations it could not be said that the direction was taken in a reasonable manner.
In Comcare v Martinez (No 2) [2013] FCA 439 Robertson J cited with approval the following passage in Keen v Workers Rehabilitation and Compensation Corporation (1998) 71 SASR 42 at 47-48, where Lander J, commenting on a similar (but not identical) provision to s 5A of the Act contained in the Workers Rehabilitation and Compensation Act 1986 (SA), stated:
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 action was taken in a reasonable manner by the employer.
In a separate judgement Bleby J said (at 63) (cited with approval by Cowdroy J in National Australia Bank Limited v KRDV [2012] FCA 543 at [51]):
Whether administrative action is taken in a reasonable manner is very much a question of objective fact, and is to be determined against the ordinary standards of reasonable employers in all the circumstances of the case. Whether administrative action is reasonable or is taken in a reasonable manner depends first on the finding of the primary facts as to what occurred in the taking of the administrative action, namely what decision was made, who made it and why it was made, what was done, what was omitted to be done and the factual background against which the decision was made or implemented.
In determining whether the direction was taken in a reasonable manner, the question posed is not whether it could have been taken more reasonably (Martinez (No 2) at [81]). Nor is the impact of the action on Ms Pettiford determinative (Martinez (No 2) at [73]).
Before considering the submissions made by the parties it is useful to set out some of the key provisions in the Agreement relevant to Ms Pettiford’s hours of work. These include those relating to the concept of “regular hours” and “default regular hours”. Regular hours is defined by cl 63.3 of the Agreement to mean:
‘Regular hours’ are the pattern of attendance to be worked by an employee over the four week settlement period. The number of regular hours in a settlement period must equal the employee’s hours of duty. Regular hours operate with flextime subject to the availability of work and the approval of the team leader/manager.
Section D of the Agreement is headed “Hours of Duty” and relevantly provides:
·the maximum regular hours to be worked by an employee per day is ten (cl64.1)
·normal working hours must be worked within the “bandwidth” — 7am to 7pm Monday to Friday (cl63.2)
·subject to operational requirements, employees may access “flexitime”, a system which “enable employees and Centrelink to flexibly manage an employee’s pattern of attendance, based on acquittal against an employee’s regular hours” (cll66.1, 63.4)
·if requested by the employee an employee’s regular hours must include at least one planned day off in each 28 day settlement period (cl64.6)
·an employee’s regular hours of work must specify a start and finish time and meal break for each day of attendance (cl64.5)
Clause 64.2 is of some significance and provides:
An employee and their team leader/manager will together design, genuinely negotiating where necessary, the employee’s regular hours.
Where agreement is not reached Centrelink can direct an employee to work “default regular hours”:
Default regular hours where agreement has not been reached
64.8 Where agreement cannot be reached on the employee’s regular hours, the employee will continue with their existing regular hours for the remainder of the current settlement period.
64.9 After this time if agreement is not reached, the employee can choose:
(a)to be placed on default regular hours; or
(b)to continue their existing regular hours for the next full settlement period, and then be placed on default regular hours.
64.10 Default regular hours for full time employees are 7 hours 30 minutes per day, Monday to Friday set by the team leader/manager in accordance with one of the following options:
(a)the employee will nominate a preference for a lunch break of either 30, 45 or 60 minutes and the default regular hours are calculated so that the employee’s regular hours either:
(i) commence at 7.50 am or 10 minutes before the opening time of the workplace whichever is the latest; or
(ii) finish at 5.15 pm or 15 minutes after closing time, whichever is the earlier; or
(b)8.30 am to 5.00 pm with a one hour lunch break.
There is no argument that at the meeting of 31 August 2011 Mr Nugent directed Ms Pettiford to work “standard hours” and told her that this was “non-negotiable”. I understand Mr Nugent’s use of the term “standard hours” to mean default regular hours as defined by the Agreement, namely seven hours, 30 minutes each day, Monday to Friday, commencing in this case at 8.05 am (ten minutes before the opening time of the Mudgee office) or, if elected by the employee the subject of the direction, finishing at 5.15 pm (fifteen minutes after the office closing time). In addition within those parameters, the Agreement provides that the directed employee can elect to take a lunch break of 30, 45 or 60 minutes (see cl 64.10).
Mr Nugent testified that when he met with Ms Pettiford he was unaware of the requirement to “genuinely negotiate” contained in cl 64.2 of the Agreement. He stated that it was his understanding that the Merit Protection Commissioner had ruled that it was reasonable that Ms Pettiford work “standard hours”, a ruling with which Mr Backhouse, Ms Kluver and Ms Wade agreed. He stated that he had decided not to discuss the matter with Ms Pettiford because he had formed the view she would probably resist any variation to her hours, and, therefore discussion would be futile and simply delay the implementation of the new hours arrangement.
As Comcare points out, the meeting of 31 August 2011 was not the first time concerns had been raised with Ms Pettiford about her hours of work. Concerns were raised by Mr Nugent and Ms Salt in early 2010, by Mr Backhouse in mid-2010 and by Ms Kluver in early 2011. It will be recalled that in early February 2010 following discussions with Mr Nugent and Ms Salt it was agreed that Ms Pettiford would commence work at 7 am, take a sixty-minute lunch break and work a nine-day fortnight. In May 2010 Mr Backhouse agreed to Ms Pettiford’s request to return to a four-day week on a trial basis. Despite some misgivings Ms Kluver agreed to continue that arrangement when she took over as Ms Pettiford’s supervisor in August 2010. Apart from the 6 am Friday starts, a practice which apparently started in late 2010 and ceased after Ms Kluver’s direction issued in February 2011, there is no evidence that prior to the 31 August 2011 meeting, Ms Pettiford’s “regular hours” had not been approved by her supervisors.
Three points can be made about this evidence. First, lack of awareness of the requirement to “genuinely negotiate” explains but does not explain away Mr Nugent’s action. Second, there is no “escape” clause in the Agreement in respect of employees who are considered by managers to be difficult to negotiate with. Indeed, the possibility of negotiations failing is specifically recognised by clauses 64.8 to 64.10 of the Agreement. Third, it is implicit within the structure of clause 64 that the requirement that the employer undertake genuine negotiations with the employee arises every time management seeks to change the employee’s regular hours. This is clear because it is only after an attempt has been made to “design, genuinely negotiating where necessary, the employee’s regular hours” and has failed that the “default regular hours” provisions kick in. The fact that previous attempts at negotiation had failed does not allow the employer to avoid attempting the process the next time that management seeks to alter the employee’s regular hours.
I accept that in early 2010, Mr Nugent genuinely negotiated with Ms Pettiford about her spread of hours. However when he took over her supervision some 18 months later he made no attempt to do so. That Ms Pettiford might have strongly resisted any change does not obviate the requirement to “genuinely negotiat[e]”. As her supervisor, Mr Nugent was required under the terms of the Agreement to at least attempt to negotiate the design of Ms Pettiford’s hours before exercising the default hours option. That she had made a complaint about him in the past because of, among other things, action he had taken about her hours of work, does not obviate that requirement.
It is not possible to say whether, had discussion taken place, a compromise might have been reached, as happened in February 2010. It is to be noted that the continuation of Ms Pettiford’s (then) current hours and default regular hours were not the only options available even if the objective sought to be achieved was the alignment of Ms Pettiford’s hours of work with office opening hours. For example, it was open to the parties to agree to Ms Pettiford commencing early one day per week.
In my opinion it cannot be said that because Mr Backhouse and Ms Kluver held discussions with Ms Pettiford about her hours of work in the intervening period between Mr Nugent being removed as her supervisor and resuming that role in August 2011, the requirement to “genuinely negotiate” was satisfied. While Mr Backhouse told Ms Pettiford that in his opinion 7.45 am was a preferable start time, he concedes he did not press the issue. As will be recalled, in May 2010, shortly after taking over her supervision he gave written approval for Ms Pettiford to commence work at 7 am and work a four-day week. He did not raise the issue again during the balance of the period Ms Pettiford was under his supervision. While Ms Kluver had misgivings about the arrangement she inherited from Mr Backhouse, apart from raising her concerns she took no steps to negotiate a change to Ms Pettiford’s hours during the 12 months she acted as her supervisor. Ms Kluver’s action in raising with Ms Pettiford the 6 am Friday starts and the recording of attendance times could not be characterised as discussions concerning the design of Ms Pettiford’s regular hours.
The reluctance of Mr Backhouse and Ms Kluver to negotiate with Ms Pettiford about her spread of hours is understandable. They were concerned that if they pressed the issue they might find themselves the subject of a complaint. They in effect treated Ms Pettiford with kid gloves. Whatever the reason for that approach in my opinion it could not be said that either genuinely negotiated with Ms Pettiford over the design of her hours of work.
The Agreement does not define what is meant by the phrase “genuinely negotiating” for the purpose of cl 64.2. In my opinion while it does not impose a requirement on Centrelink to conduct exhaustive negotiations it nonetheless requires “the employee and their supervisor/manager to together design, genuinely negotiating … the employee’s regular hours”. Where, as in this case, the team leader/manager seeks to vary existing arrangements, in my opinion, cl 64.2 requires as a minimum that the employee be given notice of the proposed changes, the consequences of failing to reach agreement and an opportunity to respond. This did not occur. Mr Nugent simply notified Ms Pettiford that her hours of work were to be varied and that he was not prepared to discuss the issue further. It may be that the reason he took that approach was because he thought the time had come to bite the bullet. It may also have been that he had misinterpreted the Merit Review Commissioner’s report as approval not only for the decision to change Ms Pettiford’s hours but for the approach he took to the decision’s implementation. Whatever the reason he did not genuinely negotiate with Ms Pettiford prior to exercising the default hours option.
I cannot agree with the proposition put by Centrelink that because of the long history to the discussions between Ms Pettiford and her supervisors, the action of directing Ms Pettiford to work standard hours without discussion constitutes action taken in a reasonable manner. In my opinion the obligation imposed by cl 64.2 to “genuinely negotiat[e]” was not satisfied and therefore the power to direct Ms Pettiford to work default hours option could not be exercised. I find the direction was neither reasonable administrative action nor taken in a reasonable manner.
Summary
Ms Pettiford’s anxiety condition was contributed to, to a significant degree, by her employment with Centrelink. It was not the result of reasonable administrative action taken in a reasonable manner in respect of her employment. I find that Ms Pettiford suffered an injury within the meaning of the Act. I have decided to set aside the decision under review and in substitution of that decision, decide that Comcare is liable for that injury under s 14 of the Act.
DECISION 2
In July 2012 Ms Pettiford made a further claim for compensation in respect of, among other things, “adjustment disorder with anxious and depressed mood”. She claimed that “HR response since 30/8/11 had aggravated illness”. In a statement provided to Comcare in support of that claim dated 4 July 2012, Ms Pettiford said her anxiety condition had been aggravated by, among other things, Centrelink’s failure to comply with relevant rehabilitation guidelines and her treatment by Centrelink in the period since she stopped work in August 2011.
In rejecting that claim Comcare reasoned that the “aggravation” of Ms Pettiford’s anxiety condition was caused by Centrelink’s action in notifying her in writing on 13 March 2012 that consultant psychiatrist, Dr Richard Burek, was of the opinion that she was now fit to return to work. In that letter, Centrelink rehabilitation case manager, Jennifer Caincross, also advised that subject to consultation with Ms Pettiford’s treating psychiatrist, a return to work program would be developed. In rejecting Ms Pettiford’s claim for compensation Comcare stated that the action constituted reasonable administrative action taken in a reasonable manner and fell within the exclusionary provision in s 5A of the Act.
At hearing Comcare revised its position contending for the first time that Ms Pettiford’s claim was “entirely misconceived” because any aggravation of her condition was not contributed to, to a significant degree by her employment. It contends that the action of notifying Ms Pettiford of Dr Burek’s opinion and the provisional decision that she was to return to work, was not related to employment as that term is used in the definition of disease within the Act. Ms Pettiford disagrees.
Before considering these submissions it is useful to sketch in some background facts.
Background
When she received the 13 March 2012 letter from Ms Caincross (the offending letter), Ms Pettiford had been off work since the meeting of 31 August 2011. Her claim for compensation was declined in October 2011 and by the end of that year, she had exhausted all sick leave and other entitlements.
In November 2011 Ms Pettiford came under the care of consultant psychiatrist, Dr Phillip O’Rourke.
In February 2012, at the direction of Centrelink, Ms Pettiford attended a “fitness for duty” assessment conducted by Dr Burek. In a report dated 21 February 2012, Dr Burek stated that in his opinion Ms Pettiford was suffering from a “major depressive episode” but nonetheless was “fit to carry out her full range of duties [as a job capacity assessor] immediately”. He recommended a graduated return to work.
According to Ms Pettiford, on receipt of the offending letter her “initial stunned response quickly escalated into an extreme panic attack with suicidal ideation”. She contacted Lifeline and her husband. The following day her GP concluded after testing that her condition had deteriorated to such an extent that a referral under a mental health plan to psychologist, Dr Margaret McLeod, was necessary.
Can the decision communicated to Ms Pettiford in the March 2012 letter be characterised as “employment by the Commonwealth”?
The weight of medical opinion is that the March 2012 letter triggered a worsening or aggravation of Ms Pettiford’s anxiety condition. The issue in dispute is whether that aggravation was “contributed to, to a significant degree” by Ms Pettiford’s employment. The answer to that question requires consideration of the meaning of the phrase “the employee’s employment by the Commonwealth” in s 5B of the Act.
Section 5B provides:
Definition of disease
1In this Act:
“disease” means:
(a)an ailment suffered by an employee; or
(b)an aggravation of such an ailment;
that was contributed to, to a significant degree, by the employee’s employment by the Commonwealth or a licensee. [emphasis added]
2In determining whether an ailment or aggravation was contributed to, to a significant degree, by an employee’s employment by the Commonwealth or a licensee, the following matters may be taken into account:
(a)the duration of the employment;
(b)the nature of, and particular tasks involved in, the employment;
(c)any predisposition of the employee to the ailment or aggravation;
(d)any activities of the employee not related to the employment;
(e)any other matters affecting the employee’s health.
This subsection does not limit the matters that may be taken into account.
…
Comcare contends that the action of sending the offending letter was not employment related citing in support the comments of Windeyer J in Federal Broom Co Pty Ltd v Semlitch (1964) 110 CLR 626 at 621 (reproduced at paragraph [87] below). Comcare submits the decision communicated to Ms Pettiford on 13 March 2012 could not be characterised as one relating to some feature of the workplace or environment or otherwise connected to her employment but rather it was a decision about the employment relationship itself.
Ms Pettiford disagrees citing in support the comments of Kitto J in Federal Broom at 632-633 (reproduced at paragraph [86] below). She contends it is “a nonsense” to suggest that the actions of Centrelink in attempting to return her to work did not relate to her employment, reasoning that were it not for her employment she would not have been exposed to the offending letter. She contends that the decision that she be returned to work was a “state of affairs” to which she was exposed in relation to the performance of her duties and fits squarely within the analysis employed by Kitto J in Federal Broom.
In Federal Broom the High Court examined the definition of “injury” in s 6(1) of the Workers’ Compensation Act 1926-1960 (NSW), relevantly “the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to such aggravation, acceleration, exacerbation or deterioration; ...”.
In that matter Ms Semlitch injured her back at work, was incapacitated as a result and paid workers compensation for a period. During that period her then latent schizophrenia resurfaced and became acute. The Court of Appeal dismissed an appeal against the decision of the NSW Workers Compensation Commission to award Ms Semlitch compensation on account of her schizophrenia. In a dissenting judgement, Else-Mitchell J reasoned that if the incident during which Ms Semlitch sustained her physical injuries had aggravated etc. her existing psychiatric condition, it was that incident and not the employment, or any factor in the employment that contributed to the aggravation. On appeal to the High Court, Kitto J (with whom Taylor and Owen JJ agreed) rejected that reasoning (at 632-633):
[Else-Mitchell J’s analysis] treats the word ‘employment’ in the definition [of ‘injury’] as something distinct both from the fact of the employment of the worker and from any consequence of the employment and confines it (if I understand the notion correctly) to the inherent features or essential incidents of the employment, to the exclusion of occurrences in the course of the work. With all respect, I think that to take this view is to refine upon the word too much and by so doing to miss what the definition is manifestly intending to say. Where it is possible to identify as a contributing factor to the aggravation, acceleration, exacerbation or deterioration of a disease some incident or state of affairs to which the worker was exposed in the performance of his duties and to which he would not otherwise have been exposed, I see no misuse of English in condensing the statement of fact by saying simply that the employment was a contributing factor to the aggravation, acceleration, exacerbation or deterioration. It is in that sense that I should understand the language of the definition.
Windeyer J took a similar approach and said, (at 641):
When the Act speaks of ‘the employment’ as a contributing factor it refers not to the fact of being employed but to what the worker in fact does in his employment. The contributing factor must in my opinion be either some event or occurrence in the course of the employment or some characteristic of the work performed or the conditions in which it was performed. [emphasis added]
At my invitation, the parties made written submissions about the relevance, if any, of the Full Court’s decision in Drenth to the proper characterisation of the offending letter. In Drenth, a Full Court of the Federal Court considered the action of the Australian Tax Office (ATO) in advising its employee, Ms Drenth, that she could not come back to work absent satisfactory medical evidence of her fitness for work. The Full Court held that the ATO’s action constituted “reasonable administrative action undertaken in a reasonable manner”.
Counsel for Comcare, Ms Ford, contends that while the Full Court in Drenth did not address whether the action taken by the ATO constituted “employment”, nonetheless the following passage from the judgement (at [22]), is supportive of the proposition that a distinction can be drawn between a decision about the employment relationship and one about some feature of the workplace or environment or otherwise connected to the employee’s environment:
[A] decision that an employer is not prepared to allow an employee to return to work because of a medical opinion that the employee is then not fit and to require the employee to provide further evidence that he or she is fit, is quintessentially an action that is directed specifically to the employee. Such a decision does not affect him or her because it is some feature of his or her workplace or environment or is otherwise connected to the employee’s employment. Rather, it is a decision about the employment relationship itself. [emphasis added]
Consideration
The submission advanced by Comcare assumes that a neat distinction will always be able to be drawn between a decision concerning a feature of the workplace or otherwise connected to the employee’s employment and one about the employment relationship itself. There will sometimes be a degree of overlap between the two. The action of communicating a decision to terminate an employee’s employment is but one example. It could be characterised both as an “event” or “occurrence” in the course of the employment and a decision about the employment relationship itself.
The offending letter advised Ms Pettiford of a number of things: Dr Burek’s opinion that she was fit for work and Centrelink’s decision to accept that opinion and to take steps to facilitate her return to work. While falling short of a direction or requirement to return to work, the effect of the letter was that subject to Ms Pettiford’s feedback and consultation with her treating psychiatrist, she was expected to return to work.
While undeniably a decision about the employment relationship, the more difficult question is whether, as Ms Pettiford contends, it could be said to constitute “employment” within the definition of disease used in the Act. Kitto J in Federal Broom was not, as I understand Ms Pettiford to argue, referring to an incident or state of affairs relating to “work”, to use a neutral term, but to “some incident or state of affairs to which the worker was exposed in the performance of his duties and to which he would not otherwise have been exposed” [emphasis added]. That qualification was echoed by the comments made by Windeyer J: “some event or occurrence in the course of the employment or some characteristic of the work performed or the conditions in which it was performed”.
I accept as argued by Ms Pettiford that “but for” the fact that she was an employee of Centrelink she would not have been exposed to the decision about her return to work. However that is not the test imposed by s 5B of the Act to determine whether the necessary causal relationship exists between the claimed ailment and the employee’s employment. Rather the applicable test is whether the employee’s “employment” in the narrow sense employed by Kitto and Windeyer JJ, contributed to that ailment, or its aggravation.
For these reasons I conclude that the communication of the offending decision did not fall within the scope of the phrase “the employee’s employment with the Commonwealth” as used in s 5B of the Act.
Was Ms Pettiford’s pre-existing anxiety condition aggravated, to a significant degree, by her employment?
Neither parties addressed in their respective submissions whether any other matter apart from the offending letter, contributed to the aggravation of Ms Pettiford’s anxiety condition. I have decided to give the parties the opportunity to consider this issue and, if they elect, make further submissions. I have requested the Registrar to list the matter for a directions hearing.
I certify that the preceding 95 (ninety -five) paragraphs are a true copy of the reasons for the decision herein of Senior Member A K Britton .....................[SGD]...................................................
Associate
Dated 27 February 2014
Date(s) of hearing 18 and 19 November 2013 Date final submissions received 31 January 2014 Counsel for the Applicant David Richards Solicitors for the Applicant KCI LAWYERS Counsel for the Respondent Elenne Ford Solicitors for the Respondent AUSTRALIAN GOVERNMENT SOLICITOR
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