Sydney Harbour Federation Trust and Comcare and Radford (Joined Party)

[2008] AATA 1087

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 1087

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 3804 of 2007

GENERAL ADMINISTRATIVE DIVISION		)
Re		SYDNEY HARBOUR FEDERATION TRUST

Applicant

And COMCARE

First Respondent

And PAMELA RADFORD

Joined Party

DECISION

Tribunal Justice Tamberlin, Presidential Member, and Dr J D Campbell, Member

Date5 December 2008

PlaceSydney

Decision Section 14 of the Safety, Rehabilitation and Compensation Act 1988 (“the SRC Act”) is applicable to the injury suffered by the joined party. The joined party is entitled to compensation under the SRC Act. The decision under review is affirmed.

..............[sgd]............................

Justice Tamberlin, Presidential Member

CATCHWORDS

COMPENSATION – claim for compensation under s 14 of the SRC Act – whether process provided for promoting employee efficiency amounts to disciplinary action within the meaning of the definition of “injury” under s 4 of the SRC Act – whether conduct of employer was “reasonable” in terms of reasonable disciplinary – decision under review affirmed

RELEVANT ACTS:

Safety, Rehabilitation and Compensation Act 1988 (Cth): ss 4, 14

…

CITATIONS

Comcare v Chenhall (1992) 37 FCR 75

Comcare v Eames [2008] FCA 422

Peter Carson v Comcare [1998] AATA 644

Mitsopoulous v Comcare [1999] AATA 364

Choo v Comcare [1995] 39 ALD 399

Re Quarry v Comcare (1997) 47 ALD 123

...

REASONS FOR DECISION

5 December 2008 Justice Tamberlin, Presidential Member, and Dr J D Campbell, Member

Background

1.      Mrs Radford is a mature aged person with a long history of various employments in both the private and public sectors.  Mrs Radford commenced employment as an Executive Assistant (level six) with the Sydney Harbour Federation Trust (“the Trust”) on 26 April 2002.  In this role Mrs Radford reported to the Senior Executive of the Trust, Mr Bailey.  In this role, which continued until early January 2006, Mrs Radford believed she had received good performance reviews from Mr Bailey, while also noting that she had been advised that documentation relating to such reviews was no longer available.

2.      In October 2005, Mrs Radford was involved in a discussion with Mr Moy, a Human Resources Consultant retained by the Trust, concerning the creation of a new position of Licensing Officer within the structure of the Trust.  This position was offered to Mrs Radford with maintenance of her level six salary.  After discussion with Mr Bailey, Mrs Radford advised Mr Moy that she wished to remain in her current position of Executive Assistant.

3.      In December 2005, further discussions were held between Mr Moy, Ms Ephgrave, the Director of Corporate Services, and Mrs Radford concerning the position of Licensing Officer.  During such discussions it was requested of Mrs Radford that she take up the position, as the Trust had not been able to find a suitable applicant and that her position of Executive Assistant was to be downgraded from a level six to level four.  After further discussions with Mr Bailey, Mrs Radford agreed to take up the position of Licensing Officer.

4.      Mrs Radford commenced her role as Licensing Officer on 9 January 2006.  Mrs Radford’s duties in the role involved:

a)    The licensing of the Sydney Harbour foreshore assets of the Trust for functions and other activities.  This included duties of working through which sites to license, what activities could be undertaken within each license and in what buildings such licensed activities could occur.  Further, the duties involved establishing guidelines and drafting procedures for licenses as well as researching license fees and bond structures.

b)    Preparing a standard application form and licensing agreement on the web as well as establishing 2005/2006 and 2006/2007 budgets for licensing activities, namely, revenue and expenditure budgets.

c)    To make recommendations regarding preferred service providers for catering, ferry and barges – the licensing conditions associated and the nature of infrastructure required.

d)    Create a new database for all licensing activities for all Trust staff, as well as follow up inquiries on the Property Marketing and Management database.

e)    Establish internal approval processes for granting licenses, in conjunction with marketing licensing sites and policies to the public.

f)     Manage existing licensing activities including renewals and terminations, understand works programme for each site and agree resources for specific licenses.

g)    Generate revenues from licensing activities consistent with budget and respond to day to day issues requiring resolution.

h)    Coordinate the preparation of Board and Audit Committee Agenda for meetings (July 2005 to May 2006).

i)     General management of Executive Director’s Office and diary management (July 2005 to January 2006).

5.      Mrs Radford contends that she had no previous marketing qualifications and had not received any training in relation to fulfilling the role of Licensing Officer.  Mrs Radford further contends that she had no experience in drawing up a list of objectives inherent to the 12 month work plan requested by Mr Woodmansey, the Director of Property Marketing and Management.  Mrs Radford also contends that when she submitted her work plan to Mr Woodmansey he made a number of significant changes to the deadlines for completion (some by March 2006), with 11 others listed as number one priority.  Such changes, in Mrs Radford’s opinion, did not take into account a backlog of nine months of deferred licensing requests, the composite nature of her activities and the lack of training and a period of induction to assist in the performance of her role.

6.      Mrs Radford contends that she received little assistance from Mr Woodmansey, and that when Mr Todman was appointed in mid-February 2006 as Mr Woodmansey’s deputy, he, being a new employee, was unable to provide effective supervision and support.  In his affidavit dated 13 February 2008 Mr Todman states that he became Mrs Radford’s immediate supervisor from May 2006, although from time to time Mrs Radford was required to report to his superior Mr Woodmansey.  Mr Moy details a similar situation in his affidavit of 13 February 2008.

7.      Mrs Radford contends that she had a meeting with Mr Woodmansey and Mr Todman on 1 May 2006 at which she was informed she was ”on probation”, as she had not made sufficient progress in terms of completing the objectives and deadlines nominated in her work plan.

8.      Mrs Radford contends that she later met with Mr Todman in May 2006 to discuss her difficulties in performing her role.  Mr Todman confirms that such a meeting took place at the request of Mr Moy and Ms Ephgrave with the purpose of the meeting to discuss the requirements of her role, reorder her time frames, suggest ways of dealing with enquiries and ensure that he had daily discussions with her to ensure she was achieving the requirements of her position.

9.      Mrs Radford contends that, at a meeting on 14 June 2006, Mr Todman acknowledged that he was satisfied with her approach and work to meet the deadlines established in their meeting of early May 2006.  Mr Todman acknowledged in oral evidence that Mrs Radford had satisfied some performance deadlines, but in the meeting he had also identified other areas of deficiencies and provided details of additional support and resources that would be provided to Mrs Radford in order to improve her performance.

10.     On 21 August 2006 Mrs Radford attended a meeting with Mr Todman, Mr Moy and Ms Ephgrave at which she was presented with her performance assessment for 2005/2006.  Overall the assessment concluded that Mrs Radford was not effective in her role, that she had not performed adequately in her role, has generally not met the key requirements of the position and has not responded well to attempts to assist her.

11.     At the meeting of 21 August 2006 Mrs Radford was advised that she could respond to the appraisal in writing at a later time or proceed through the appeals process.  Mrs Radford was also advised that as a consequence of her non-effective rating it would be necessary for the Trust to meet with her to establish a performance improvement plan to improve her performance to a point where it is considered acceptable.

12.     On 25 August Mrs Radford requested an internal review of the appraisal report pursuant to clause 41 of the Sydney Harbour Federation Trust Terms and Conditions of Employment Determination No. 1 of 2004.  Mrs Radford also believed it to be unfair to proceed with the implementation of a performance improvement plan pursuant to clause 84 of the Determination No. 1 of 2004, until issues related to her appeal against the performance appraisal were finalised.

13.     On 30 August 2006 Mrs Radford was advised by Ms Ephgrave that Mr Bailey, the Executive Director, considered that Mr Hollo, the deputy Executive Director was a person of utmost integrity and had appointed Mr Hollo as the review officer to conduct the internal review of her appeal concerning the 2005/2006 work appraisal report pursuant to clause 42 of Determination No. 1 of 2004.  Mrs Radford expressed concern over such an appointment, in that Mr Hollo’s personal and working relationships with people involved in her appraisal could affect his ability to conduct an unbiased review.  Mr Bailey referred Mrs Radford’s concerns over the appointment of Mr Hollo to the Board Chairperson on 13 September 2006, with Mrs Radford being advised on 21 September 2006 by Ms Ephgrave that Mr Hollo’s appointment as the review officer had been confirmed by the Chairperson.

14.     In relation to the performance improvement plan, a series of meetings were held on 18 September 2006 and twice on 20 September 2006, with Mrs Radford electing to participate in such meetings without the assistance of a support person.  The purpose of the meetings was to finalise a performance improvement plan to which Mrs Radford had had adequate opportunity to provide input.

15.     On 27 September 2006 a meeting was held to finalise the performance improvement plan.  Mrs Radford is noted as having been a reluctant attendee.  Mrs Radford contends that she did not wish to attend the meeting without a support person and had advised Mr Todman in that regard on 26 September 2006.

16.     At the meeting on 27 September 2006 Mrs Radford was provided with a copy of the finalised performance improvement plan – a plan varying in content from earlier drafts.  Mrs Radford was also provided with a formal warning letter, dated 27 September 2006.  The final paragraph of the letter states:

This letter is to serve as a formal warning that you have not performed at the required standards for your position as Licensing Officer.  Our specifications about the performance expectations that you have not met are set out in the Performance Appraisal Form.  Should your performance not improve to required standards within the period of the PIP, the Trust will consider appropriate disciplinary action, which may include terminating your employment in accordance with the Sydney Harbour Federation Trust, Terms and Conditions of Employment, Determination No.1 of 2004.

17.     On 27 September 2006 Mrs Radford consulted Dr Tringali, a general practitioner, who certified that Mrs Radford suffered an injury of “anxiety/depression” due to workplace harassment, and that she was unfit for work from 27 September 2006 to 4 October 2006.  Mrs Radford did not return to work after 27 September 2006, with her employment being terminated on 24 May 2007.

18. Mrs Radford lodged a claim for compensation on 10 October 2006 for anxiety and depression due to workplace harassment, which she attributed to her employment as a Licensing Officer at the Sydney Harbour Federation Trust. On 16 February 2007 Comcare rejected liability pursuant to section 14 of the Safety, Rehabilitation and Compensation Act 1988 (“the SRC Act”). In a reviewable decision dated 5 July 2007, the determination dated 16 February 2007 was revoked. In substitution, Comcare determined that Mrs Radford was entitled to compensation pursuant to section 14 of the SRC Act for adjustment disorder with anxiety and depression.

Issues

19. The first question in this case is whether the process provided for in Determination 1 of 2004 concerning SHFT Terms and Conditions of Employment in relation to steps that may be taken to promote the efficiency of an employee amounts to disciplinary action within the meaning of the definition of “injury” under s 4 of the SRC Act.

20.     If the answer to this question is in the affirmative, the second issue is whether the conduct of the Trust up to and including 27 September 2006 in relation to Ms Radford was “reasonable”, so that the actions can be described as reasonable disciplinary action taken against Ms Radford.

21. If both issues are answered in the affirmative then the employee is not entitled to compensation under s 14 of the Act.

Regulatory Framework

22.     The framework within which the characterisation of the conduct of SHFT is to be evaluated is found in Part 6 of the Terms and Conditions of Employment which is headed “Managing and Supporting Our People”.  Part 6 refers to the Trust developing a people management framework concerned with workforce planning, staffing practices, performance management, staff relations, and working conditions.  It deals with a selection of employees, probation periods, induction and career development, and has provisions with respect to employee assistance and most importantly performance management.

23.     Clause 73 of Part 6 provides that the Trust is committed to developing a performance culture that promotes excellence respected by both management and employees. It refers to the Performance Management Scheme as one of the Trust’s key tools for fostering a high performance culture.  In relation to the managing of under-performance, Clause 82 expresses the emphasis as being on managing individual under-performance to assist and guide the employee to improve their performance to a satisfactory level so that their skills, knowledge and experience, and their contribution to the Trust, are effective and positive.

24.     Under Part 6, supervisors are responsible for identifying serious under-performance in employees. There is a consultation process and discussion with the employee and after this discussion a supervisor may decide to establish a Performance Improvement Plan with agreed targets over a period of one to three months.  At this point a formal warning in writing may be issued setting out details as to why the performance is unsatisfactory, a Performance Improvement Plan and Method of Assessing and possible consequences if the employee has not attained and sustained the required standards by the end of the assessment period.  Such a plan must be developed by the supervisor in consultation with the employee who will outline the work to be undertaken by the employee over the period.  The assessor or supervisor is required to provide regular feed-back on performance to the employee during the assessment period.

25.     When the Performance Improvement Plan is completed the supervisor must assess the employee’s performance, and complete an assessment report summarising action taken in relation to the Plan, and views as to whether the employee has met the expected standard of performance.  A copy must be provided to the employee and the relevant director, and the employee has seven days in which to provide written comments regarding the assessment report.

26.     By Clause 97, if the supervisor’s assessment against the Improvement Plan is that the performance remains unsatisfactory then the Assessment Report will be provided to the Executive Director of the Trust together with the employee’s responses and any other documentation which the supervisor may feel relevant.  The supervisor then consults with the relevant direct or and determines an appropriate course of action having regard to the circumstances.  Clause 99 refers to appropriate action as including reassignment to other duties, reducing the employee’s classification, termination of employment or some other action.

27.     After considering the above options, the Executive Director writes to the employee advising of the action considered appropriate and asks the employee to show cause.  After that the employee has seven working days to show cause and the Executive Director can approve an extension of time.  At the end of the seven working days the Executive Director after considering any matters raised by the employee may issue a Notice of Termination of Employment or reassign duties at or below the classification level of the employee

28.     The provisions relating to Performance Management are directed to ensuring efficient performance of duties and before the step is taken to terminate the employee or reassignment of duties the consultation and Performance Management Plan needs to be in place and assessed.  Then the process is provided for in relation to the taking of appropriate action requires consultation, consideration and discussion with the employee.  At the end of this process the Executive Director may decide to issue a Notice of Termination or reassign.

29.     The underlying tone and gist of the provisions under Part 6 is one of supporting employees and assisting them to perform their duties and it is only at a late stage in this proceeding that it can be said steps are taken to make a determination which will result in ultimate sanction of the solution of termination or reduction in status.  The emphasis throughout is on supporting the employee up to the stage where the assessment process is complete.

30.     Accordingly, on reading the provisions as a whole, the context indicates that at the stage where the assessment under the Performance Plan is made the emphasis is on enabling greater efficiency in assisting the employee to achieve a better result rather than to discipline the employee.

31.     According to the Oxford Dictionary the adjective “disciplinary” bears a meaning of pertaining to, promoting or enforcing discipline to behaviour. Under the Terms of Employment, the emphasis is on sharing effective outcomes from an employee, rather than on forcing disciplined behaviour or behaviour which is subject to discipline. The definition of “discipline” has connotations of controlling behaviour rather than assisting the promotion of effective and efficient behaviour.

32.     There is no clear-cut distinction between what is disciplinary and what is managerial conduct, except that the notion of management indicates conduct directed to the achievement of effective outcomes by rules designed to constrain behaviour.  There is a distinction between assisting someone to perform effectively and imposing discipline on a person which requires them to act efficiently. In the present case the Performance Improvement Plan possesses the character of a set of goals, which the employee should aim to achieve in order to properly carry out the obligations of the position in question.

Disciplinary Action – Principles

33.     The question as to what constitutes “disciplinary action” has been relevantly considered in several decisions of the Federal Court at first instance and by the AAT. 

34. “Injury” is defined in s 4 to exclude any disease suffered by an employee as a result of reasonable disciplinary action taken against the employee.

35.     The guiding principles in deciding what constitutes “disciplinary action” were considered by Cooper J in Comcare v Chenhall (1992) 37 FCR 75. In that case, his Honour decided that “disciplinary action” would be taken against an officer under the regime in force under the Public Service Act 1922 when a step is taken which required the Chief Officer of Police or the Appeal Board to exercise their statutory functions.  At pp [89]-[90] his Honour said:

‘In my view disciplinary action is not lawfully taken against a member of the Australian Federal Police until such time as the Commissioner determines, in accordance with the Discipline Regulations or the Complaints Act, after the provisions of the General Order have been complied with, to take some action against a particular member in respect of a defined disciplinary offence and takes one of the steps provided for under the Discipline Regulations or the Complaints Act to give effect to that determination.’

36.     The thrust of his Honour’s reasoning in that case was that disciplinary action is not taken until such time as a determination is made to take action, and one of the steps provided for to give effect to that determination to discipline the employee is taken.  In the present case there has not been a determination to take action, or to take a step to give effect to such a determination. There has been an intimation that termination may be considered if the Performance Improvement Plan, foreshadowed on 26 September 2006, is not complied with.

37.     In the course of his consideration of the expression “disciplinary action”.  Cooper J made the following observations:

·A decision to determine whether or not disciplinary action is to be taken against an employee, although able to be classified as part of a process to maintain discipline, is not itself disciplinary action.

·Proven misconduct against an employee is not necessary.

·Disciplinary action need not be punitive.

·It is the disciplinary action itself and not the steps leading to the decision to take the action which is important.

·It is necessary to consider the nature of the action in the context of the particular regulatory rules applicable to the employee.

·Imposition of a “sanction” is not necessary.

38.     The principles in Chenhall were recently applied by Madgwick J in Comcare v Eames [2008] FCA 422 at [34] and [46]. His Honour held in that case that an investigation of conduct and the reporting of findings to Parliament was disciplinary action even though it was decided not to take any action.

39.     More directly in point in the present case are the observations of von Doussa J in PeterCarson v Comcare [1998] AATA 644. In that case his Honour considered the SHRHA Act and formed the view that, having regard to the Performance Management Scheme then in operation, that its operation did not give rise to “disciplinary action”.  His Honour observed at [24]:

“It is not suggested by the respondent that the proviso to the definition of injury applies so as to exclude the ailment suffered by Dr Carson from the definition of ‘injury’.  The inefficiency procedure did not constitute disciplinary action, nor did it relate to a failure by Dr Carson to obtain a promotion, transfer, or benefit in connection with his employment.  On the contrary, it was a procedure undertaken to ascertain if he should be dismissed from his employment on the ground that he was not able to effectively discharge the requirements of his position.”  (Emphasis added)

40.     Although this is obiter, it is an observation directly on the issue to the effect that the Performance Management Scheme process under the Act precedes and is not itself the disciplinary action, because it provided for a process directed to the effective operation of the employee’s duties and not to discipline.

41.     There have been a number of decisions in the AAT pointing in different directions on the question of disciplinary action.  In Mitsopoulous v Comcare [1999] AATA 364 at [27] the Tribunal expressed the view, without referring to the judgment of von Doussa J in Carson, that the recommendation to an employee of a performance improvement program was reasonable disciplinary action.  No authorities were referred to.  That case, however, was concerned with an employee who was unable to cope with the work in circumstances where the Bank knew (i) that she was not coping; and (ii) that she had required a transfer, and (iii) there was a positive finding that neither by experience nor by intellect could the applicant operate at the required skill level.  She had refused the transfer and this had led to her depressive condition.

42.     There was a finding in Mitsopoulos that it was not the placing of the employee on the program that caused the illness but rather the circumstances that preceded the taking of that step.  The decision is distinguishable from the present circumstances.  If the statement at [24] was intended to convey a general conclusion that a performance management scheme under the SHRA is “disciplinary action” then it is inconsistent with Carson and is in our view wrong.

43.     Again in Choo v Comcare [1995] 39 ALD 399 at [29], the Tribunal was satisfied that a counselling session with Mr Choo was part of disciplinary action taken by the employer. Again, the facts are distinguishable, but if the statement at [29] was intended to be by way of general observation universally valid we think that the observation was wrong.

44.     The reasoning in Choo was distinguished in a later decision of the Tribunal of the AAT in Re Quarry v Comcare  (1997) 47 ALD 113 at [30] where the AAT said at [33]:

“(33)    Having regard to the discipline or rules of conduct applicable to the applicant, the circumstances in which the Commonwealth can take action pursuant to the relevant statutory provisions, and the type of action that it can take if the circumstances warrant it, we believe that the counselling sessions involving the applicant must be characterised as preliminary discussions at a stage when the applicant’s superior officers were seeking both to assist her and to assess what action was appropriate.  We believe that these counselling sessions are in the same category as the assessment referred to in Bennett.  They were not disciplinary action. They were action taken to determine whether or not disciplinary action would be taken in relation to the applicant.  We believe that in so characterising the assessment in Bennett Deputy President Burns correctly applied Chenhall, and that we must do the same.”  (Emphasis added)

45.     This statement and that in Peter Carson strongly support the conclusion that in the present case the conduct of SHFT up to and including 27 September 2006 in relation to Ms Radford was not “disciplinary action” against her.

Reasoning

46.     The submission for the Sydney Harbour Federation Trust is that the Performance Management Plan, together with the meetings and conduct up to 27 September 2006 and the presentation of the Performance Improvement Plan, together with the warning notice, was “disciplinary action.”

47.     This submission is advanced on the basis that the process of Performance Improvement set out in Determination 1 is “disciplinary” in character.  However, with regard to the line of authorities and especially the observations of von Doussa J in Carson above, with which we agree, the course of conduct was not “disciplinary action” but was rather pre-disciplinary, and directed to effecting greater efficiency in the operation of the Trust by means of the management of performance designed to assist the employee who was expressing considerable difficulty in coping with her workload to perform more effectively.

48.     As a consequence of our conclusion concerning the absence of “disciplinary action” in this case it is not necessary for us to consider the second issue which is whether the conduct up to and including 27 September 2006 can be properly categorised as unfair “disciplinary action”.

49. In summary, we consider that the disease of Ms Radford was not suffered as a result of any disciplinary action. Accordingly, s 14 of the Act is applicable and we dismiss the application. The applicant is to pay the costs of the joined party. There is no order for costs in relation to the first respondent.

I certify that the 49 preceding paragraphs are a true copy of the reasons for the decision herein of Justice Tamberlin, Presidential Member, and Dr J D Campbell, Member

Signed:         .............[sgd]...................................................................
  Associate

Dates of Hearing  25 and 26 August 2008
Date of Decision  5 December 2008
Counsel for the Applicant         Mr M Vincent
Solicitor for the Applicant          Ms B. Kitchener, Australian Business Lawyers
Counsel for the Respondent     Mr G Elliott
Solicitor for the Respondent     Ms M Mittiga, Dibbs Abbott Stillman
Counsel for the Joined Party     Mr P J Menary
Solicitor for the Joined Party     Mr D Trainor, W G McNally Jones Staff Lawyers