Walker Kaye and Comcare (Compensation)
[2017] AATA 2998
•13 December 2017
Walker Kaye and Comcare (Compensation) [2017] AATA 2998 (13 December 2017)
Division:GENERAL DIVISION
File Number(s): 2016/5396
Re:Alison Walker Kaye
APPLICANT
ComcareAnd
RESPONDENT
DECISION
Tribunal:Deputy President Greg Melick AO RFD SC
Date:13 December 2017
Date of written reasons: 8 February 2018
Place:Canberra
For the reasons given orally at the conclusion of the hearing of this matter, the Tribunal sets aside the reconsideration made on 8 September 2016 affirming the original determination made on 29 July 2016, and decides that the Applicant is entitled to payment of compensation from 2 December 2015 until 15 May 2016.
........................................................................
Deputy President Greg Melick AO RFD SC
CATCHWORDS
COMPENSATION – Commonwealth employees – whether the actions taken by the employer or a continuum of them were reasonable administrative actions carried out in a reasonable manner – 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- what is relevant is an objective assessment of the reasonableness of the action, and the way in which it was carried out - work-related injury - refusal to participate in a salary review was an unreasonable action – adjustment disorder with anxiety and mixed emotional features
LEGISLATION
Safety, Rehabilitation and Compensation Act 1988, ss 4, 5A, 5B, 6, 7, 14
CASES
Bropho v Human Rights and Equal Opportunity Commission (2004) FCAFC 16; 135 FCR 105
Comcare v Martin [2016] HCA 43; 258 CLR 467
Comcare v Martinez (No 2) [2013] FCA 439 (2013) 212 FCR 272
Hart v Comcare [2005] FCAFC 16; 145 FCR 29
Keen v Workers Rehabilitation and Compensation Corporation (1998) 71 SASR 42
Re Georges v Telstra Corporation [2009] AATA 731
RSBQ v Comcare (Compensation) [2017] AATA 1965
WRITTEN REASONS FOR ORAL DECISION
Deputy President Greg Melick AO RFD SC
8 February 2018
The applicant seeks a review of a reviewable decision of the respondent dated 8 September 2016 whereby it was decided that the respondent was not liable to pay compensation pursuant to s 14 of the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act) in relation to the applicant’s adjustment disorder with anxiety and mixed emotional features.
The matters are considered to be the same injury in accordance with the definitions set out in ss 4, 5A, 5B, 6 and 7 of the SRC Act and whether the applicant is entitled to compensation under s 14 of the Act.
It is conceded that the applicant’s employment has significantly contributed to her medical condition as set out in the claim for compensation dated 6 May 2016. It is also conceded that the applicant’s condition has impaired the capacity for work that the exclusive provisions set out in s 5A relied upon by the respondent deny liability.
In short, the matters that I have to consider are whether the four sets of actions, or a continuum of them, referred to below, were reasonable administrative actions carried out in a reasonable manner.
It is conceded that the applicant suffered a workplace injury, that she contends occurred on or about April 2015, and that the respondent contends occurred on or about December 2015. The applicant contends that the injury did not manifest itself until December 2015 because she had not been required to return to work until that date. If she had been required to attend work in April 2015 it would have been apparent at the time.
The applicant contends that the injury arose as a result of four matters:
(a)the making of an employment contract on about 30 April 2015, which she contends was reasonable administrative action, but carried out in an unreasonable manner;
(b)the application of a new employment contract on or about 28 August 2015, which she claims to be unreasonable administrative action carried out in an unreasonable manner;
(c)the non-implementation of a compromise agreed to at a Fair Work Commission hearing held on 27 November 2015, and the non-implementation as alleged to have occurred on or about 3 December 2015; and
(d)the misapplication of clause 13 of the new contract in relation to a motor vehicle, which she discovered in January 2016, despite the fact she had been underpaid for many months.
Relevant facts
The relevant facts are very helpfully set out in the respondent’s statement of facts, issues and contentions, and the applicant agreed that they accurately reflect the objective facts. Accordingly, subject to some minor corrections, I adopt paragraphs 3.1 – 3.49 and paragraph 3.58 of the respondent’s statement of facts, issues and contentions, which read as follows:
3.1 The Applicant is 61 years of age (DOB 8 August 1955).
3.2 From 12 April 2000 to 31 January 2017 the Applicant was employed by the National Capital Authority (NCA).
3.3 Throughout the relevant period (2014 and 2015) the Applicant was employed as Executive Director, National Capital Estate, an SES Band 1 position.
3.4 On 22 February 2010 the Applicant signed an SES employment contract (T19A). The terms of the contract stipulated it was to operate for a period of 5 years, or until:
(a)an Enterprise Agreement that applied to the Applicant came into operation, or
(b)a determination made under the Public Service Act 1999 (PSA) came into effect that applied to the Applicant and expressly replaced the existing contract (T19A, p220).
3.5 The Applicant received salary increases in each of 2010, 2011, 2012, 2013, and 2014 (T20F).
3.6 For the 2013 – 2014 performance assessment period the Applicant received a ‘satisfactory’ performance rating (T20G).
3.7 On 7 October 2014 the Applicant advised Mr Snow, Chief Executive, NCA that further to recent discussions she wished to utilise all of her annual leave and long service leave at half pay, at the earliest opportunity. The Applicant estimated her absence would be in the order of 12 months (T19B, [p346]).
3.8 By email dated 14 October Mr Snow advised the Applicant of his in-principle support for her leave request. He outlined that he would determine an acceptable date for the Applicant’s leave to commence. He noted that he would like a one week overlap for handover with the person selected to act in the role during the Applicant’s leave (T19B, pp[345] – 346).
3.9 By return email the Applicant thanked Mr Snow for his support. The Applicant further noted in her email that, further to discussions the previous day about ‘the dates of my employment contract, my copy of the contract indicates commencement in February 2010 to continue for a period of 5 years’ (T19B, p345).
3.10 On 16 October 2014 Mr Snow advised the Applicant she would be shown a draft email advising staff of her leave, and provide a mid-November commencement date, subject to recruiting a temporary replacement (T19B, p345).
3.11 On 21 October 2014 Mr Snow emailed all staff to advise that he had agreed to the Applicant taking a well-earned period of 12 months long service leave (T19B, p344).
3.12 From 4 December 2014 to 13 March 2015 the Applicant took Annual Leave at half pay (T8C, p116).
3.13 From 16 March 2015 to 4 December 2015 the Applicant took Long Service Leave at half pay (T8C, p116).
3.14 On 15 April 2015 Mr Snow, Chief Executive, NCA emailed the Applicant to advise that a Determination had been made pursuant to s24(1) of the Public Service Act 1999 (PSA) (T15, pp176 – 177). The Applicant was advised in the email that:
(a)The Determination would take effect from 27 April 2015[1], and that it would completely displace a prior SES Common Law Contract which had been signed on 22 February 2010.
[1]The commencement date was later amended to 5 May 2015, being the date the Applicant signed Determination 2015/02 (T15, p. 189) (footnote in original).
(b)Her signature was required in an acknowledgement section in order to authorise the inclusion of an additional $20,000 to count for superannuation salary under Clause 12.1 (which reflected an existing provision in the previous Common Law Contract).
3.15 On 23 April 2015 the Applicant emailed Mr Snow to confirm receipt of the Determination, and to query clause 13.2. The Applicant asked whether the intention of the clause was that the Applicant would not be entitled to a payment in lieu of a motor vehicle allowance during leave with pay of 20 consecutive days or more (T15, p176).
3.16 On 24 April 2015 Mr Snow emailed the Applicant to confirm that the Applicant’s interpretation of Clause 13.2 was correct. He also clarified that the clause ‘actually covers any leave without pay or leave with pay of 20 consecutive working days or more.’ Mr Snow outlined the rationale for the clause was to equate the position of an employee who elected to receive payment in lieu of a motor vehicle to the position which would apply if that person had elected to receive a work motor vehicle.
Mr Snow further outlined he was willing to consider an adjustment, so that the clause would apply only when the Applicant took paid / unpaid leave of more than 30 consecutive working days (T15, pp175 – 176).
3.17 On 27 April 2016 the Applicant emailed Mr Snow to confirm her understanding of the ‘sentiment regarding [replication]’, but outlined the effect was to reduce her entitlement. The Applicant outlined that:
(a) She may have made a different election had she known ‘there would be an amended outcome to my detriment’.
(b) She was not aware of any SES officer having to return a work motor vehicle during leave.
Applicant advised she would not sign the Determination, as it ‘diminishes my entitlement and would ask you to reconsider this determination in the interests of fairness’ (T15, p175).
3.18 On 30 April 2015 Mr Snow advised the Applicant that he would not reconsider clause 13.2. Mr Snow further advised:
(a) He was able to make a Determination under s24 of the PSA without an employee’s acknowledgement.
(b) However, the Applicant would need to sign an acknowledgement in order to authorise the inclusion of an additional $20,000 to count for superannuation salary, pursuant to clause 16.1 of the Determination (T15, pp174 – 175).
3.19 On 5 May 2015 the Applicant signed the Determination, labelled Determination 2015/2 (T15, p179).
3.20 On 6 May 2015 the Applicant emailed Mr Snow to advise she had signed Determination 2015/2 (T15, p174). The Applicant advised her signature was made under protest. The Applicant advised:
(a) She considered the Determination had unfairly singled her out.
(b) She was shortly departing for an overseas trip.
(c) She could not challenge the Determination in the available timeframe. She acknowledged her signature was required to authorise an additional payment for superannuation purposes.
(d) She had ‘no option’ but to sign the Determination or ‘risk losing even more of my entitlements’.
(e) She reserved the right to ‘address this in the future’.
The Applicant further stated:
[‘]Over the past couple of years, I have been required to take over an entirely new function, without any recognition of the additional responsibility in my entitlements. I successfully delivered this new function and had every expectation that this would be recognised when my new employment contract was being negotiated. I would ask you to consider this request in light of my performance and long-standing commitment to the organisation.’
3.21 By email dated 15 May 2015 (T19B, p310) Mr Snow advised the Applicant that, in recognition of the Applicant signing Determination 2015/2 he had adjusted the commencement date to the date of her signature. Mr Snow advised that:
(a)On the Applicant’s return to the NCA he was more than happy to arrange for a new evaluation and work value assessment of the classification of the Applicant’s nominal position, against the service wide work level standards for the SES.
(b)Given the results of the previous review in July 2013, he doubted the changes to responsibilities since July 2013 would warrant a reclassification of the position to SES Band 2.
(c)The Applicant had received an average salary increase of 3.8% of an SES Band 1 officer over the previous 5 years. On her return to work he would be prepared to undertake an appropriate review of her total remuneration. It would examine and benchmark the Applicant’s responsibilities against SES Band 1 officers in other APS agencies with similar responsibilities.
3.22 By letter dated 21 May 2015 [T19B, pp307 – 308] Ian Kaye wrote to Mr Snow to advise he had been appointed as the Applicant’s bargaining representative in relation to the ‘proposed’ determination under s24(1) of the PSA. Mr Kaye outlined that:
(a)The Applicant was seeking a base pay increase of $20,907 in recognition of productivity improvements put in place and additional responsibility the Applicant had taken on over the past 2 – 3 years.
(b)The Applicant wanted to have proper pay negotiations with the Chief Executive and not have her pay linked to the outcome of unrelated negotiations.
(c)Clause 13.2 was in breach of the government’s bargaining policy in that it had been applied to her situation retrospectively.
(d)The Applicant was concerned about the arrangements relating to excess employee provisions in clause 23 of the Determination. The Applicant asked that any amount offered as an incentive to retire be agreed as between the Chief Executive and herself.
(e)The Applicant believed that the dispute resolution procedures gave rise to a potential conflict of interest if a dispute arose to which the Chief Executive was a party, namely, it would not be fair to have the Chief Executive decide the outcome of the dispute.
3.23 On 25 May 2015 Mr Snow emailed the Applicant in response to the letter dated 12 May 2015 (T15, pp187 – 188) which had been received on 21 May 2015. Mr Snow advised:
(a)Determination 2015/2 had commenced on 5 May 2015, as advised by email dated 15 May 2015.
(b)Under the terms and conditions of Determination 2015/2 there was ‘no provision for a bargaining process or for you to appoint a bargaining representative.’
(c)On her return to duty, Mr Snow would:
(i)Arrange for a work value assessment of the Applicant’s substantive position against the Work Level Standards for the Senior Executive Service (SES).
(ii)Undertake an appropriate review of the Applicant’s total remuneration. The review would examine and benchmark the role and responsibilities of the Applicant’s substantive position against similar SES Band 1 officers in other APS agencies with similar responsibilities.
(iii)Provide an opportunity for the Applicant to make a submission.
(d)He would not be entering into any bargaining process or further discussions with the Applicant, or her representative, in relation to the terms and conditions of the Applicant’s employment until her return to duty in November 2015.
3.24 A meeting was held on 9 June 2015 between the Applicant, her representative Ian Kaye and Mr Snow to discuss changes the Applicant wished to have made to Determination 2015/2 (see T19B, p289).
3.25 On 15 June Mr Snow emailed the Applicant to advise of decisions made in relation to representations made by Ian Kaye concerning the terms and conditions of the Applicant’s employment as outlined in Determination 2015/2 (T19B, pp289 – 291). Mr Snow advised that a new Determination, Determination 2015/3 had been issued, as he had agreed to amend the following provisions of Determination 2015/2:
(a)Clause 12 – the new Determination would not link any potential increase in the Applicant’s salary to the same percentage increase paid to other employees under the NCA Enterprise Agreement.
Mr Snow advised that the ‘new provisions provide for an annual review of your base salary and a base salary increase, if any, will be agreed between us.’
(b)Clause 13 – the new Determination would continue an annual allowance of $20,000 in lieu of provision of a motor vehicle, to be paid on a pro-rata basis per fortnight for the entire period of the Applicant’s current leave.
(c)Clause 28 – the new Determination would provide for a new arrangement for resolving disputes. Namely, if the Chief Executive was a party to a dispute, the dispute would be referred to a mutually agreed independent mediator.
Mr Snow outlined that he had not agreed to the following:
(d)A further increase to annual salary to be backdated to 1 September 2014 (noting the Applicant had received a 3.5% increase to annual salary from 1 September 2014).
On the Applicant’s return to work an appropriate review of the Applicant’s remuneration would be taken, by way of benchmarking her role and responsibilities against other similar SES Band 1 officers in other APS agencies with similar responsibilities.
(e)To include a requirement that an amount offered for incentive to retire be agreed as between the Chief Executive and the Applicant.
Mr Snow outlined that to do so would be in breach of the requirements relating to s37 of the PSA as it would require that the rights under s37 only be exercised with the Applicant’s agreement. Mr Snow set out the legislative requirements, and the process he would follow should an incentive to retire be offered.
Mr Snow further advised:
(f)The Applicant’s signature was not required for the Determination to take effect. However, the rules of the Public Sector Superannuation Scheme (PSS) require written evidence of an agreement between the Applicant and NCA to authorise payment of superannuation contributions based on a superannuation salary $20,000 higher than the Applicant’s annual base salary.
3.26 Mr Kaye advised Mr Snow on 15 June 2015 that the Applicant was considering her position (T19B, p292).
3.27 By [email] dated 17 June 2015 (T20B, pp375 – 376) Ian Kaye emailed Mr Snow to advise:
(a) He had spoken to the Applicant that morning and she asked him to thank Mr Snow for ‘allowing her the opportunity to put her views through me to you and your team.’
(b) The Applicant acknowledged Mr Snow’s view on the issues discussed and, whilst she did not agree with all aspects, she had decided to accept the revised determination as provided.
(c) The Applicant would sign the Determination in due course.
3.28 By email dated 18 June 2015 Mr Snow emailed the Applicant to thank her for accepting the revised Determination. Mr Snow noted that back pay and reinstatement of [the $20,000 in lieu of the provision of a private plated motor vehicle for the entire period of the Applicant’s current leave] would be processed upon receipt of the signed Determination (T20B, p375).
3.29 On 25 June 2015 Mr Kaye advised Mr Snow the Applicant has signed Determination 2015/3 (T19B, p287).
3.30 On 24 June 2015 the Applicant signed a Determination issued pursuant to s24(1) of the PSA (T12). On 2 December 2015 the Applicant was certified unfit for work from 7 December 2015 to 1 January 2016 (T5D [,p84]) by Dr Thomson, GP. This certification was subsequently extended through to 13 May 2016 (T5D, pp85 – 89).
3.31 On 7 August 2015 Ian Kaye emailed Mr Snow to advise the Applicant had appointed him to represent her in relation to her salary review (T19B, pp279 – 280). Attached was a document titled ‘salary review against APSC bargaining policy’ (T19B, pp281 – 284). The Applicant sought a 10% pay increase, effective from 1 September 2015 for productivity gains reported to have been implemented from 2008 onwards.
3.32 On 18 August 2015 Mr Kaye emailed Mr Snow. Mr Kaye urged Mr Snow to consider the Applicant’s submission seriously, expressing the view that the Applicant’s claim was strong because she had demonstrated numerous productivity improvements which had not been taken into account in previous increases to salary (T19B, p279).
3.33 On 28 August 2015 the Applicant emailed Mr Snow to advise she had returned to Australia and was seeking a response to her salary review (T19B, p276).
3.34 Mr Snow responded on 28 August 2015 to advise that following the Applicant’s return to work he would undertake an appropriate and independent review of the Applicant’s total remuneration, which would benchmark the Applicant’s position against similar Band 1 SES officers in other Agencies (T19B, pp275 – 276). Mr Snow further advised that he did not consider any further increase to the Applicant’s annual salary from 1 September 2014 was justified at that stage.
3.35 By letter dated 29 September 2015 (T19B, p277) the Applicant advised Mr Snow that she was raising a dispute in accordance with clause 28 of Determination 2015/3. The Applicant outlined:
(a)She had previously acknowledged and welcomed Mr Snow’s intention to undertake an independent review of the Applicant’s total remuneration on her return to work. However, this was a totally distinct and separate process from that detailed in clause 12 of the Determination.
(b)The Determination provided for annual salary review, with the outcome being agreed. That implied some form of discussion and negotiation involved in the process. She considered Mr Snow had failed to do this.
(c)She had satisfied the criteria in sub-clause 12(1), her performance being rated satisfactory or better in her most recent performance review. The Applicant stated she had previously submitted a summary of productivity improvements she had developed and / or implemented over recent years which had not been considered by [previous] salary increases.
(d)She failed to see why her claim could not be considered now, as a separate and distinct issue.
(e)She had appointed Ian Kaye to assist / represent her and nominated the Fair Work Commission to be the independent mediator for the dispute.
3.36 On 2 October 2015 Mr Snow emailed the Applicant to confirm receipt of her letter dated 29 September 2015 which advised of a dispute in relation to section 28 of the Applicant’s employment contract with the NCA (T19B, pp273 – 274). Mr Snow set out the reasons for his view that the Applicant was not entitled to a salary increase, including that she had not been at work, and accordingly not received an end of year performance rating for the 2014-2015 year. Mr Snow also outlined his decision to bring forward a work value assessment of the Applicant’s substantive position.
3.37 On 4 October 2015 the Applicant confirmed her availability to discuss (along with her representative Ian Kaye) the issues with Mr Snow to ‘facilitate the process’ (T19B, p273). Further emails were exchanged setting a time for discussion (T19B, pp272 – 273).
3.38 On 6 October Mr Snow asked the Applicant for a list of topics she wanted to discuss, and informed her that Tania Martin, Director Corporate would sit in on the call (T19[B], p271 [-272]). The Applicant responded that she wished to discuss:
(a) Her dispute notification.
(b) Classification review.
(c) Interaction between the two (T19B, p271).
3.39 On 8 October 2015 Mr Snow participated in a teleconference with the Applicant, and her representative Ian Kaye. A file note of the conversation was taken by Tania Martin, Director Corporate (T19B, pp267 – 270). Topics included:
(a) The Applicant’s perception that she was being ‘squeezed out’ of the Agency[.]
(b) The Applicant’s belief that she was entitled to a performance review, and Mr Snow’s belief that she was not.
(c) Whether a classification review should be undertaken, and what the outcome of such a review might be.
It was agreed a further telephone conference would be convened, and Mr Snow would take advice.
3.40 On 13 October 2015 at 3:19pm the Applicant emailed Mr Snow to propose an agenda for a telephone hook-up, scheduled for 9:30am on 14 October 2015 (T19B, p265 - 266). The Applicant outlined the agenda items as:
(a) Response to your offer, that being:
(i)I will participate in the review
(ii)If the outcome is an upgrade, the new rate applies from 1/9/2015 and the salary review is dropped
(iii)If the outcome is a downgrade then I am given a proper redundancy package and will leave
(iv)If the outcome is stay as is, I will pursue the pay claim I have put forward through discussion / negotiation with you.
(b) NCA’s proposed alternatives.
3.41 Mr Snow replied to the above email at 5:35pm on 13 October 2015 (T19B, p265). Mr Snow sought to clarify whether the ‘offer’ the Applicant referred to was Mr Snow’s offer to bring forward a classification review of the Applicant’s substantive position. He further stated:
(a) The three outcomes referred to in the Applicant’s email were outcomes listed by the Applicant’s representative in a teleconference last Friday, and he did not agree to those consequences.
(b) He did agree to investigate options should the outcome be a downgrade.
(c) He would be happy to discuss all possible options with the Applicant. However, there is no expectation of a position redundancy – that is very unlikely to be an outcome, even if the position is reclassified.
(d) He was very much looking forward to the Applicant’s return to work. There were significant projects which required the Applicant’s direction. The position was not excess to the NCA’s current and foreseeable needs.
(e) There would be a full handover on the Applicant’s return.
(f) The key issue is that the Applicant was seeking a 10% payrise in circumstances in which her current Determination did not provide for a salary increase. It has been agreed at the teleconference that the Applicant and NCA were in dispute about this, and the Applicant was entitled to pursue the dispute resolution process set out in clause 28 of the Determination if she wished.
3.42 On 13 October 2015 at 9:43pm the Applicant emailed Mr Snow to advise that, as a ‘compromise’ the Applicant put forward in a phone discussion in the previous week had not been accepted, she saw ‘little point’ in continuing discussions. The Applicant advised she would notify the Fair Work Commission of a dispute (T15, p200).
3.43 On 12 October 2015 the Applicant requested assistance to confirm her return to full time work, to assist with refinancing (T19B, p254).
3.44 On 15 October 2015 Mr Snow emailed the Applicant to outline his view that the Applicant did not qualify for a pay rise, pursuant to the provisions of the Determination, as the Applicant had not been at work and had not participated in the performance appraisal process (T19B, p263). Mr Snow also confirmed:
(a) He was planning for the Applicant’s return to work, with a number of exciting projects for her to undertake and a full workload.
(b) He did not agree that his actions could be construed as not supporting the Applicant’s leave.
3.45 On 20 October 2015 Mr Snow issued a letter requesting the Applicant confirm her intention to return to work on Monday 7 December 2015 (T19B, p256).
3.46 On 21 October 2015 the Applicant confirmed via letter that she would recommence her duties on Monday 7 December 2015 (T19B, p255).
3.47 At the Applicant’s request, the letters of 20 and 21 October 2015 were forwarded to the Applicant’s financial advisor (T19B, p253).
3.48 On 23 October 2015 the Applicant emailed Mr Snow to outline her view that his actions had been unsupportive (T19B, pp251 – 252). Amongst other issues, the Applicant’s email referenced the issuing of a Determination affecting the Applicant’s employment conditions, the initial refusal to engage with the Applicant’s bargaining representative, and disregarding the Applicant’s arguments in support of a pay increase.
3.49 In January 2016 the Applicant filed an Application in the Fair Work Commission seeking resolution of a dispute in relation to calculation of her motor vehicle allowance (T19D).
…
3.58Dr Wasim Shaikh, Consultant Psychiatrist, reported to the Respondent on 21 July 2016 (T16). Dr Shaikh reported there is reasonable evidence to suggest the presence of an Adjustment Disorder with Mixed and Depressed Mood causally and consequentially related to her stressors whist employed by NCA and via actions of the chief executive.
Dr Shaikh reported the first clinically significant presence of symptoms occurred in December 2015. Dr Shaikh reported the Applicant’s symptoms are ‘unlikely to have presented in the absence of her perceived stressors.’
The history of stressors / symptoms reported by Dr Shaikh refers to the Applicant’s realisation that her entitlements had been reduced in a new employment agreement, followed by a further sequence of events in which the Applicant perceived the Chief Executive was trying to take away her entitlements, leading to involvement of the Fair Work Commission. The Applicant reported that her symptoms worsened when scheduled meetings were cancelled by the Chief Executive, and experiencing further issues with her pay.
Legislative Framework
The SRC Act establishes a scheme for the provision of rehabilitation and workers’ compensation for work-related injuries. Under s 14(1), the respondent is liable to pay compensation in respect of an injury suffered by an employee if that injury results in death, incapacity for work, or impairment. Under s 5(1), compensation is available to employees of Commonwealth authorities and licensed corporations. "Injury" is defined in section 5A(1) of the SRC Act to mean:
(a)a disease suffered by an employee; or
(b)an injury (other than a disease) suffered by an employee, that is 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), that is an aggravation that arose out of, or in the course of, that employment; 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.
Section 5A(2) provides guidance on the meaning of reasonable administrative action:
(2) For 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.
This exclusionary provision has been interpreted by the courts on a number of occasions; the relevant case law is set out in my decision RSBQ v Comcare(Compensation).[2] In Comcare v Martin,[3] the High Court held that the causal connection leading to the exclusion from definite injury is made out if the disease suffered is a mental condition or aggravation of a mental condition brought on by a failure to obtain promotion, including a reaction to a perceived consequence of a failure to obtain promotion. Writing of the exclusionary provision, their Honours stated that:
The purpose was described in the explanatory memorandum to the Bill for the Amending Act as being to "ensure that the wide range of legitimate human resource management actions, when undertaken in a reasonable manner, do not give rise to eligibility for workers' compensation" and as including, in particular, to prevent claims "being used to obstruct legitimate management action by excluding claims where an injury (usually a psychological injury) has arisen as a result of" such action [Australia, House of Representatives, Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006, Explanatory Memorandum, pp iv, v]. The taking of administrative action in respect of an employee's employment was in that way sought to be insulated from need for concern about the psychological effect of the decision on the employee. This purpose would be defeated if the operation of the exclusion were dependent upon the subjective psychological drivers of the employee's reaction.
Having regard to the text and structure of ss 5A and 5B, and consistently with the statutory purpose of the exclusion in s 5A(1), what is required to meet the causal connection connoted by the exclusionary phrase in s 5A(1) in its application to a disease within s 5A(1)(a) is therefore that the employee would not have suffered that disease, as defined by s 5B(1), if the administrative action had not been taken. That is to say, the causal connection is met if, without the taking of the administrative action, the employee would not have suffered the ailment or aggravation that was contributed to, to a significant degree, by the employee's employment.
The causal connection giving rise to the exclusion from the definition of injury is met where the disease suffered by the employee is a mental condition or an aggravation of a mental condition suffered by the employee in reaction to a failure to obtain promotion, including in reaction to a perceived consequence of that failure to obtain promotion. The nature of the perceived consequence – whether personal or professional, direct or indirect, real or imagined – is beside the point.[4]
[2] [2017] AATA 1965.
[3] [2016] HCA 43; 258 CLR 467 (‘Martin’).
[4] Ibid [46] – [48].
The Federal Court in Comcare v Martinez (No 2),[5] approved the findings of the South Australian Supreme Court in Keen v Workers Rehabilitation and Compensation Corporation.[6] Justice Robertson in Martinez approved the reasoning of Lander J in Keen where his Honour had opined:
Whether the administrative action was taken in a reasonable manner by the employer will depend upon the administrative action, the facts and circumstances giving rise to the requirement for the administrative action, the way in which the administrative action impacts upon the worker and the circumstances in which the administrative action was implemented and any other matters relevant to determining whether the administration [sic] action was taken in a reasonable manner by the employer.[7]
[5] [2013] FCA 439; (2013) 212 FCR 272 (‘Martinez’).
[6] (1998) 71 SASR 42 (‘Keen’).
[7] Ibid, quoted in Martinez [2013] FCA 439; (2013) 212 FCR 272, [83].
In Martinez, Robertson J stated that:
…the word "reasonable" allows the possibility that there may be more than one way of doing things "reasonably", and the judgment required is not whether the thing could have been done more reasonably.[8]
[8] [2013] FCA 439; (2013) 212 FCR 272, [82].
This decision drew on the reasoning of French J, as he then was, in the Full Federal Court matter of Bropho v Human Rights and Equal Opportunity Commission.[9] Although French J was interpreting the concept of reasonableness in the context of the Racial Discrimination Act 1975 (Cth), his Honour's remarks have application in the present matter. French J wrote:
There are elements of rationality and proportionality in the relevant definitions of reasonably … it does allow the possibility that there may be more than one way of doing things 'reasonably'. The judgment required … is whether the thing done was done 'reasonably' not whether it could have been done more reasonably or in a different way more acceptable to the court.[10]
[9] (2004) FCAFC 16; 135 FCR 105.
[10] Ibid [79].
I note that this reflects submissions made by counsel for the respondent, who indicated, in effect, that just because things could have been done in a better way or another way did not necessarily mean it was not reasonable administrative action for the purposes of the exclusionary provisions. In Re Georges v Telstra Corporation [2009] AATA 731,[11] the Tribunal considered the meaning of reasonable manner:
…while the assessment of "in a reasonable manner" relates to the administrative action contemplated and does involve the possible consideration of a variety of circumstances, the underlying assessment standard must remain an objective assessment of all the material that has been collated or should have been collated. I would also recognise that particular administrative action as pertaining to an individual employee are usually taken in accordance with a corporate policy framework and administrative instructions – frameworks and instructions that have been created as a consequence of consultation with staff and others, and often as such provide the context within and the context of a particular administrative action is taken.[12]
[11] [2009] AATA 731.
[12] Ibid [23].
I note that although the applicant submits there are four claims, I consider this to be a single matter with four parts. The respondent submits that, if the exclusionary provisions of s 5 exclude any of the four parts, the applicant's claim must fail. The applicant contends that success in any of the four parts will be sufficient. I note that that position of the respondent may have been modified in relation to the discussion we had at hearing about the interaction between Hart and Martin.
In my view, I should first determine which, if any, of the four matters are made out, and then assess what contribution, if any, they made to the applicant's agreed condition. I must also bear in mind that the principles established by the Full Federal Court in Hart - as modified, although not explicitly, by Martin - would apply. In Hart, the Full Court in effect held that, where there are multiple causative factors, if any one of those factors cause an injury not falling within the definition of "disease," the injury is not compensable. So, if there are many discrete causes that arose in the course of employment, and any one of those causes is excluded, then the entire injury will not be compensable.[13]
[13] Hart v Comcare [2005] FCAFC 16; 145 FCR 29.
However, there are two matters arising from this. Firstly, I do not consider Hart to be authority for the proposition that insignificant excluded causative factors would be sufficient to render the entire injury non-compensable, especially after the High Court decision in Martin. While Martin could be read as going further, and in effect applying a "but for" test, I note the following extracts:
Resolving the issue of principle
Causation in a legal context is always purposive [16]. The application of a causal term in a statutory provision is always to be determined by reference to the statutory text construed and applied in its statutory context in a manner which best effects its statutory purpose [17]. It has been said more than once in this Court that it is doubtful whether there is any "common sense" approach to causation which can provide a useful, still less universal, legal norm [18]. Nevertheless, the majority in the Full Court construed the phrase "as a result of" in s 5A(1) as importing a "common sense" notion of causation. That construction, with respect, did not adequately interrogate the statutory text, context and purpose.[14]
When the exclusionary phrase is so read, it becomes apparent that an employee has suffered a disease "as a result of" administrative action if the administrative action is a cause in fact of the disease which the employee has suffered. The administrative action need not be the sole cause. There may be multiple causes, some of which might even be related to other aspects of the employee's employment. What is necessary is that the taking of the administrative action is an event without which the employee's ailment or aggravation would not have been a disease: it would not have been contributed to, to a significant degree, by the employee's employment.[15]
[14] [42].
[15] [45].
Matter 1: employment contract of 30 April 2015
The relevant facts are set out in paragraphs 3.14 to 3.29 of the respondent’s statement of facts, issues and contentions, as adopted in [7] above. The applicant conceded that the making of an employment contract on 30 April 2015 was reasonable administrative action. Her main complaints in relation to this process were that Mr Snow did not point out detrimental changes to the contract, and that the covering email stated that she was required to sign and accept the document in its entirety, when all she was required to do to gain additional superannuation payment was to sign only in relation to that aspect. The applicant also complained that Mr Snow was not prepared to negotiate the terms of the contract, although he finally did after he accepted Mr Kaye as her agent.
Although I consider Mr Snow could have handled this aspect better, I do not consider that these actions amounted to unreasonable administrative action. I note, however, the applicant’s evidence about how she felt as at 24 June 2015:
I was very pleased that the issues had been sorted out, but still felt uneasy about the relationship because I felt I had been treated in an unfair and disrespectful manner. I don't think it was ever going to do anything for our relationship. It's going to be difficult working with him again.
In light of this evidence, I consider that any effect this first matter may have had on the applicant’s ultimate injury was not overly significant, and I do not consider this first matter to be relevant if I wish to apply the unmodified Hart test.
Matter 4: motor vehicle allowance
At this stage I will move on to the fourth matter, which I consider can be dispensed with reasonably briefly. The applicant was not aware that she only had been paid half the motor vehicle allowance until after December 2015, by which time her injury had been diagnosed. I note that she first received a certificate for sick leave on 2 December 2015.[16]
[16] T5D, p. 84.
It is not appropriate to consider matters occurring after December 2015 in relation to the injury under review. However, I note that I consider the inappropriate payments to be a result of an oversight, and not a deliberate act on the part of Mr Snow or his staff. Accordingly, I do not consider it was unreasonable administrative action, or that it was carried out in an unreasonable manner.
Matter 2: employment contact of 28 August 2015
The facts of this matter are set out from paragraphs 3.31 to 3.49 of the respondent’s statement of facts, issues and contentions, as adopted at [7] above. The applicant contends that the action of Mr Snow in relation to the discussions surrounding clause 12 of the determination contract was not reasonable administrative action, and it was not carried out in a reasonable manner. I note that Mr Snow consistently refused to entertain any discussions about the applicant's salary until she returned to the workplace.[17] It was Mr Snow’s view, pursuant to advice from a senior HR person who was in consultation with the Office of the Solicitor General, that the applicant was not entitled to a performance assessment or salary review, because she had not been in the workplace for a minimum of six months during the relevant review period.[18]
[17] T15, pp. 187–188; T19B, pp. 275–76; 278; 310
[18] T19B, pp. 231–32; 273.
I find that this view was incorrect, noting that no evidence was provided to substantiate it, and Mr Snow effectively conceded that it appears he was mistaken.
I do not find any malice in the approach taken by Mr Snow, but in view of the legal entitlements set out in the contract, I find that it was not reasonable administrative action to refuse the applicant's request, nor do I consider his blank refusal, without providing a proper basis to be carrying out such actions, to be carried out in a reasonable manner. If he had provided the reason behind the decision to the applicant or her agent, they may have been able to demonstrate the error in his approach, and the matter would not have dragged on from August 2015, to the Fair Work Commission on 27 November 2015, and then to a proposed but later cancelled a meeting on 3 December 2015. I find that the applicant was entitled to have a salary review as a distinct process separate from a classification review, and that she was not afforded such a review prior to her injury.
I also find that it was unreasonable for Mr Snow to have flatly refused to entertain such a process without providing appropriate reasons
Following the meeting of June 9 2015, the Chief Executive sent the applicant an email dated 15 June 2015.[19]
[19] T19B, pp. 289–91.
This email stated that the applicant had agreed to changes to clause 12 (relating to salary increase) and clause 13 (relating to the motor vehicle allowance) of her employment contract.[20] These changes were included in a subsequent remade employment contract on 24 June 2015.[21] However, the evidence shows that on 28 August 2015 the Chief Executive sent the applicant an email indicating that he would not be entering into discussions about the applicant's salary until she returned to work, when he would undertake a classification review of her position.[22]
[20] T19B, pp. 289–91.
[21] T12.
[22] T19B, pp. 275–76,
I find the refusal to participate in a salary review was an unreasonable action, given that the Chief Executive had agreed only two months earlier to vary clause 12 to provide for such a review.[23] After the applicant notified Mr Snow that the parties were ‘in dispute in accordance with s 28 of Determination 2015/3’,[24] the Chief Executive altered his position by claiming that he was entitled not to participate in the salary review because the applicant did not have a performance rating and was therefore ineligible.[25] That matter was not raised as an issue at the meeting on 9 June 2015 or at any other time prior to notification of the dispute. In fact, the email of 28 August 2015 contained no such claim, and it indicates that the Chief Executive refused to participate in a salary review, preferring instead to undertake a classification review when the applicant returned to work. I note that there was nothing in the remade employment contract to provide for substituting a classification review for the salary review, and find this to be an unreasonable administrative action.
[23] T19B, pp. 289–91.
[24] T19B, p. 277.
[25] T19B, pp. 273–74.
I also note that a performance agreement existed at the time the applicant lodged her submission in relation to the salary review, and a series of emails show that the Chief Executive and the applicant had discussed it, and the applicant had made changes to it.[26] There seems to have been a claim that the performance agreement was never finalised,[27] or the Chief Executive did not know of its existence, but I note that the human resources officer of the National Capital Authority was able to locate it very shortly after the Fair Work Commission hearing on 27 November 2015.[28] Both parties signed off on that agreement without making any changes.[29] By failing to finalise the performance agreement and subsequently rate the applicant, the Chief Executive breached clause 26 of the applicant’s employment contract. I find that it was unreasonable for the Chief Executive not to accede to the applicant's request for the appropriate review, and that these actions were a very significant cause of the applicant’s injury, bearing in mind the history relayed to Dr Shaikh and his report dated claus21 July 2016.[30]
[26] Exhibit 2.
[27] T19B, pp. 231–32.
[28] Exhibit 2.
[29] Ibid.
[30] T16, pp. 203–14.
Matter 3: Fair Work Commission undertaking
The applicant alleges that Mr Snow breached an undertaking given to the Fair Work Commission. As indicated during the hearing, I am not in a position to determine where the truth lies as to the nature of the undertaking, as it appeared to me that both parties had genuine but differing beliefs about the precise terms. Accordingly, I'm not in a position to determine the nature of the administrative action, or whether or not it was carried out in a reasonable manner.
What I consider to be relevant in relation to this third matter is the fact that it was, as it turns out, the inevitable result of the delays created by Mr Snow's stonewalling. I consider the relevant damage in relation to the injury had occurred well before 2 December 2015 – when the applicant first received a certificate for sick leave – and 3 December 2015- the date of the cancelled meeting. I note, in particular, that the applicant’s GP had noted her as being stressed on 18 November 2015,[31] and as being anxious and stressed two months before that. I do not consider it unreasonable to cancel the meeting in view of the reasons given, but I do consider it unreasonable to have allowed the situation to linger and not give it a reasonable chance of being resolved prior to the applicant's return to work.
[31] T10, pp. 135; 138.
Conclusion
While the applicant contends that her injury arose as a result of four matters, I remain of the view that all four matters are part of a continuum, and it is artificial to attempt to divide that continuum into several parts. On the whole, I find that the administrative action carried out in relation to the contract was not reasonable, and not carried out in a reasonable manner, because of protracted delays caused by Mr Snow's flat refusal, without providing appropriate reasons, to negotiate in relation to clause 12 of the determination. As noted before, I do not regard his actions as malicious, nor do I regard his reason as overly relevant. What is relevant is an objective assessment of the reasonableness of the action, and the way in which it was carried out.
Accordingly, I set aside the reconsideration made on 8 September 2016 affirming the original determination made on 29 July 2016, and rule that the applicant is entitled to payment of compensation from 2 December 2015 until 15 May 2016.
| I certify that the preceding 33 (thirty-three) paragraphs are a true copy of the reasons for the decision herein of Deputy President Greg Melick AO RFD SC |
........................................................................
Associate
Dated: 8 February 2018
| Date(s) of hearing: | 12 and 13 December 2017 |
| Date final submissions received: | 13 December 2017 |
| Advocate for the Applicant: | Mr Ian Kaye |
| Counsel for the Respondent: | Mr Ben Dube |
| Solicitors for the Respondent: | Sparke Helmore |
Key Legal Topics
Areas of Law
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Employment Law
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Administrative Law
Legal Concepts
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Causation
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Procedural Fairness
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