Employer’s administrative action the cause of an employee’s psychological condition6 December 2016 | Employer's Liability
The High Court held that the deterioration of an employee's mental condition was suffered as a result of administrative action undertaken by her employer, and therefore may not constitute an "injury" for which the appellant, Comcare, was liable.
- The causal connection required to meet the exclusion from the Safety Rehabilitation and Compensation Act 1988 (Cth) of an injury suffered by an employee 'as a result of' reasonable administrative action.
Peta Martin, the respondent, was employed by the ABC in 2010 as the producer of a local morning radio program. Her supervisor was Bruce Mellett. The respondent and Mr Mellet did not have a good working relationship. The respondent thought that Mr Mellet bullied and harassed her. In 2011, the respondent was temporarily appointed to a higher position (the position), where she had a different supervisor. This position was later advertised for permanent appointment and the respondent applied for it to avoid having to go back to work under Mr Mellett’s supervision.
The selection panel for the position, which included Mr Mellett, decided not to appoint the respondent to the position. The respondent was informed of this by her supervisor and their conversation turned to her returning to her previous position under Mr Mellett’s supervision. The respondent broke down at hearing this, went home, and sought medical treatment the next day.
The respondent was diagnosed with an adjustment disorder rendering her unfit for work. Comcare refused the respondent’s claim for compensation and she appealed that decision to the Administrative Appeals Tribunal (the Tribunal).
The Decision at Trial
The Tribunal found that the respondent had suffered a disease within the meaning of s5B(1) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the Act) . The issue in dispute was whether the disease was excluded from the definition of injury in s5A(1), which does not include a disease “suffered as a result of reasonable administrative action taken in a reasonable manner in respect of the employee’s employment”.
The Tribunal was satisfied that one of the operative causes of the respondent’s condition was her failure to obtain the position and that her condition was ‘as a result’ of the administrative action. The Tribunal then proceeded to conclude that Mr Mellett’s participation in the decision making-process meant that the decision not to appoint the respondent to the position had not been taken in a reasonable manner. The exclusion accordingly had no application, despite the causal connection being met, and Comcare was liable to pay compensation to the respondent.
The Decision on Appeal
Comcare successfully appealed the Tribunal’s decision to the Federal Court. The respondent appealed and the Full Court agreed that the decision not to appoint the respondent to the position was taken in a reasonable manner. However, it also found that the respondent’s condition was not as a result of the reasonable administrative action and allowed her appeal.
The Issues on Appeal
Comcare appealed to the High Court. The only issue to be considered was whether the Tribunal was correct in law to conclude that the deterioration of the respondent’s mental condition was a disease that she suffered as a result of the decision, within the meaning of s5A(1).
The High Court Decision
The High Court held that within the statutory context, the exclusionary phrase ‘as a result of’ in s5A(1) is naturally read as referring to the test of causation spelt out in s5B(1). The definition of disease in s5B(1) means that, to have suffered a disease falling within s5A(1)(a), the employee must have suffered an ailment or aggravation that was contributed to, to a significant degree, by the employee’s employment. In excluding from the definition of an injury compensable under the Act a disease that is suffered by an employee ‘as a result of’ reasonable administrative action taken in a reasonable manner, s5A(1) is naturally read as referring to the contribution made to the suffering of the disease by an event in the course of the employee’s employment that answers the description of reasonable administrative action.
The High Court concluded that 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 the failure to obtain promotion.
The reasoning of the Tribunal was accordingly correct in law on the findings of fact that it made and the matter was to be remitted to the Tribunal to be heard and determined according to law.
Implications For You
The High Court’s decision serves to clarify the causal connection required to meet the exclusion from the Act of an injury suffered by an employee ‘as a result of’ reasonable administrative action. In a broader sense, the decision provides guidance as to the interpretation of a causal term in a statutory context.