National employers and the Commonwealth have been disappointed with the narrow interpretation the Administrative Appeals Tribunal (AAT) and the courts have been giving the 2007 amendments to the Safety Rehabilitation and Compensation Act 1988 (Cth) (Act). Those amendments were designed to curtail claims for work injuries suffered as a result of performance management and reviews, described as 'reasonable administrative action'. In this blog we look at some 2012 cases to assess the extent to which the amendments have increased an employer's protection against workers' compensation claims arising from the provision of feedback on an employee's performance.
In April 2007, significant amendments to the Act, which were intended to extend the exclusionary provisions for work injuries suffered as a result of 'reasonable administrative action', commenced. Since then, a number of decisions of the AAT and the Federal Court have clarified and, in some cases, confined what constitutes 'reasonable administrative action taken in a reasonable manner in respect of the employee's employment' under section 5A of the Act.
In Commonwealth Bank of Australia v Reeve  199 FCR 463 (Reeve), Gray J considered that general operational and management actions, even if they affect the employment of the employee, do not fall within section 5A of the Act. Rares and Tracey JJ also drew a distinction between action taken 'in respect of' an employee's employment, which was covered by the exclusionary provision, and action that is 'part and parcel' of an employee's employment, which was not. It was accepted that the purpose of section 5A was to comprehensively cover a wider range of legitimate administrative actions, and such actions were not limited to the examples given at section 5A(2) of the Act. However, teleconferences to discuss the performance of Mr Reeve and the bank branch at which he worked, and the use of customer surveys during those teleconferences, were not considered to be actions done in connection with appraisal of the employee's performance.
Adopting what was said in Reeve, the Full Court in Drenth v Comcare  FCAFC 86 (Drenth) found that an employer's decision not to allow the employee to return to work for medical reasons was 'quintessentially an action that is directed specifically to the employee' and 'a decision about the employment relationship itself', rather than being a feature of the employee's workplace environment or otherwise connected to the employee's employment, and therefore fell within section 5A of the Act. The court also found that it was irrelevant that the decision was not taken by the employer under the Public Service Act 1999 (Cth). The court also accepted that 'administrative action' referred to in section 5A(1) was not restricted by the non-exhaustive list of examples in section 5A(2) of the Act.
In Drenth, the Full Court also confirmed that any reasonable administrative action need not have contributed to the condition or aggravation of the condition to a significant degree in order for the exclusionary provision to operate. In keeping in line with the long-standing principle in Hart v Comcare  145 FCR 29, reasonable administrative action found to be an 'operative cause' of an employees' condition or aggravation would not be not compensable.
In National Australia Bank Limited v KRDV  FCA 543, the court rejected an argument that exchanges that took place between a manager and an employee during a staff planning meeting were administrative action. Applying Reeve, Cowdroy J looked at the meeting as a whole in finding that it was not held as an administrative action 'in respect of' the employee's employment. Further, even if those exchanges could be considered administrative action, the court considered that it was not action taken in a reasonable manner.
More recently, in Beasley and Comcare  AATA 411, the Tribunal did not accept that an employee's mid-year review was reasonable administrative action taken in respect of his employment. The Tribunal found that feedback given during the review based on survey results did not constitute appraisal or action in connection with the appraisal of the employee's performance because the survey was used to improve service delivery rather than to evaluate staff performance.
Most recently, in Dunkerley v Comcare  FCAFC 132, the Full Court rejected an employee's argument that action taken to shortlist her for a position, for which she was ultimately unsuccessful, was unlawful and therefore could not constitute reasonable administrative action. Contrary to the employee's contention, the Full Court found that no error has been made in finding that a departmental recruitment had been followed. The Full Court accepted that it was unnecessary to consider whether the policy was legally binding.
It would seem that the line between general administrative action that may affect an employee and administrative action taken 'in respect of' an employee's employment is very fine. To illustrate that point, feedback given to an employee during a formal performance appraisal process would be accepted as being in the nature of administrative action. However, if the same feedback was given to an employee during a staff meeting or even during a one-on-one meeting with that employee to discuss more general matters, it would not constitute reasonable administrative action. In short, while the 2007 amendments have expanded the range of excluded events to include the provision of performance feedback, they do not provide complete immunity for employers and the availability of the exclusion will ultimately depend upon the circumstances in which the feedback is provided to the employee.
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