In Sydney Harbour Federation Trust and Comcare and Radford (Joined Party)  AATA 1087, the Administrative Appeals Tribunal found that: a verbal communication to a Commonwealth employee indicating that she was on probation; the implementation of a 'performance management scheme' for the employee; and the issuing of a formal warning letter to the employee, did not amount to 'disciplinary action' under section 4 of the Safety, Rehabilitation and Compensation Act 1988 (the Act) and therefore did not preclude the employee from obtaining compensation for her 'injury' under section 14 of the Act.
Mrs Radford worked as an executive assistant with the Sydney Harbour Federation Trust (the Trust) from 26 April 2002 until early January 2006. During this employment, Mrs Radford was offered a new position as the licensing officer for the Trust. After a few months and some reluctance on Mrs Radford's behalf, she accepted the position and commenced work in this new role on 9 January 2006. Mrs Radford stated to the Tribunal that she had no previous marketing qualifications, nor did she receive training for her new position.
As part of her role, Mrs Radford was required to draft a 12 month work plan setting out objectives for her new position. Changes were made to this plan by a supervisor, which Mrs Radford felt were inappropriate due to the presence of outstanding tasks, the nature of the work and her inexperience with the position.
On 1 May 2006, Mrs Radford was instructed by a supervisor that she was 'on probation' for her failure to maintain her work plan commitments. In addition to this, Mrs Radford's performance assessment for 2005/2006 concluded that she was not performing her role well. Mrs Radford requested a review of her assessment, as available to her under the terms and conditions of her employment.
A performance improvement plan was developed for Mrs Radford. A number of meetings were conducted to develop this plan, and Mrs Radford contributed to these meetings. The completed plan was presented to her on 27 September 2006. In addition to the plan, Mrs Radford received a formal warning letter. The letter stated that her performance expectations were not being met and that should they continue to be unfulfilled by the end of the time prescribed by the performance improvement plan, appropriate disciplinary action would be considered.
On 27 September 2006, Dr Tringali certified that Mrs Radford was suffering anxiety and depression as a result of workplace harassment. Mrs Radford claimed compensation from her employer.
Section 14(1) of the Act states that:
'Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment.'
Section 4(1) of the Act, as it then was, defined 'injury' and also provided an exception to this definition. The exception stated that injury:
'Does not include any such disease, injury or aggravation suffered by an employee as a result of reasonable disciplinary action taken against the employee....'
The exception to the definition of 'injury' under the Act is now contained in subsection 5A, and the words 'reasonable disciplinary action' have been replaced with the words 'reasonable administrative action'.
The Tribunal's Decision
The Tribunal found that the conduct up to 26 September 2006, including the presentation of the performance improvement plan and the formal warning letter, did not amount to 'disciplinary action' under section 4 of the Act. The Tribunal noted that the conduct prescribed in the regulatory framework sought to support and assist employees of the Trust rather than to discipline them. The Tribunal recognised the fine nature of this distinction.
The decisions of Peter Carson v Comcare  AATA 644 and Re Quarry v Comcare (1997) 47 ALD 123 assisted the Tribunal in establishing a distinction between pre-disciplinary actions and 'disciplinary action'. Pre-disciplinary actions may involve an assessment of whether an employee is achieving his or her objectives. They may also refer to assisting and supporting an employee to achieve his or her objectives. The Tribunal was able to classify the conduct as pre-disciplinary action, as the actions take by the Trust were aimed at assisting Mrs Radford to perform her work effectively.
In the absence of 'disciplinary action', the anxiety and depression suffered by Mrs Radford due to her employment at the Trust entitled her to compensation under section 14 of the Act.
Where a regulatory framework exists to assist and support employees in performing their work effectively, and conduct by the employer is carried out within such a framework, it appears that such conduct will, at least initially, not be characterised as 'disciplinary action'. The level of performance of an employee is irrelevant to this characterisation. It is only when a determination to issue sanctions against that employee is made, and steps have been taken towards executing this determination, that conduct will constitute 'disciplinary action'.
However, the definition of 'injury' under the new section 5A of the Act, which commenced on 13 April 2007 excludes injuries suffered as a result of 'reasonable administrative action'. This is obviously a broader category, and was enacted so as to encompass employer action that did not meet the relatively high 'disciplinary action' threshold. In the recent decision of Lambert v Comcare  AATA 13, the Tribunal specifically noted the potential of the legislative amendment to reduce the significance of the difficult distinction between disciplinary conduct and wider managerial conduct.
However, while this amendment will certainly given employers greater comfort in managing the performance of employees, without the risk that that action will give rise to a compensable injury, it is likely that the Tribunal will continue to scrutinise such action carefully, and that rather than focussing on whether a given action amounts to 'disciplinary action' or 'administrative action', it will be the reasonableness of the action taken by the employer that will become of paramount importance.
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