Australia: Unreasonable Management Action Must Contribute To The Onset Of Psychological Injury

In the last edition of Enterprise, we reported on a recent decision of the Queensland Industrial Relations Commission (QIRC) in Glen Rowe and Q-Comp (WC/2008/76). That decision was overturned by the Queensland Industrial Court (Court) on 12 May 2009 in Q-Comp v Glen Rowe (C/2009/6). This article sets out the reasons why the decision was overturned and a take-home message for employers dealing with psychological injuries with a variety of identified stressors.


The employee had been employed by the employer for 22 years, 15 of those as the Sales Manager for a car sales dealership. The symptoms of the employee's Acute Aggravation of a Major Depressive Disorder commenced in March 2006. The employee had a pre-existing diagnosis of depression.

The employee resigned from his employment following an incident on 22 April 2008 and subsequently made a workers' compensation claim. The workers' compensation claim cited three main factors he believed to have contributed to his injury:

  • Events of 22 April 2008, during disciplinary meetings with two of the employee's staff members. The disciplinary meetings occurred because the General Manager held a compulsory meeting at 7.00am that morning and the two staff members did not attend for family commitments,
  • Replacement of older staff with less experienced staff, and
  • Pressures of working with unsuitable staff and failure by management to support him over the difficulties he was encountering.
    The employee's claim was rejected by WorkCover Queensland and, on application for review by the employee, Q-Comp. The employee appealed Q-Comp's decision to the QIRC.

QIRC decision

The QIRC found that two of the employee's stressors were not sufficient to support his claim for compensation, but agreed with a Psychiatrist's assessment of the events of 22 April 2008 as being the employee's final decompensation.1

The QIRC found that the disciplinary meetings on 22 April 2008 were "classic cases of how not to conduct a disciplinary meeting".

This was because:

  • the General Manager was aggressive during the meetings and the sales consultants responded to his aggression,
  • the sales consultants refused to sign the warning, and
  • the meetings were poorly handled and degenerated into slanging matches.

The QIRC found that the employee sat silently during the meetings and was "mortified" by what happened.

The QIRC considered the events of 22 April 2008 in the context described above and stated that it did "not accept that management actions constitute a blemish simply because they are limited in time and number. To so characterise them fails to consider their significance, difference and impact."

The QIRC confirmed that the employee's injury had its "genesis in reasonable management action". However, his final decompensation on 22 April 2008 did not involve reasonable management action taken in a reasonable way particularly given that the events were excessive and extraordinary. This was sufficient for the employee's claim to be accepted .


Q-Comp appealed the QIRC's decision to the Court. President Hall found that the QIRC's conclusion that the employee's injury had its genesis in reasonable management action meant that the employee's injury was one that was not compensable.

President Hall confirmed that the approach taken under the Workers' Compensation and Rehabilitation Act 2003 (Cth) was for the decision-maker to embark upon an enquiry as to whether the psychological or psychiatric injury arose out of or in the course of reasonable management action taken in a reasonable way.

President Hall found that the QIRC undertook that enquiry, with the outcome being adverse to the employee because the employee's injury had arisen out of reasonable management action taken in a reasonable way, even though the "final decompensation" was not reasonable management action taken in a reasonable way. In those circumstances, the employee's injury was not compensable.

Lessons for employers

President Hall's decision confirms the general principle that a workers' compensation claim for psychological or psychiatric injury with multiple identified stressors may be successful even where some (but not all) of the stressors arise out of or occur in the course of reasonable management action taken in a reasonable way.

However, the decision makes it clear that the stressors that constitute unreasonable management action taken in an unreasonable way must be related to the onset of the psychological or psychiatric injury.

Despite this recent appeal decision, our previous comments in the last edition of Enterprise still apply. One management action, if it is not reasonable and taken in a reasonable way, may be sufficient for an employee's workers' compensation claim to be accepted. Employers should ensure that all management action taken in relation to employees is measured against the requirements that it be reasonable and taken in a reasonable way.


1 The point at which a person's psychological system can no longer cope with stressors.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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