Australia: Workers' Compensation: Disciplinary action taken by employer determined to be "reasonable disciplinary action", thus disentitling the worker to compensation

Last Updated: 3 December 2009
Article by Helen Woods

Disciplinary action taken by employer determined to be "reasonable disciplinary action", thus disentitling the worker to compensation

Judgment date: 20 October 2009

Nina Quynhnga Bui v Australian Postal Corporation [2009] AATA 803

Administrative Appeals Tribunal – Melbourne Registry1

In Brief

  • The issue to be determined in these proceedings was whether the worker's psychological injury was caused by reasonable disciplinary action taken against the worker, thus disentitling the worker to compensation under the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act).
  • The AAT determined that the employer was acting within the guidelines of its discipline policy in arranging a counselling session with the worker and that its actions were reasonable. Accordingly, the worker was not entitled to receive compensation in respect of her psychological condition which the worker alleged arose as a result of the disciplinary process.


Nina Bui was employed as the manager of an Australian Postal Corporation (Australia Post) shop for a period of nine years. In 2005, Australia post raised a number of concerns about Ms Bui's practices and performance and in January 2006, conducted a counselling interview for alleged breaches of the Code of Ethics as part of its disciplinary process. Ms Bui ceased work in May 2006 on medical grounds and claimed compensation for depression, stress and anxiety arising from the process.

The liability of Australia Post to pay compensation was dependant upon there being an "injury". The term 'injury' was defined in section 4(1) of the SRC Act at the relevant time2 as follows:

"injury means:

(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 (emphasis added)."

Australia Post's disciplinary policy applied to breaches of the Code of Ethics and was part of the disciplinary provisions covered by the Australia Post Enterprise Agreement 2004. The discipline policy was initiated when an employee's behaviour and/or performance fell short of the standard required by the Code of Ethics or other employee contractual obligations. The discipline process consists of three different levels, namely, Informal Feedback, counselling (Formal Counselling and Warning Counselling) and Disciplinary Inquiry, which were applied depending on the seriousness of the apparent breach, the general circumstances and whether there was a pattern of behaviour.

On 9 January 2006, Ms Bui received a written notice to attend a Warning Counselling interview on 13 January 2006. The notice referred to alleged breaches of the Code of Ethics, in particular, an unauthorised self-reimbursement for spectacles (the glasses issue), alleged losses of books (the books issue) and alleged losses of stamp booklets (the stamps issue).

Ms Bui contended that the Warning Counselling interview was unjustified and that the conduct of the interview was unreasonable. Ms Bui denied the claims made against her in respect of the books issue and the glasses issue. As to the stamps issue, Ms Bui said that she should not be held responsible for everything that happened in the shop. Ms Bui conceded that in 2005, she had previously received requests for information from Australia Post regarding the books issue, but stated that the urgency of the matter had not been explained to her.

At the Warning Counselling interview, Ms Bui was advised that she would be allowed a further four weeks to obtain documents to substantiate her claims and that Australia Post would consider reducing the Warning Counselling to Formal Counselling. Ms Bui responded to the allegations against her, in addition to other issues that were brought up at the Warning Counselling interview, such as her competence in the role of manager. The documents provided failed to substantiate Ms Bui's claims, though Australia Post advised that the Warning Counselling would be reduced to Formal Counselling.

Australia Post gave evidence that the Warning Counselling had been recommended by the Human Resources Manager because the allegations included serious matters such as the books issue and stamps issue that involved a possible loss of revenue. Australia Post also noted that none of the documents presented by Ms Bui to substantiate her claim supported her position and further, that as an experienced manager, Ms Bui, should have been aware of the stamps issue and of the correct procedure for reimbursement of work-related items. Australia Post advised that the decision to downgrade the Warning Counselling was made because it was accepted there was some confusion about the instructions given to Ms Bui at the time.

The Decision

The AAT accepted the evidence of Australia Post and determined that Australia Post was acting within the guidelines of its discipline policy in arranging a counselling interview. The AAT found that Ms Bui had been asked to provide documents to support her version of events and that she had failed to do so. The AAT noted in particular, that the books issue and the stamps issue raised serious questions of a possible loss of revenue by Australia Post and that as the manager of the shop, Ms Bui was required to take responsibility.

In the circumstances, the AAT determined that in view of the seriousness of the concerns and informal discussions that had already occurred, that counselling as part of the discipline policy was appropriate. It was designed to address key aspects of Ms Bui's performance with a view to assisting her to make improvements and was not "irrational, absurd or ridiculous" (see Repatriation Commission v Webb (1987) 7 AAR 233 per Beaumont J at 237). Accordingly, the AAT held that the disciplinary action taken by Australia Post was reasonable disciplinary action. That being so, the AAT determined that the psychological condition suffered by Ms Bui was excluded from the definition of injury in section 4 of the SRC Act (as it was then) and consequently, that she was not entitled to compensation under section 14 of the SRC Act.


This case highlights the importance of implementing and following disciplinary procedures that provide sufficient notice to the worker, permit the worker time in which to respond to the allegations made against him or her, and that are appropriate in the circumstances. Failure to do so may result in an employer's disciplinary actions being considered unreasonable and the employer may subsequently be found liable to pay compensation if that unreasonable disciplinary action results in adverse health consequences to the worker concerned.

It is noted however that from 13 April 2007, the SRC Act was amended so that "reasonable disciplinary action" as defined in section 5A is now the relevant test.

1 G.D. Friedman, Senior Member

2 The term "injury" is currently defined in section 5A of the Safety, Rehabilitation and Compensation Act 1988 as a disease, injury or aggravation of a physical or mental injury (other than a disease), 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.

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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