In Georges and Telstra Corporation Limited  AATA 731, the Administrative Appeals Tribunal (AAT) found that a transfer of work location, which caused a loss of travel allowance, constituted 'reasonable administrative action' under section 5A(2) and therefore precluded the employee from obtaining compensation for his 'injury' under section 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act).
The claim before the AAT was for an 'anxiety and depression' condition that the employee alleged was caused by bullying and harassment at work. The employee denied that the condition was caused by a transfer of work location, from Sydney CBD to Regents Park, which included a resulting loss of travel benefits.
Telstra denied liability for the condition on the basis that it was at least partially caused by reasonable administrative action, including the failure to retain a benefit, and therefore fell within the exception to liability provided under section 5A of the SRC Act. By reviewable decision, the determination was affirmed on the basis that the employee's condition was contributed to, to a significant degree, by 'reasonable administrative action taken in a reasonable manner in respect of [his] employment'. Hart v Comcare  FCAFC 16; (2005) 145 FCR 29 (Hart) was cited in support of this finding.
The employee sought review of the decision in the AAT.
In determining this issue the following matters were to be considered by the AAT:
- Whether the employee in fact suffered from the claimed condition.
- Whether the claimed condition satisfied the definition of 'injury' within the meaning of sections 4(1) and 5A(1) of the SRC Act.
- Whether, having regard to section 5A(2) of the SRC Act, the claimed condition resulted from reasonable administrative action taken in a reasonable manner in respect of the employee's employment.
The AAT's decision
The AAT considered that the employee suffered from an adjustment disorder with features of both anxiety and depression. The AAT reasoned that there were two workrelated stressors which contributed to the employee's condition:
- The transfer to Regents Park – encompassing the loss of extra travel time (ETT) payments and consequent financial concerns.
- Unhappiness due to perceived unfair treatment.
The AAT categorised the condition as an 'ailment' which brought it within the definition of an injury for the purposes of section 5A of the SRC Act. The AAT then applied section 5A, in particular whether the injury, including a disease, was a result of 'reasonable administrative action' including a failure to obtain or retain a promotion, transfer or benefit in connection with his employment, as defined in section 5A(2) of the SRC Act.
The AAT then applied a subjective test to the question of whether the administrative action was taken in a reasonable manner. In doing so, the AAT stated that the particular circumstances of the employee (as they are known to the employer or could easily have been ascertained by simple enquiry) must be considered.
In relation to the first stressor – the transfer to Regents Park – the AAT concluded that this was reasonable administrative action conducted in a reasonable manner. Accordingly, this stressor was found to have fallen within the exception provided within section 5A(1) and (2) of the SRC Act.
In relation to the second stressor – the perceived unfairness at work – the AAT concluded that it was as a result of reasonable administrative action, but the manner in which it was applied was 'not necessarily reasonable'. Accordingly, this stressor did not fall within the exception to liability provided within section 5A(1) and (2) of the SRC Act.
The AAT applied Hart to conclude that the Applicant's adjustment disorder arose partly from a reasonable administrative action, involving both a transfer and a failure to retain a benefit, and that the condition was therefore not an 'injury' or 'disease' as defined in the SRC Act. Accordingly, Telstra was found not to be liable for the condition.
The decision is important as it applies Hart to the 13 April 2007 amendments to the SRC Act.
The definition of 'injury' under section 5A of the SRC Act excludes injuries suffered as a result of 'reasonable administrative action'. 'Reasonable administrative action' is obviously a broader category, and was enacted so as to encompass employer action that did not meet the relatively high 'disciplinary action' threshold that previously existed. In Lambert v Comcare  AATA 13, the AAT 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 give 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 AAT will continue to carefully scrutinise such action. In addition, 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 to the AAT in reaching a decision.
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