Affirming the threshold of reasonable administrative action

Date: December 10, 2024

NJCX (Compensation) [2024] AATA 6640

Key Points:

The Tribunal was asked to review the claim for a psychological injury sustained during a employment probation period.

The Tribunal reviewed the claim under the Safety Rehabilitation and Compensation Act 1988 (SRC Act) and the key questions were:

• Whether NJCX’s (the applicant) employment significantly contributed to her psychological condition, under section 5B of the SRC Act;
• whether the injury was excluded from compensation because it arose from reasonable administrative action section 5A of the SRC Act; or
• whether the injury was excluded from compensation because it arose from wilful and false representation under section 7(7) the SRC Act.

Background:

The applicant was employed by Australian Rail Track Corporation (ARTC) in a senior management role. During her employment, the applicant alleged workplace harassment, bullying, and unfair treatment, particularly in their interactions with a colleague and their superior. The applicant’s employment was terminated during the probationary period as their performance was deemed unsatisfactory.

The applicant lodged a claim for compensation for psychological injury, including persistent depressive disorder and alcohol use disorder, asserting that the injury resulted from workplace stressors and the manner of her termination. Comcare rejected the claim, leading to an appeal at the Administrative Appeals Tribunal (AAT).

The Law:

Section 5A(1) of the SRC Act provides as follows:

“injury” means:

1. a disease suffered by an employee; or
2. 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
3. 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.

Section 5A(2) provides a non-exhaustive list of actions that are considered to be reasonable administrative actions.

The authority of Commonwealth Bank of Australia v Reeve (2012) 199 FCR 463 provides that in order for an action to be considered administrative, it must:

1. be taken in respect of the employee’s employment;
2. be directed specifically at the employee and not taken in respect of a class of employees; and
3. not merely affect an ordinary feature of the employee’s work, workplace or environment.

Comcare v Martin (2016) 258 CLR 67 provides that the administrative action must be an event without which the applicant’s condition would not have been a disease.

Conclusion:

The Tribunal found that the applicant had a history of mental health issues before joining ARTC, and the evidence did not support a worsening of the condition due to her employment. The Tribunal found that while the applicant did suffer from psychological conditions, these were pre-existing and not significantly aggravated by her employment.

The applicant argued that the aggravation of her psychological conditions was because of unreasonable administrative action taken in the form of her termination.

The Tribunal also noted that administrative actions do not impose a ‘standard of perfection’ but rather that it be reasonable in the circumstances. The Tribunal found that it was reasonable for the termination of her employment to have been undertaken in a summary manner, following the approach of Commonwealth Bank of Australia v Reeve (2012) 199 FCR 463.

The Tribunal found that any employment contribution to the aggravation of the condition was excluded based on reasonable administrative action. The Tribunal followed the approach in Comcare v Martin (2016) 258 CLR 67, that if not for the termination of the Applicant’s employment, she would not have suffered the ailment or aggravation that was contributed to, to a significant degree, by her employment.

Given the Tribunal’s finding it was not required to consider whether the further exclusion under section 7(7) applied but did so for completeness.

The Tribunal held that the Applicant knew or ought to have known of her history of mental illness and symptoms and that withholding of information in order to improve her prospects of a claim for compensation, met the threshold of wilful and intentional false representation.

Accordingly, the Tribunal affirmed Comcare’s decision to deny the claim for compensation. The Tribunal ruled that the applicant’s psychological injury was not significantly contributed to by her employment and was excluded from compensation because it resulted from reasonable administrative action.

Lessons Learnt:

This decision confirms what the Tribunal will consider to be reasonable in relation to administrative actions, specifically that they need not be perfect.

The other interesting aspect of the decision is the Tribunal’s finding that the condition had been in existence prior to the administrative action occurring, but that the administrative action had aggravated that condition, and that the exclusion could still apply.

Download PDF here:  NJCX (Compensation) [2024] AATA 6640

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