Much of the material in this chapter has been compiled from excerpts of a paper written by Stan Coulter and updated by Kate Rayner and Joe White. Their contribution is gratefully acknowledged.
Stress related cases are usually treated as a claim for 'disease' due to the difficulty, in most cases, of identifying a single traumatic incident that results in 'injury' ('injury' includes mental injury). Legislative coverage for 'disease' is provided in the following circumstances:
(i)Compensation is payable in respect of an 'injury' suffered by an employee;
(ii)'Injury' includes 'disease' (subject to (iii) and (iv) below);
(iii)'Disease' includes either a new condition or the aggravation of an existing condition;
(iv)To be an 'injury' a 'disease' MUST have been contributed to in a material degree by the employment;
(v)Compensation is NOT payable if a 'disease' is:
(a)intentionally self-inflicted;
(b)caused by an employee's serious and wilful misconduct;
(c)the result of reasonable disciplinary action or failure to gain a promotion, transfer or benefit in connection with the employment; or
(d)the employee made a false representation connected with his/her employment that he/she did not suffer from the disease.
Some guidelines for application of the legislation
These notes are not intended to be exhaustive. The purpose of including a brief outline of legislative concepts is to highlight the context in which the Claims Manager must operate.
Material Contribution
'Material' is not used in the sense of 'substantial' or 'significant' but rather in its legal sense of 'pertinent' or 'likely to influence'.
When examining whether the employment has contributed to the onset or aggravation of disease consider the following:
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the concept that any contribution, however small, is sufficient, is wrong-a greater contribution is required;
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the employment must provide some external stimulus to cause or aggravate the disease; and
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the employment need not have any 'special, unusual or wrongful factor'.
Serious and Wilful Misconduct
To establish that an employee's misconduct was serious it is necessary to show that the degree of risk of injury was increased by the conduct. In addition, 'wilful' indicates that the misconduct was deliberate and not just an impulsive and thoughtless act. In other words, the employee knew that his/her actions would cause risk of injury and deliberately proceeded in spite of this.
The SRC Act 1988 provides that an employee who is under the influence of alcohol or drugs (other than prescription drugs used in accordance with the prescription) is guilty of serious and wilful misconduct.
Reasonable Disciplinary Action
Comcare Australia takes the common sense view of the meaning of the word 'reasonable'. Would the ordinary person consider the action to be reasonable?
There is currently much debate about the meaning of the phrase 'disciplinary action' as is applies to the SRC Act 1988.
Two viewpoints have emerged.
First, that disciplinary action covers all aspects of the system of rules for conduct of employees and the enforcement of those rules by any means. Thus, a rebuke by a supervisor directed toward an employee returning late from lunch could be considered to be 'disciplinary action' within the meaning of the Act.
However, a recent Federal Court decision that applied to an employee of the Australian Federal Police suggests that the definition may be narrower. The Federal Court took the view that 'disciplinary action' was the process that followed the making of a formal decision to institute disciplinary action under the Act relevant to the employees of that agency. Further, the investigative or 'informal' process leading up to the formal decision to begin disciplinary action did not constitute 'disciplinary action' for the purposes of the SRC Act 1988. If you apply this ruling to a situation involving someone employed under the Public Service Act, then it follows that any action instituted under Section 61 of that Act, or any other process related to that action, would qualify as disciplinary action providing the Manager has made a formal decision to take action of some kind, be it the laying of a formal charge, informal counselling or transfer, etc.
There has been no test case dealing with the latter view in relation to the Public Service Act and consequently Comcare Australia is in the process of debating the relative merits of each view in order to formulate interim policy. The Claims Services Manager in each State Office, the Quality Assurance Unit in the Business Centre and the Legal Services Section in the Corporate Centre can be of assistance with this difficult issue.
Benefit
Comcare Australia considers that a benefit in connection with the employment includes anything for which approval must be sought.
Other general principles
The 'egg-shell skull' Principle
An employer takes an employee as they find them. Once the decision is made to employ, an employer cannot deny liability to pay compensation on the basis that, because a pre-existing condition has been aggravated by the employment, they cannot be held responsible for the original condition. The employer is not responsible for the original condition -but they are responsible for the extent of any aggravation. The only exception is where the employee wilfully and falsely withheld information about the pre-existing condition.
Care should be taken in applying this principle to examine whether there has been a material impact on any pre-existing condition by the employment - that is, that the employment has played an active role in the onset or worsening of the condition - as opposed to the condition or symptoms of the condition simply presenting in the work environment.
'Floodgates' Argument
Employers often argue against a claim because “if this one gets in, there will be many more”. This type of argument, while understandable, is not one that can be considered when deciding liability issues. Each case must be considered on its merits.
No Fault
Employers are often reluctant to see liability admitted for stress related claims because an admission of liability suggests that the employer is at fault somehow. Although some claims may be the result of mismanagement this is not true for all cases. The Act is a piece of “no fault” legislation - there does not have to be any wrongdoing by the employer for a claim to succeed. Thus there is often little point in employers arguing at length that they did nothing wrong; such arguments will have little relevance to the liability decision.