consideration
44 As we have said, this appeal turns on the proper construction and application of the exclusion in s 5A(1) of the SRC Act.
45 It may be accepted that the task of statutory construction begins and ends with considering the text of the provision to be construed; and that the search for textual meaning may involve a consideration of the purpose and context of the provision: see Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) [2009] HCA 41; 239 CLR 27 at [47]; Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [69]; Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; 250 CLR 503 at [39]; Thiess v Collector of Customs [2014] HCA 12; 250 CLR 664 at [22]-[23]; North Australian Aboriginal Justice Agency Ltd v Northern Territory [2015] HCA 41; 256 CLR 569 at [11]; Military Rehabilitation and Compensation Commission v May [2016] HCA 19; 257 CLR 468 at [10]; and, most recently, Australian Securities and Investments Commission v Whitebox Trading Pty Ltd [2017] FCAFC 100; 251 FCR 448 at [25]-[26].
46 The disagreement in this case primarily concerned the words "suffered as a result of ... administrative action ... in respect of the employee's employment" in the exclusion in s 5A(1). As noted earlier, this form of exclusionary provision was introduced by the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2006 (Cth): see [21] above. Before then, the equivalent exclusion was expressed in different terms, although the substantive definition of "injury" (then in s 4 of the SRC Act) was the same. The legislative history, including the Explanatory Memorandum to the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006 (Cth) (Explanatory Memorandum), was considered in detail by the Full Court in CBA v Reeve at [6]-[9] (Gray J) and [70]-[74] (Rares and Tracey JJ). There is little to be gained from repeating their Honours' accounts.
47 It is clear enough that the legislative history is important for two reasons. First, the legislative history elucidates the purpose of s 5A. After examining the legislative history, Rares and Tracey JJ said, in CBA v Reeve at [73], that:
[T]he purpose of s 5A was to broaden the exclusion of matters from the previous definition of "injury" so that an employer would not be unduly inhibited in taking reasonable administrative action in respect of an employee's employment. The Parliament sought to ensure that an employer would be freer to deal with an employee, by taking disciplinary action or deciding to deal with that employee as an individual in respect of his or her employment, than had been the case under what it considered were narrow judicial interpretations of the old exclusion in s 4(1).
This indicates that the illustration given in argument by senior counsel for Mr Drinkwater may not withstand analysis: see [41] above.
48 Secondly, as indicated at [53] below, reference to the Explanatory Memorandum can assist to a limited extent in defining the scope of the term "administrative action" in the exclusion in s 5A(1).
49 Bearing in mind the careful consideration of the legislative history and the scope of s 5A in CBA v Reeve, we have found that that case and the subsequent case of Drenth v Comcare provide appropriate guidance to enable us to determine this appeal under s 44 of the AAT Act. We apply those decisions in concluding that the appeal should be allowed. It is to those two cases that we now turn.
50 A question arose in CBA v Reeve as to whether the Commonwealth Bank of Australia was liable to pay compensation under s 14(1) of the SRC Act in respect of Mr Reeve's depressive disorder. Mr Reeve had developed a depressive disorder while working as a manager of a branch of the Bank. The circumstances that contributed to Mr Reeve's condition included organisational and staffing changes, the humiliation of frequent telephone calls with colleagues in which he was required to report poor branch results, an unsupportive visit from his manager and the anxiety of reporting poor customer satisfaction survey results. It was not disputed that Mr Reeve's depressive illness was a "disease" as defined in s 5B and that, unless it was the result of administrative action within the exclusion in s 5A(1), it was an "injury" in respect of which the Bank was liable to pay compensation under s 14(1).
51 The Full Court held that the exclusion in s 5A(1) of the SRC Act applied to specific action taken in respect of an individual's employment, such as disciplinary action. The exclusion did not apply to action forming part of the everyday tasks and duties of that employment, and, in consequence, ordinary routine work, and changes to routine and directions to perform work, were not "reasonable administrative action taken in respect of the employee's employment": see CBA v Reeve at [33], [60]. The Full Court held that the events that contributed to Mr Reeve's condition were part of his ordinary work duties as an employee; the exclusion did not therefore apply; and he was not disentitled to compensation under the SRC Act: see CBA v Reeve at [34], [61], [64].
52 In construing the expression "administrative action", Gray J drew a distinction between "administrative action" and "operational action". Action was "operational", in his Honour's view, if it was action relating to "the activities or business of the institution or enterprise in which the employee is employed": see CBA v Reeve at [31] and, to similar effect, Rares and Tracey JJ at [52]. Gray J concluded (at [33]) that:
In the case of s 5A(1) of the SRC Act, the requisite effect is given if the provision is seen to apply to action taken in respect of the administration of the relationship of employer and employee as between the particular employee making the claim, in his or her capacity as employee, and the employer in its capacity as employer … As the Tribunal pointed out correctly, matters of general administration, management and the implementation of policy are excluded, even if they affect the employment of employees. It is what is done with respect to the employment relationship that the particular employee has with the employer that is excluded from the definition of "injury", unless the action taken was not reasonable, or was not reasonably taken.
53 In a similar fashion, Rares and Tracey JJ stated (at [74]) that:
[T]he Explanatory Memorandum did not suggest that "administrative action" was intended to cover the way in which the employee was to perform the employment itself or what were his or her duties or tasks in doing so. It is one thing to contemplate disciplining an employee or taking steps under his or her contract of employment, and quite another to define or delimit or supervise the employment, job or task entrusted to the employee for him or her to perform or to give directions to him or her as to how and when he or she is to perform it. The former is comprehended by the expression "administrative action" in s 5A(1); the latter deals with the way in which the employee carries out the employment for which he or she was engaged. The latter is not "administrative action".
54 Rares and Tracey JJ also emphasised the importance of the words "in respect of the employee's employment" in describing the administrative action within the exclusion, which they said "suggests that the action referred to in the exclusion was intended to refer to action directed specifically to the employee as opposed to it affecting him or her because it was an ordinary feature of his or her work, workplace or environment or otherwise connected to his or her employment": see CBA v Reeve at [57]. Their Honours said (at [60]) that:
The qualification in the final phase of the exclusion in s 5A(1) is important. It requires that the action be taken "in respect of the employee's employment". That qualification distinguishes the criterion of the exclusion in s 5A(1) from an action or circumstance that the Act uses to impose liability, namely an action or circumstance that arises out of, or in the course of, the employee's employment. This suggests that the Parliament intended that the exclusory action be specific administrative action directed to the person's employment itself, as opposed to action forming part of the everyday duties or tasks that the employee performed in his or her employment or job.
(Emphasis in original).
55 In the same paragraph, Rares and Tracey JJ went on to observe, in a passage relied on by both parties in this proceeding, that:
The action must be "in respect of" something that exists - the person's employment. That is, the action must be something different to the duties and incidents of that employment or, as s 5B(2)(b), provided "the nature of, and particular tasks involved in, the employment". Rather, the administrative action in the exclusion must take the employment as a factum and operate in respect of whatever its duties, incidents, nature and tasks may be. Thus, "employment", as used in s 5A, is concerned with the conditions in which the employee works, the terms of his or her engagement and his or her duties: cf John Holland Group Pty Ltd v Robertson (2010) 185 FCR 566 at [72]-[73] per Dowsett J, with whom Spender J agreed. ...
56 Their Honours added (at [69]) that:
The intention that we have discerned from the Parliament's use in s 5A(1) of "in respect of" is to provide a relational context for the administrative action taken and the employee's employment. It is to require that the action be specific to the employee's work or job so that the exclusion can operate harmoniously with the preceding portion of s 5A(1) rather than as eviscerative of it: see too Parker v President, Industrial Court of Queensland [2010] 1 Qd R 255 at [41], and see too [42], [44] per Keane JA with whom Fraser JA and White J agreed.
57 CBA v Reeve was applied without any lengthy discussion by the Full Court (Rares, McKerracher and Murphy JJ) in Drenth v Comcare.
58 Ms Drenth worked for the Australian Taxation Office (ATO), although she suffered from a psychiatric illness that she had had most of her life. In late November 2007 the ATO became aware that she was experiencing significant psychological stress and that she had been recently hospitalised following an overdose of medication. She started working reduced hours. A new return to work plan was prepared for her in January 2008. The ATO received medical advice, in a letter of 29 January 2008, that Ms Drenth was able to work 4 hours a day and that, if she was coping well, that could be increased to 5 hours a day.
59 About the same time, however, the ATO received contrary medical advice from a consulting psychiatrist, who had been engaged by the ATO. This psychiatrist produced a report dated 19 January 2008, which was received by the ATO on 29 January 2008, expressing the opinion that Ms Drenth was incapable of working 3.5 hours per day, 5 days a week. On 30 January 2008, the ATO wrote to Ms Drenth advising her that, as a consequence of receiving that opinion, it had decided that she was not to return to work as from 31 January 2008. Ms Drenth was very distressed and claimed compensation from the ATO for the aggravation of an existing disease suffered by her as a result of subsequent actions by the ATO. The Tribunal found that a number of the stressors or aggravating factors on which Ms Drenth relied had aggravated her existing. It also found that the decision made by the ATO on 30 January 2008 had had the same effect. The Tribunal made its decision before CBA v Reeve was delivered.
60 Before the Full Court, Comcare argued only that the decision of 30 January 2008 was an administrative action within the exclusion in s 5A(1) of the SRC Act. Ms Drenth submitted to the contrary that it was not administrative action because it did not amount to disciplinary, counselling or appraisal action or other forms of administrative action referred to in s 5A(2). She also contended that the decision did not concern the specific nature of her employment and that it was not a determination or action under the PS Act or regulations: see Drenth v Comcare at [20]. The Full Court dismissed Ms Drenth's submissions, noting, first, that, as CBA v Reeve had decided, the action referred to in the exclusion in s 5A(1) was not qualified by the non-exhaustive list of examples of "reasonable administrative action" in s 5A(2): see Drenth v Comcare at [21]. Their Honours held that, in the circumstances as found, "the 30 January decision was clearly administrative action within the meaning of s 5A ... because it was directed squarely towards, and taken in respect of, her employment": see Drenth v Comcare at [23]. At [22], the Full Court applied CBA v Reeve directly, stating:
[A] decision that an employer is not prepared to allow an employee to return to work because of a medical opinion that the employee is then not fit and to require the employee to provide further evidence that he or she is fit, is quintessentially an action that is directed specifically to the employee. Such a decision does not affect him or her because it is some feature of his or her workplace or environment or is otherwise connected to the employee's employment. Rather, it is a decision about the employment relationship itself. Here, the 30 January decision took Ms Drenth's employment as a factum and it operated in respect of whatever the duties, incidents, nature and tasks of her employment might have been: Reeve at [57]-[65], [74].
61 CBA v Reeve has been applied on other occasions, including by Tracey J in Peters v Comcare and Long v Comcare.
62 In Peters v Comcare, Tracey J dismissed an appeal under s 44 of the AAT Act on the basis that it raised no question of law. In the course of his Honour's reasons, however, it was noted that counsel for Ms Peters had emphasised the distinction between "administrative" action and "operational" decisions mentioned in CBA v Reeve. The events said to give rise to Ms Peters' injury "included the management of Ms Peters' return to work following her injury at home; a decision not to place her on the on-call roster and a refusal by her employer temporarily to transfer her to the World Trade Centre": see Peters v Comcare at [29]. Noting that the Tribunal was aware of the distinction to which Gray J had referred in CBA v Reeve, Tracey J concluded (at [31]) that "[t]he relevant events related to the administration of Ms Peters' employment as an employee and her relationship with her employer" and that this meant that the exclusion in s 5A(1) applied.
63 In Long v Comcare, Tracey J dismissed an appeal under s 44 of the AAT Act on the basis that it was open to the Tribunal to conclude in the circumstances of the case that the exclusion in s 5A(1) was engaged. Ms Long was an employee of Medicare Australia. In May 2009, she was subjected to a quality assurance procedure, involving random checks on the accuracy of her work. In June 2009, she suffered an injury at work in the nature of anxiety and depression. She left work and did not return due to her injury. She lodged a claim for compensation for psychiatric injury, which Comcare rejected. The Tribunal affirmed Comcare's decision, holding that Ms Long's injury was excluded from the definition of "injury" by reason of the exclusion in s 5A(1).
64 The issue before Tracey J was whether the imposition on Ms Long of the "informal 100% QA process" was "administrative action" within the meaning of s 5A of the SRC Act. Tracey J held that it was open to the Tribunal to conclude that "the QA process which applied to Ms Long, when looked at as a whole, constituted "administrative action" within the meaning of s 5A(1) whether read with s 5A(2)(a) or not" see Long v Comcare at [30]. The Tribunal had found that:
... Medicare applied two quality checking procedures: QA and QC. If random QC assessments over a period revealed an error rate below the acceptable level the employee "would be taken off the formal daily QC process and QA would be performed on all transactions until they had reached the standard required." It was such a regime which was applied to Ms Long in May 2009 and which was found to be a significant cause of the onset of her psychiatric condition. The Tribunal (at [34]) acknowledged that the distinction between operational and administrative actions could involve fine distinctions but it was persuaded that the "informal 100% QA process" had been "specifically designed for Ms Long and particular to her" and was, as a result, "administrative action". Although Medicare could have invoked the formal process which may have led to the creation of a performance improvement plan, it had not done so for compassionate reasons. The action was nonetheless administrative in nature. It found (at [35]) that the imposition of the QA process regime on Ms Long occurred in the course of the administration of her employment as an employee of Medicare and her relationship with her employer.
See Long v Comcare at [26].
65 Tracey J observed (at [24]) that both the separate reasons of Gray J and his own and Rares J's joint reasons in CBA v Reeve:
... established that "administrative action", within the meaning of s 5A, must be employee-specific. It must entail more than the regulation of the normal incidences of a person's employment. Such action may or may not involve the application or implementation of some particular policy. The "formality" or otherwise of a particular action on the part of the employer is not necessarily a determinative factor.
66 In upholding the Tribunal's decision, Tracey J contrasted the circumstances in which Mr Reeve suffered his injury with those affecting Ms Long. His Honour remarked (at [28]-[30]) that:
Unlike Ms Long, Mr Reeve developed a depressive illness in the course of performing his normal duties. He was required to attend meetings and participate in telephone conferences with other managerial employees. More senior managers visited his branch, as they did other branches from time to time. Mr Reeve's illness arose out of what took place in the course of these interactions which occurred in the course of his normal routine.
Ms Long, on the other hand, was identified, in the course of routine QC checks, to be performing at a sub optimal standard. At that point she was subject to the "informal 100% QA process". This meant that all of her work was checked and was to continue being checked until she met the required standard. ... Medicare could have, but did not, issue Ms Long with a formal notice that the quality of her work did not meet the required standard. ... The fact that Medicare chose to adopt a less formal remedial procedure, ... should not deflect attention from the critical question, namely, whether Medicare took action which was directed specifically to Ms Long. This it did. Under her contract of employment Ms Long was required to perform her duties at a particular standard. When she did not do so all her work was checked and feedback was provided to her in order to assist her to perform at the required level. ... It was this extraordinary, person-specific, regime which gave rise to the psychiatric impairment for which Ms Long sought compensation. ...
Part of the informal QA process involved an on-going appraisal of the quality of Ms Long's work: see s 5A(2)(a) of the Act and Reeve at [63]. There is no mutual exclusivity between the undertaking of an appraisal and its object - the protection of the integrity of the organ donor register. On the evidence it was open to the Tribunal to conclude, as it did, that the QA process which applied to Ms Long, when looked at as a whole, constituted "administrative action" within the meaning of s 5A(1) whether read with s 5A(2)(a) or not.
67 CBA v Reeve indicated that the boundary between administrative action and non-administrative action may on occasion be difficult to draw. As Drenth v Comcare, Long v Comcare and Peters v Comcare illustrate, however, this difficulty does not arise in every case. In our opinion, the difficulty does not arise here and it is unnecessary and inappropriate in this case to explore where the boundary might lie. Again, as the cases discussed above show, whether or not there is administrative action within the meaning of s 5A(1) of the SRC Act depends to a significant extent on the particular circumstances in which the action is taken.
68 The present case is not like CBA v Reeve, where the actions that led to Mr Reeve's illness were part of his ordinary work duties. In contrast to Mr Reeve, Mr Drinkwater's illness did not develop in response to performing his normal duties as a Customs Officer in the Client Services Work Area at Sydney Airport.
69 Contrary to the submissions for Mr Drinkwater, the present case is not properly characterised as a case about the duties Mr Drinkwater performed for his employer. These submissions involved a misreading of CBA v Reeve. When Rares and Tracey JJ referred to an employee's duties in CBA v Reeve at [74], they drew a distinction between disciplinary action or steps under an employee's employment contract on the one hand and, on the other hand, defining or supervising the employee's job or directing him or her how to perform it. The latter action was not, as their Honours said, administrative action within the exclusion in s 5A(1). Rather, this kind of action fell within what Gray J referred to as "operational" action. The present case is not about Departmental directions as to how Mr Drinkwater was to do his job in his then position or about his duties in that job; and it did not, for this reason, involve operational action falling outside the exclusion.
70 In the present case, the relevant action was about transferring Mr Drinkwater to a different post or position from that which he then held in his employer's employ: see Tribunal's reasons at [36]. This was administrative action taken with respect to Mr Drinkwater under s 25 of the PS Act: see further Director-General of Education v Suttling (1987) 162 CLR 427 at 437-438 (Brennan J, with whom Mason ACJ and Deane J agreed). It was action that took Mr Drinkwater's employment "as a factum", to use the language of Rares and Tracey JJ in CBA v Reeve at [60]. Although discussing a different provision of the SRC Act, Dowsett J, with whom Spender J agreed, reasoned in a similar way in John Holland Group Pty Ltd v Robertson [2010] FCAFC 88; 185 FCR 566 at [72]-[73]. This action was plainly taken "in respect of" Mr Drinkwater's employment because it was action directed specifically to his employment and taken in respect of his employment. A determination by the employer that the employee will move from his or her existing post to a new post in the employer's employ involves administrative action specifically directed to that employee and specifically about that employee.
71 In the present case, the fact that this administrative action was "in respect of" Mr Drinkwater's employment was highlighted by the decision-making processes leading up to it: see [2017] AATA 1228 at [12]-[20], [22]-[27]. The fact that these processes were pursued because they were a part of the mobility policy does not alter the fact that they were expressly designed to enable consideration to be given to Mr Drinkwater's personal circumstances and his personal preferences concerning his work areas. Mr Drinkwater did not contend to the contrary.
72 A major difficulty with the argument advanced for Mr Drinkwater was that it failed to take account of the fact that the factual matrix described by the Tribunal disclosed more than one administrative action. When the Department determined to reinstate the mobility policy in 2013, it made an administrative decision about the implementation of the mobility policy. This decision did not constitute administrative action within the exclusion in s 5A(1), including because it was not action "in respect of" any particular employee's employment. This was not, however, the administrative action that was relevant to Mr Drinkwater's compensation claim. As we have seen, Mr Drinkwater's case was that his disorder developed in response to the action to transfer him from his post at Sydney Airport to a different post in the Customs House. The action to transfer him from his existing post to a new post was therefore the administrative action relevant to his claim for compensation: see [2017] AATA 1228 at [21], [26], [28]-[29] and [36]. The earlier Departmental decision to implement the mobility policy was not the relevant action because it did not give rise to the disorder for which he sought compensation.
73 Furthermore, the fact that the decision to transfer Mr Drinkwater from his post at Sydney Airport to a different one in the Customs House would not have been made but for the Department's decision to implement the mobility policy does not alter the fact that the administrative action to transfer him was made in respect of his employment. In the context of employment governed by the PS Act, it will frequently be the case that administrative action taken in respect of a particular employee's employment will be taken under, or in furtherance of, a policy that the employer has determined is applicable to all or some of the employees in its employ.
74 In our opinion, the Tribunal erred in its construction and application of the exclusion in s 5A(1) of the SRC Act and in particular the phrase "in respect of the employee's employment", because it misunderstood what was said by the Full Court in CBA v Reeve. Contrary to the Tribunal's understanding, CBA v Reeve did not decide that an action was not "administrative action" within the meaning of the exclusion simply because it was taken in implementation of, or in conformity with, an applicable policy.
75 For the reasons stated, we conclude that the exclusion in s 5A(1) was clearly engaged in Mr Drinkwater's case. It must be accepted that, by reason of the exclusion, Comcare is not liable to pay compensation to Mr Drinkwater for the disorder suffered by him in April 2015.
76 In this circumstance, nothing turns on s 5A(2)(f) of the SRC Act. The list of examples of "reasonable administrative action" in s 5A(2) is in terms non-exhaustive and does not qualify the meaning of that expression where it appears in s 5A(1). The reference in s 5A(2)(f) to "anything reasonable done in connection with the employee's failure ... to retain a benefit, in connection with his or her employment" cannot constrain the ordinary and natural meaning of "reasonable administrative action" in s 5A(1), although it can remove doubt about the width of that expression: see CBA v Reeve at [26] (Gray J) and [62] (Rares and Tracey JJ); and Drenth v Comcare at [21]. It is therefore unnecessary to consider the second question raised by Comcare - whether the Tribunal failed to take into account a relevant consideration, being the operation of s 5A(2)(f) of the SRC Act.
77 We note that the parties disagreed about whether Comcare had made submissions to the Tribunal about the application of s 5A(2)(f). For Mr Drinkwater, it was said that Comcare had done no more than repeat s 5A of the SRC Act in its statement of issues, facts and contentions and that Comcare had made no submissions before the Tribunal "as to what [s 5A(2)(f)] meant and how it ought to be applied on the facts of the case". It was submitted that Comcare had not raised the issue properly or at all before the Tribunal, in order for it to raise this second question about s 5A(2)(f). This was disputed by Comcare.
78 We also note that the issue about Comcare's entitlement to raise this second question was not raised in Mr Drinkwater's written submissions filed pursuant to court order before the hearing of the appeal. Rather, it seems that the issue was first raised on his behalf with Comcare in a letter from his solicitors dated 6 March 2018, some two days before the hearing of the appeal. This was very late, as Comcare submitted. The delay was not explained.
79 The Tribunal would, it seems, have been aware of the relevance of s 5A(2)(f) of the SRC Act, bearing in mind that the review delegate relied on this provision in reaching the decision subject to the Tribunal's review (see [17] above) and that the Tribunal indirectly referred to the provision when it set out Comcare's argument in its reasons (see [23] above). Section 5A(2)(f) was also the subject of correspondence between the parties' solicitors several days before the Tribunal hearing on 10 April 2017. There was, however, no express reference to s 5A(2)(f) in the submissions made by Comcare to the Tribunal at the hearing. Nor was there any such reference in its earlier statement of issues, facts and contentions filed before the hearing. The extent to which Comcare ultimately relied on s 5A(2)(f) before the Tribunal was therefore unclear. This may account for the absence of any reference to the provision in the Tribunal's reasons and the parties' current disagreement. It is unnecessary, however, to resolve the disagreement, having regard to the conclusion we have already reached that nothing turns in this case on s 5A(2)(f) of the SRC Act and it is unnecessary to deal with Comcare's second question concerning that provision.