Workers Compensation - Entitlement to compensation - Exclusions - Stress injuries: as a result of reasonable disciplinary or administrative action by employer - Action directed towards worker other than claimant.

Workers Rehabilitation and Compensation Act 1988 (Tas), s 25(1A).

Workers Compensation - Proceedings to obtain compensation - Preliminary requirements - Notice of injury - Generally - What constitutes notice - Observations by employer - Observations employer ought to have made.

Workers Rehabilitation and Compensation Act 1988 (Tas), s 32(1)(a).

Workers Compensation - Proceedings to obtain compensation - Preliminary requirements - Notice of injury - Reasons for failure or inaccuracy - Other reasonable cause - Expectation of early recovery - Consequences of depression and treatment - Decision to use leave entitlements.

Workers Rehabilitation and Compensation Act 1988 (Tas), s 37(1)(a).

Judgment Number: [2014] TASSC 68

THE FRIENDS' SCHOOL INC v GILLIAN LYNN EDMISTON

1. This is an appeal from a decision of the Workers Rehabilitation and Compensation Tribunal, constituted by its Chief Commissioner, Mr S R Carey. The respondent, Gillian Edmiston, was employed as the co-deputy head of the primary school operated by the appellant, The Friends' School Inc ("the employer"). There were difficulties between the head of the primary school and the employer. The respondent took on the role of a support person for the head. After some stressful months, the head resigned on 15 March 2013. Thereafter the respondent's health, particularly her mental health, deteriorated. As a result she absented herself from work, first taking sick leave, and later taking recreational leave and long service leave. She submitted a formal claim for workers compensation dated 5 September 2013. The employer disputed her claim. She referred the matter to the tribunal. After a defended hearing, the learned Chief Commissioner determined that she was entitled to workers compensation: E v The Friends' School Inc [2014] TASWRCT 36. This is an appeal by the employer from that determination.
2. The employer contends that the respondent was not entitled to workers compensation for two reasons:
   • By ground 1 of the notice of appeal, it contends that the respondent's "injury" was an illness of the mind that arose substantially from reasonable action taken by it to discipline the head of the primary school - not the respondent - or reasonable administrative action taken in respect of the head of the primary school, and that it follows that compensation is not payable to the respondent because of the provisions of s 25(1A) of the Workers Rehabilitation and Compensation Act 1988 ("the Act").
   • By ground 2 it contends that the respondent did not give notice of her "injury" as soon as practicable after the occurrence of that injury, and that compensation is therefore not payable by reason of s 32(1)(a) of the Act.
3. These contentions were considered and rejected by the learned Chief Commissioner.

1. The employer relies on s 25(1A)(a) and (c) of the Act. Those provisions read as follows:

"(1A) Compensation is not payable under this Act in respect of a disease which is an illness of the mind or a disorder of the mind and which arises substantially from-

(a) reasonable action taken in a reasonable manner by an employer to transfer, demote, discipline or counsel a worker or to bring about the cessation of a worker's employment; or

(c) reasonable administrative action taken in a reasonable manner by an employer in connection with a worker's employment ...".

1. The employer contends that those provisions apply when an illness or disorder of the mind suffered by one worker arises from reasonable action taken in respect of a second worker. The respondent contends that those provisions apply only when the illness or disorder of the mind is suffered by the same worker who was the subject of the reasonable action. That is how the learned Chief Commissioner interpreted the relevant provisions.
2. The employer's interpretation of the relevant paragraphs is a literal one. The head of the primary school was a "worker". Section 25(1A) is not expressly confined in its operation to action towards the worker suffering the illness or disorder of the mind, or to action in connection with that worker's employment.
3. There are similar legislative provisions in other States that are expressly so confined: Workers Rehabilitation and Compensation Act 1986 (SA), s 30A; Workers' Compensation and Rehabilitation Act 2003 (Qld), s 32(5); Workers' Compensation and Injury Management Act 1981 (WA), definition of "injury" in s 5(1), and s 5(4). By contrast, s 11A(1) of the Workers Compensation Act 1987 (NSW) expressly extends a similar provision to action taken with respect to "workers" generally.
4. As a general rule, because workers compensation legislation is beneficial legislation, ambiguities therein ought to be resolved in favour of the class of persons intended to be benefited by the legislation, namely workers: McDermott v Owners of SS Tintoretto [1911] AC 35 at 46; Wilson v Wilson's Tile Works Pty Ltd (1960) 104 CLR 328 at 335; Bird v Commonwealth [1988] HCA 23; (1988) 165 CLR 1 at 9. However excepting provisions in beneficial legislation do not always require beneficial interpretation. Whether a beneficial interpretation is appropriate "depends on the particular statutory provision and an analysis of its language and purpose": Rose v Secretary, Department of Social Security (1990) 21 FCR 241 at 244.
5. Subsection (1A) was inserted into s 25 by the Workers Rehabilitation and Compensation Reform Act 1995, s 24(a). During debate concerning the relevant Bill in the House of Assembly, the relevant Minister, Mr Groom, said the following in relation to the purpose of the amendment (Hansard, 30 June 1995, page 141):

"It is basically a matter of action taken by an employer which may be said to have caused an illness or a disease but which is reasonable action. In a sense it does not relate to the question of no fault; no one has to establish fault on the part of the employer to gain compensation but, in a sense, it is a defence. It relates particularly to the stresstype situation where for example someone has been demoted or not promoted and therefore is stressed because of that. Apparently there are quite a number of examples of this occurring and it is a growing problem in a number of jurisdictions. This is based very much on the South Australian legislation which has been developed and it indicates that we are looking at action taken by an employer."

1. That passage indicates that the mischief towards which the subsection was directed concerned the situation where a worker who has been the subject of reasonable action develops a stress-related medical disorder as a result, and claims compensation in respect of it. That was the situation that the Minister referred to, and it was the only situation covered by the relevant South Australian provision, which I have referred to above. Section 8A(1) of the Acts Interpretation Act 1931 requires me, in the interpretation of s 25(1A), to prefer an interpretation that promotes the purpose or object of that provision. Section 8B(1) of the Acts Interpretation Act permits me to give consideration to the passage in Hansard quoted above as extrinsic material capable of assisting in the interpretation of s 25(1A).
2. The literal interpretation of s 25(1A) contended for by the employer could have results that some might see as surprising. If an employed manager developed a stress-related medical disorder as a result of routinely having to demote, discipline and sack employees, but had always acted reasonably, no compensation would be payable. But if the same worker developed a stress-related medical disorder as a result of personally taking unreasonable action against other employees, compensation would be payable. If a worker developed a stress-related medical disorder as a result of providing assistance to a sub-contractor in an emotionally difficult situation, that worker would be entitled to compensation when none would have been available if the assisted person had been a fellow employee.
3. Counsel for the employer relied on s 2A(f) of the Act. Section 2A sets out the objects of the Act. By virtue of s 2A(f), one of its objects is to establish a rehabilitation and compensation scheme for workplace injuries that "is fair, affordable, efficient and effective". It was argued that s 25(1A) places limits on the availability of compensation in the interests of affordability. That argument might have carried more weight if s 2A had existed when s 25(1A) was introduced, but it did not. It was introduced by the Workers Rehabilitation and Compensation Amendment Act 2009.
4. In my view s 25(1A) is ambiguous. It does not make clear whether or not it precludes the payment of compensation to a worker other than the worker who has been the subject of the reasonable action with which it is concerned. Having regard to the mischief towards which the subsection was directed, and the consequences that would flow if an interpretation favourable to employers were adopted, it is clear that it must be interpreted as precluding the payment of compensation only to a worker who has been the subject of the reasonable action to which it refers. The learned Chief Commissioner was right to reach that conclusion.

1. In the proceedings before the learned Chief Commissioner, the employer relied on s 32(1)(a) of the Act, which reads as follows:

"(1) Subject to this Act, a person shall not be entitled to compensation under this Act for an injury to a worker unless -

(a) notice of the injury has, as soon as practicable after the occurrence of the injury and before the worker has voluntarily left the employment in which he suffered the injury, been given to the employer of the worker or a person referred to in section 33(1)(b) ...".

1. The employer contended that the respondent had not given notice of her "injury" as soon as practicable after the occurrence of it.
2. Section 33(1) imposes requirements in relation to a notice of injury. It reads as follows:

(i) the employer of the worker or, if there is more than one employer, to one of the employers of the worker; or

(ii) a person under whose supervision the worker is employed; or

(iii) a person designated for the purpose by the employer; or

(iv) a person having authority or apparently having authority to receive such a notice on behalf of the employer;

(c) shall include the name and address of the person injured; and

(d) shall include the nature of the injury, the date on which the injury occurred, and the cause of the injury."

1. The word "injury" is defined in s 3(1) of the Act to include a "disease". The word "disease" is defined in s 3(1) to mean "any ailment, disorder, defect, or morbid condition, whether of sudden or gradual development".
2. The learned Chief Commissioner made a finding that the worker suffered an "injury (disease) being major depression". He found that the respondent's major depression arose out of and in the course of her employment, and that her employment was the major or most significant factor contributing to it. He considered the evidence as to the development of the respondent's depression, and as to the manifestations of that condition that would have been apparent to senior staff of the employer. At [10] of his reasons he concluded:

"I am satisfied that although there is no specific time and place identified as to the giving of notice, the preponderance of the evidence illustrates that notice was given as soon as practicable in light of the particular circumstances at the time. With the evidence as to the observations by relevant staff, their discussions with the worker ... any reasonable employer ought to have been aware that the worker had suffered her mental illness as a result of the processes that she had been involved in, in the course of her employment, the relevant details of same as required by s32 and that there was a likelihood that the worker might well seek to make a claim for compensation in that regard."

1. The learned Chief Commissioner did not make any finding as to when the notice required by s 32(1)(a) was given to the employer. He did no more than to determine that, over the course of an undefined period, the employer became aware, or ought to have become aware, of all the details of which notification was required.
2. The Full Court considered the requirements of ss 32(1)(a) and 33(1)(d) in Wilkins v St Giles Society A80/1995 (AustLII [1995] TASSC 149). Wright J, with whom Cox CJ agreed, said at 4-5; [17]:

"The remedial purpose of workers compensation legislation, whilst possibly helpful in interpreting difficult or obscure statutory provisions in favour of an injured worker, cannot prevail where the words of the Act are free from ambiguity. The Act plainly requires actual notice to one of the persons referred to in s33(1)(b) accompanied by sufficient detail for the employer to identify the causative event, the injurious consequence thereof and the date on which it occurred. What will suffice to fulfil these requirements will obviously vary from case to case."

1. Slicer J, with whom Cox CJ also agreed, said the following at 2; [6]:

"An employee ought not be required to specify the precise nature of the injury in medical terms but the notice must convey sufficient information which alerts the employer to the existence of a condition which is capable of being understood as constituting a physical or psychological state of detriment. Given the wide definition of injury [the] notice may be expressed [in] the widest of terms...".

1. It may be that s 32(1)(a) can be satisfied by a worker providing the required information in a series of communications rather than a single communication. As a general rule, words in the singular include the plural: Acts Interpretation Act, s 24(d). However s 32(1)(a) requires information to be communicated to the employer. Observations made by the employer cannot form part of a notice given to that employer, nor can observations that the employer ought to have made but did not make. Only the communication of information by one person to another can constitute the giving of notice for the purposes of s 32(1)(a).
2. By taking into account observations, and what the employer ought to have been aware of, and by failing to identify any particular communications that satisfied s 32(1)(a), the learned Chief Commissioner erred in law. Ground 2 must therefore succeed. Counsel for the employer made a number of submissions in relation to the "notice of injury" issue that I have not addressed. I need not address any of those other submissions because a critical error of law in relation to that issue has been established.

1. By virtue of s 63(2) of the Act, this appeal is required to be "determined in accordance with the provisions of the Supreme Court Civil Procedure Act 1932 and Rules of Court made under that Act". By virtue of r 709(1) of the Supreme Court Rules 2000, I have all the powers conferred on the Court by r 693 of those rules, as if the tribunal were an inferior court. Rule 693(8) empowers me to set aside, reverse, alter or vary the determination of the tribunal, or to make any other order that I consider appropriate.
2. Counsel for the respondent submitted that, in the event of ground 2 succeeding, I should make a determination of my own as to the issues concerning notice of the injury. Counsel for the employer did not submit that I should take any other course. In the hope of bringing this litigation to an end, I will take that course, rather than remitting the matter to the tribunal.

1. As I have said, s 32(1)(a) requires notice of an injury to be given "as soon as practicable after the occurrence of the injury". The learned Chief Commissioner did not make a finding as to the date of the occurrence of the respondent's "injury". Section 3(5) of the Act relates to that question. It provides as follows:

"(5) For the purposes of this Act, where a worker suffers an injury that is a disease, that injury shall be deemed to have occurred -

(a) on the day on which the worker became totally or partially incapacitated by reason of that injury; or

(b) if a day cannot be ascertained under paragraph (a), on the day on which a medical practitioner has certified that the worker was first incapacitated by reason of that injury."

1. There was uncontroversial evidence about the onset of the respondent's depressive illness, as follows. She went to see her general practitioner, Dr Sutherland, on 15 March 2013 because of acute back pain and stress. She had seen him only days before because of her back pain, but not because of stress. She had been going to work in spite of her back pain, which was improving. Because of her mental condition and her back pain, Dr Sutherland formed the view that she was unfit for work, and gave her a certificate saying that she was unfit for work for the period 15-19 March. However she kept going to work.
2. It may be that the respondent became at least partially incapacitated by reason of her depression on the day of that consultation, 15 March 2013. If not, then the date on which she became incapacitated cannot be ascertained, but 15 March was the day when a medical practitioner first certified, as a consequence of her depression, that she was incapacitated. It follows that, for the purposes of the Act, her "injury" is deemed to have occurred on 15 March 2013. That date was specified in the claim for compensation as "date injury or condition first noticed".
3. At the hearing before the tribunal, the school's deputy principal, Ms Johnson, gave evidence of a conversation during which the respondent told her that she was suffering from depression. However there was no evidence as to what day or what month that conversation took place. The claim for compensation is dated 5 September 2013. The conversation with Ms Johnson could have been as late as August 2013. There is no evidence of any earlier communication that could be regarded as satisfying the notice requirement of s 32(1)(a).
4. The evidence establishes that the respondent had substantial insight into her symptoms in late March and early April 2013. Her symptoms were chronicled in a series of computerised notes that she kept. On 27 March 2013 Dr Sutherland referred her to a psychologist. She saw that psychologist the following day.
5. In the circumstances, I am not satisfied that notice of the injury - depression - was given as soon as practicable after 15 March 2013. There was a delay, possibly for as long as five months.

"(1) The failure to give notice of injury in accordance with section 32(1)(a) or any defect or inaccuracy in such a notice does not affect the worker's right to claim compensation under this Act if -

(a) the failure or defect or inaccuracy was occasioned by mistake, absence from the State of the worker or other reasonable cause; and

(b) it is found in proceedings relating to the worker's right to claim compensation under this Act that the employer's defence is not prejudiced by reason of the failure."

1. The evidence establishes that the respondent and her husband did not begin to think about claiming workers compensation until her leave entitlements had almost run out. Her husband said as much in his evidence.
2. In a report dated 26 September 2013, Dr Sutherland wrote this:

"A workers compensation certificate was not issued initially as Gillian did not wish to make this a compensation case, the Friends School would pay for counselling, she preferred to use her accumulated sick leave (and later holiday leave), and there was the optimistic assumption that issues could be worked through in a short time frame. In retrospect this attitude was consistent with her 'sense of guilt and failure'."

1. In a report dated 15 October 2013, Dr Sutherland wrote this:

"I advised Mrs Edmiston on the 15th of March that work related emotional stress could be considered a compensation issue. At that time the dimensions and likely duration of the problem were not apparent and it seemed reasonable to respect her disinclination to pursue this as a compensation claim. You should appreciate that our focus was on the treatment and the relief of acute distress still coloured by her episode of severe back pain. It was not appropriate to discuss at length the ramifications of whether her symptoms should be treated as compensible [sic]. Subsequently, as her depressive illness emerged, her sense of guilt and self blame, as well as preoccupation with managing her distress, inhibited her from pursuing the compensation claim. Financial aspects did not seem important. This period was governed by the reasonable assumption that her illness would be of limited duration and would settle with the assistance of school funded psychological therapy."

1. When cross-examined about discussions concerning workers compensation, Dr Sutherland said:

"... I think the immediate priority was the fact that she had been in hospital having ECT and very extensive treatment. It would have been difficult to have a tremendously useful conversation with her about that process because of her mental state."

1. The evidence of Dr Sutherland was unshaken and uncontradicted. I accept it.
2. Counsel for the employer submitted to me that the stated reasons for the respondent choosing not to claim workers compensation did not amount to a "reasonable cause" for her not giving notice of her injury. He submitted that she had no substantial reason for not making a claim.
3. I disagree. It is clear that the respondent initially had reason to be optimistic about the likely duration of her depression. Her altruism in deciding to use her leave entitlements instead of claiming compensation should not be regarded as unreasonable. It is clear that there were times in the six months following 15 March 2013 when her mental health and her associated treatment made it impracticable for her to do anything connected with the claiming of compensation. Because of those factors, I am satisfied that her failure to give notice when required was occasioned by reasonable causes.

1. The onus lies on the respondent to show that the employer's defence was not prejudiced by her failure to give notice, but "the burden is not a heavy one": Sullivan v Hobart City Council [1999] TASSC 101 at [12].
2. A great deal of evidence was available to the employer as to events occurring in the course of the respondent's employment, the onset of symptoms of depression, and the treatment of those symptoms. Staff of the school were available for interview. The records of the school, Dr Sutherland, and the psychologist were available. The respondent also saw a psychiatrist on and after 14 June 2013. The psychiatrist's records must have been available. All of the involved health professionals provided reports to the employer's solicitors. The respondent's inpatient hospital records were available. The claim form showed that the insurer was notified of the injury on 28 August 2013. The employer did not adduce any evidence of prejudice. There is no reason to infer that its ability to investigate the claim was impaired as a result of the delay in becoming aware of it.
3. In the circumstances, I am satisfied that the employer did not suffer any prejudice in relation to its defence of the claim for compensation as a result of the respondent's failure to give notice pursuant to s 32(1)(a) when required to do so.

1. Whilst I am satisfied that the respondent failed to give notice of injury in accordance with s 32(1)(a) as soon as practicable after the relevant occurrence, that is of no consequence because, by virtue of s 37(1), the failure to give notice does not affect her right to claim compensation under the Act. There is no reason to reconsider any of the learned Chief Commissioner's findings other than those relating to the "notice of injury" issue. Although he erred in law in relation to that issue, he reached the same conclusion that I have just reached by another route - that s 32(1)(a) does not preclude the respondent from recovering compensation. His reasons were defective, but there is no reason to disturb his determination.
2. The appeal is dismissed.