Section 30A(b)(iii) - `Reasonable administrative action' given in that it was conceded employment was a substantial cause of the disability - did the facts disclose reasonable administrative action - Workers Rehabilitation and Compensation Act, 1986.

The Corporation (Adelaide Casino) v. Hahnheuser A.163/1995

The WorkCover Corporation (Adelaide Bank Ltd) v. Ockenden A49/1996

Shizas v. Local Government Association (Adelaide City Council) A147/1995

S.A. Mental Health Services Inc. v. Margush S5246

WorkCover Corporation of South Australia v. Summers (1995) 65 S.A.S.R. 243

Like Arthur Miller's Willy Loman - Mr. Hickman was a Salesman.

Between 1975 and 1987 he worked for Sebel Furniture Ltd. becoming State Manager. He then resigned to pursue his own interests.

He rejoined in 1989 as a salesman. In 1994 his health deteriorated and he was referred by his general practitioner to a psychiatrist Dr. B.K. Jha.

In September 1995 he resigned. In November 1995 he submitted a Notice of Disability to the Corporation claiming compensation for depression and stress.

The claim was rejected by the agent on 5 June 1996 on the grounds that:-

1. The agent was not satisfied that the worker suffered from an illness or disorder of the mind as contemplated by Section 30A of the Act.

2. The agent was not satisfied that the employment was the substantial cause of any alleged disability having regard to the worker's history of personal stress.

3. To the extent that the claim of depression/stress was a result of the employment and arises from budget and sales expectations of the employer, those expectations constitute reasonable administrative action taken in a reasonable manner by the employer.

4. The resignation on 29 September 1995 amounts to an abandonment of employment and a breach of mutuality.

The matter was conducted before the Tribunal on agreed documents i.e. no oral evidence was taken.

1. The worker suffers from an adjustment disorder with depressed mood.

2. The disability constituted an illness or disorder of the mind.

3. The disability arose out of the employment with Sebel Furniture Ltd.

4. The employment was a substantial cause of the disability.

The concessions thus made meant that the employer did not persevere with grounds 1 and 2 of the rejection. Ground 4 of the rejection was not mentioned before the Tribunal and I take it to have been abandoned.

The real issue was the employer's contention that the disability arose out of reasonable administrative action taken in a reasonable manner (Section 30A(b)(iii)), the worker who bore the onus of proof did not establish that the disability did not arise from the disqualifying factor in this sub-section.

It is common ground that if the disability arose from the administrative action the worker had the onus of rebutting the disqualifying factor (S.A. Mental Health Services Inc. v. Margush S5246).

It was also common ground that if `administrative action' as it appears in the Act was not legally i.e. causally related to the disability then Section 30A(b)(iii) plays no part in the matter. In that case the worker is entitled to compensation.

Hence the debate is initially narrowed to a decision as to whether the administrative action was the cause of the disability. It is only when that is established in the affirmative that one proceeds to the debate as to whether the action was `reasonable administrative action' taken in a `reasonable manner'.

1. In the documents pp.21-48 a record of interview between Mr. Hickman and a loss assessor dated 18 December 1995.

2. pp.172-198 which is the transcript of Mr. Hickman's evidence before the arbitrator and particularly pp.175-193 being cross-examination on the 20 February 1997.

3. pp.49-62 statement of Wayne Hickman 4 February 1997.

4. pp.117-121 medical reports of Dr. B.K Jha psychiatrist of 13 February 1996 and 4 December 1996.

5. p.114 medical report of Dr. J.R. Clayer of 27 February 1996.

6. Statements and evidence from J.A. Wendt - B.R. Bryan - N.B. Jones and G.A. Murdoch.

8. Report by Robert Bright psychologist of 28 March 1996.

The worker contended that the disability was not the result of `reasonable administrative action' but rather it was a reaction to the whole job itself. Put shortly, the worker's case was said to be on all fours with WorkCover Corporation of South Australia v. Summers (1995) 65 S.A.S.R. 243.

(i) The worker's condition was a reaction to the employer's setting of sales budgets to be attained.

(ii) The preparation and presumption of such budgets is an administrative action that is integral to the operation of manufacturing and selling furniture by Sebel Furniture Ltd. The function of a budget is to enable management to strategically plan its needs in the manufacturing area and relate those needs to the market requirements, and thus generate profits. Budgets serve to monitor the performance of employees and thus are ultimately directed to the employer being able to stay in business.

(iii) Budgetary activity is related to the `functioning of the workplace' rather than the `actual task' performed by the worker.

(iv) To the extent that the worker suffered stress (to use a shorthand term) it was in the context of his own perceived inability to achieve the budget (or sales figures) set for him. Therefore the worker had to show that his disability did not arise from the reasonable administrative action (reasonably taken) of the employer.

As I understand the worker's case, the setting of a budget in general and the particular budget referable to the worker is conceded to be reasonable action and which was carried out in a reasonable fashion. There is no suggestion that the budget was unfair - or penal or was constructed with an ulterior motive in mind.

This narrows the area for decision as to whether the reaction of the worker, was a reaction to the budget process, or whether the budget process was merely one aspect of the whole employment that caused stress.

In some cases e.g. The Corporation (Adelaide Casino) v. Hahnheuser A.163/1995 - Shizas v. Local Government Association (Adeliade City Council) A147/1995. The WorkCover Corporation v. Ockenden A49/1996 - the action is clearly administrative and the stress was clearly a reaction to a defined action - seen in isolation e.g. the transfer to another roster - the disciplinary action of a foreman - cutting the number of working hours and the issue is quite clear.

In this case the issue is not nearly as clear cut as the `single issue' case.

The evidence that is tendered depends greatly on the subjective recollection of the impact of events upon the worker, which reaction is compared for example to the historical material in medical reports. It is indeed trite that the perception of historical events changes both with time, and the circumstances in which the recollections are reproduced. History is in the eye of the beholder. Different emphases are given in the various verbalisations of historical events. It is again trite to observe that in the area of psychological impact, there is both an emotional and verbal barrier as well as historical room for deviation from objective fact - if such objective fact can ever be established.

The reactions to a series of events, do not become reactions to an administrative action - simply because those events are partly generated by the administrative functions of the employer. Further more, caution has to be exercised in imposing too rigid a framework on the explanation of the effect of the simplistic nomination of an event, as the stressor in psychological cases where the genesis of the disability is multifactorial and not clearly in the category of a single event - as it was in the case such as Hahnheuser, Shizas and Ockenden.

The employer relies heavily on the historical material in the reports of Dr. Jha e.g. p.117:-

`He was feeling anxious, tense and stressed out because of the unexpected demands put on him of achieving the sales figures by his employers.'

`(He) was not able cope up with the work because of the unexpected demands set by the employer and uncongenial working conditions.'

`The worker seems to be suffering from the stress due to the unexpected and unachievable demands made by the employer and his inability to achieve the sales figures demanded by the employer.'

`... By 1994, Mr. Hickman had become very anxious about (reaching) the budget ... finding it more and more difficult to reach that budget. He said he began waking in the morning worrying about how he could possibly find enough clients to reach his budget level ...'

The employer submits that those histories are what the worker chose to tell the doctors about the genesis of his condition. They clearly relate to budgetary difficulties. The budget being a legitimate `administrative action' - brings the critical subsection of Section 30A into play.

The worker however submits that the cause of the disability is much more complex than this. See pp.21-48 the book of documents and especially pp.41, 125-176 and 186. In the statement taken before proceedings had commenced on 18 December 1995 at p.41 the worker said to the investigator:-

`... I think it was the nature of the job that was perhaps the nature of the industry, I (think) you'd better ask Dr Jha about that.'

This was reiterated at p.125, and at p.186 and p.187 in cross-examination. Again the worker also relies on other material in Dr. Clayer's report at pp.125 and 126:-

`Eventually, he found the stress of work so intense he was unable to continue. He was not sleeping at night. He was irritable with his wife and their relationship was seriously threatened. He was very anxious, so much so that he could not manage his interactions with clients to achieve the sales that he needed to achieve.'

In my view the genesis of the disability was multi-factorial. Although budget goals were an important factor - and perhaps the focal point of the verbalisation of the worker's stress - other factors are clearly operating. Without repeating all the material in the long interview and the cross-examination, some that stand out are:-

(i) The loss of income consequent upon being unable to meet budgetary goals.

(ii) The general difficulty particularly in the latter years (1993/1994) of being able to sell a product that was priced in the middle to upper price range, into a declining economy.

(iii) The loss of self-esteem in not `performing' when historically the worker had been a top performer. See particularly at p.30 where he recounts that when he was State Manager he took the budget from 1.2 million dollars per annum to 5.5 million dollars in five years, and opened up the Darwin showroom and had people employed there which was run from Adelaide and Alice Springs, Darwin, all of South Australia and Broken Hill.

(iv) The loss of hitherto loyal clients to competitors who undercut the worker's quotes. This being brought about by unfavourable economic conditions i.e. the customers were purchasing a cheaper product.

(v) The difficulty with the territory he was assigned to in that it was less favoured than other territories.

(vi) The reduction in commission and points allocated because of difficult selling conditions.

It is true all of these had an impact on the worker measuring up against the budget. However they collectively gave me the impression that this worker was unable to cope with the conditions as he found them in the latter stages of his employment - conditions that were quite different from those which obtained a decade earlier, and in which he performed very well.

In his own words at pp.186/187 in the course of a very extensive cross-examination:-

`... I knew there were things worrying me apart from the budgets that they gave. I mean, there was a myriad of things that were constantly on my mind. it was affecting my sleep, it was affecting my work patterns, it was affecting my planning. I didn't have the confidence that I used to have. When I did resign at that stage it was really because I just couldn't continue on.'

To me this demonstrates that the real problems were far more complex than the mere `imposition of a budget'.

It is not acceptable to place over emphasis on the history reported by Dr. Jha, as being a comprehensive or exhaustive explanation of the historical processes that produces the breakdown. In the absence of oral evidence from the doctor I would not be prepared to accept that that history comprehension or exhaustive or was intended to be.

It is over simplistic to nominate the budget per se (an administrative action) as the `cause or substantial cause' of the worker's problems - because that was the back drop so to speak against which the worker saw the day to day events of his daily life played out (e.g. losing orders etc.).

The delineation of administrative action in this type of case is fraught with difficulty. Administrative action can be a series of actions not just one act. It is directed to the functioning of the workplace rather than the actual task in hand. In one sense every action of an employer qua employer is an administrative action, but as the Chief Justice points out in Summers Case p.247 most aspects of work relate back to the mandate of the employer. To impose the qualification on Section 30A that the real inquiry should be directed to the `reasonableness' of the instruction would be to defeat most claims, which is not what Parliament intended.

At the end of the day the decision maker should bear in mind what fell from Lander J. in WorkCover Corporation v. Sherriff Judgment S5831 p.11:-

`In all cases the tribunal of fact is simply called upon to establish whether the facts, as established, allow it to be said as a matter of common sense that the disability proved ... arises from the employment as defined in s30.'

Making those changes necessary to his Honour's words, the facts establish as a matter of common sense that this worker's disability was caused by an inability to cope with the job itself and that as such the stress did not arise from administrative action.

I also accept Counsel for Mr. Hickman's submission that to the extent that the budget qua budget figures to be attained, are related to anything, it is not to the functioning of the work or workplace - but the actual task to be performed by the worker.

Hence given that the employment is conceded to be a substantial cause of the worker's disability - there is no question of administrative action to be considered and the worker's condition is therefore compensable in terms of the Act.

Parties are advised that if a party wishes to appeal against any part of this decision which raises a question of law such appeal must be filed with the Registrar in accordance with Form 11 within 14 days of the delivery of this decision and must be served on all parties.