Long v Comcare

RELEVANT LEGISLATION 9 The entitlement of a Commonwealth employee to compensation arises from s 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the Act"), which provides: 14 Compensation for injuries (1) Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment. (2) Compensation is not payable in respect of an injury that is intentionally self-inflicted. (3) Compensation is not payable in respect of an injury that is caused by the serious and wilful misconduct of the employee but is not intentionally self-inflicted, unless the injury results in death, or serious and permanent impairment. 10 Section 5A defines "injury" for the purposes of s 14 as: 5A Definition of injury (1) In this Act: injury means: (a) a disease suffered by an employee; or (b) 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 (c) 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. (2) For the purposes of subsection (1) and without limiting that subsection, reasonable administrative action is taken to include the following: (a) a reasonable appraisal of the employee's performance; (b) a reasonable counselling action (whether formal or informal) taken in respect of the employee's employment; (c) … (d) … (e) anything reasonable done in connection with an action mentioned in paragraph (a), (b), (c) or (d); (f) … 5B Definition of disease (1) In this Act: disease means: (a) an ailment suffered by an employee; or (b) an aggravation of such an ailment; that was contributed to, to a significant degree, by the employee's employment by the Commonwealth or a licensee. (2) … (3) In this Act: significant degree means a degree that is substantially more than material.

THE TRIBUNAL'S DECISION 11 The Tribunal determined that Ms Long suffered a psychiatric injury and that her employment with the Commonwealth contributed to a significant degree to her psychiatric injury. The QC and QA processes, to which she was subject in 2009, were found to be significant contributing factors to the onset of her psychiatric injury. The principal issue which was contested by the parties in the Tribunal was whether or not the QA process constituted an "administrative action…in respect of [Ms Long's] employment" within the meaning of s 5A(1) of the Act. If it was it took her psychiatric condition outside the definition of compensable "injury". 12 The work of the organ donor registry involved the recording of information relating to offers or potential offers of body parts for transplanting in donees. The registry was required to ensure the accuracy of its records. Incorrect data could mean that a potential donee might be deprived of an opportunity of receiving a lifesaving transplant. As a result Medicare required that processing should not be less than 97, 98 or 99% accurate (the difference in these figures is attributable to the varying evidence of witnesses called by Comcare in the Tribunal). 13 The registry sought to ensure the maintenance of required standards by using the QC and QA processes. In evidence, accepted by the Tribunal, one of Ms Long's supervisors explained how those processes worked as follows: "2. In Medicare there are two quality checking procedures. One is known as Quality Assurance (QA) and the other one is Quality Control (QC). QC is generally performed the next day on a random selection of work for each employee. Three pieces of work would be selected daily for each processed batch and the results were reported to the National Audit Integrity Team. Note: QC is a National Audit Integrity operational requirement and is performed on all staff that have been deemed competent. 3. QA is not reported. QA is undertaken when a new employee commences. QA would continue until the employee becomes competent. Note: If QA is being performed on a staff member they are not also QC'd. 4. At various times random checks (informal checks) on accuracy levels were carried out on all staff to ensure that the team was meeting the required accuracy of processing standards. A date would be selected for a staff member and the processed work checked. If there were a number of errors identified, another date would be selected and checked. If a pattern of errors continue to be identified, the person would be taken off the formal daily QC process and QA would be performed on all transaction[s] until they had reached the standard required." 14 In early 2009 periodic checks of Ms Long's work disclosed deterioration in the quality of her work. These deficiencies were drawn to Ms Long's attention. She took leave between 20 March and 9 April 2009. At some point after her return from leave Ms Long's work was subjected to what was described as an "informal 100% QA process". This meant that all her daily work output was checked. Where errors were detected she was so advised in an effort to improve her ongoing performance. On one day (5 May) no errors were detected. Within a week, however, numerous errors were again detected. By 3 June 2009 an accuracy rate of 92% was found. Ms Long's supervisor sent her an email on that day advising her of a meeting which he proposed to conduct with her the following morning to discuss her performance. In the event, Ms Long did not attend. She had, she said, intended to go "but when I got home on 3 June I just crawled into bed and couldn't leave it for 2 days." She consulted her general practitioner who certified that she was unfit for work for about eight weeks. 15 The Tribunal concluded that Ms Long's injury was excluded from the definition of "injury". It gave its reasons at paragraphs [29] to [35]: "29. So the next question I have to address was, was the quality assurance process undertaken an administrative action? 30. I note at this stage that the QC process was random. The Quality Assurance program was, at first instance, random but could become targeted as a result of unsatisfactory results either from a random QC action or a quality assurance action. Once this occurs, the Quality Assurance becomes targeted and will continue until the employee reaches an acceptable level of accuracy. If that does not occur, the employee will then be forced to undertake a Performance Improvement Program, which could be a precursor to dismissal. 31. I note that Ms Schokman [counsel for Ms Long] suggests that administrative action does not occur until a worker is placed upon the improvement program, referred to as the PIP, whereas Mr Hobbs [counsel for Comcare] contends that there can be an overlap between operational action and administrative action and that administrative action commences once the targeted QA commences. There is a reasonable amount of law in relation to this and the lines and distinctions are often quite fine. I refer firstly to the Commonwealth Bank of Australia v Reeve [2012] FCAFC 21 paragraphs 24, 33 and 60, paragraphs 24 and 33 appearing in the judgment of Gray J and paragraphs 60 in the judgments of Rares and Tracey JJ. '24. In this respect, it is necessary to bear in mind the principle that is taken to have been established by Hart v Comcare [2005] FCAFC 16 (2005) 87 ALD 341 at [21]-[23]. That principle is that, however many separate causes of an injury may have arisen out of, or in the course of, an employee's employment, if any one of those causes falls within the exclusion, the employee is wholly disentitled to compensation in respect of that injury. It follows that the more broadly the exclusion is [construed], the more destructive it becomes of the right to compensation afforded by the SRC Act. For instance, if the exclusion were to be construed so that any action that could be described as falling within the ordinary meaning of 'administrative action', taken by an employer, and commencing a chain of causation that resulted in injury to an employee of that employer, it is difficult to see that any employee would have any entitlement to compensation. Some examples surfaced in the course of argument on the appeal. It could be argued that an injury to an employee in falling down stairs at his or her workplace was the result of administrative action in directing that employee to work at that workplace. If a truck driver became injured as a result of a motor vehicle collision, it could be said that the injury was the result of the administrative action of directing the driver to drive a particular route on that day. In the present case, it could be said that Mr Reeve's injury resulted from the administrative action of appointing him to manage the Mt Hawthorn branch of the CBA. Counsel for the CBA disclaimed any intention to argue for such an interpretation of the exclusion. They did not attempt to offer a way in which the words 'as a result of' might be confined to a causal relationship of sufficient proximity to prevent the exclusion having that kind of operation, if the words 'administrative action' were to be given a broad construction of the kind for which counsel for the CBA contended. 33. 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. This meaning may have been the one the Tribunal was attempting to express in its reasons for decision, when it referred to 'legitimate human resource management actions'. Although inapt, the description used by the Tribunal is not far removed from the proper construction of the exclusion. 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. 60. 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. The action must be in 'respect of' something that exists -[t]he 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] FCAFC 88; (2010) 185 FCR 566 at 586 [72]-[73] per Dowsett J, with whom Spender J agreed. An analogy, although taken from a different statutory context, can be seen [from] the facts in The Commonwealth v Rutledge [1964] HCA 63; (1964) 111 CLR 1. Thereafter working in her job for over four years, an employee, who was latently susceptible to developing paranoia, was required to perform new duties that involved her spying on fellow employees. Within two weeks the employee developed into an active psychotic. As Menzies J put it (111 CLR at 11): '... it is sufficient, however, if the spying which was her employment [for] the time being, had in its nature something to aggravate a pre-existing condition of latent paranoia or to accelerate a change from that condition into that of active psychosis. Here I think the evidence did have the requisite generality.' (emphasis added)' 32. That case was followed by two Peters v Comcare cases, the first one being a decision of Bromberg J in Peters v Comcare [2013] FCA 808, where, at paragraph 34, he grants an extension of time on the basis that he considers there was an arguable case. That was then further considered in Peters v Comcare [2013] FCA 1361 by Tracey J, who, of course, was one of the justices in the Reeve case, and I refer to the analysis carried out by his Honour at paragraphs 28, 30 and 31. '28. The Court drew a distinction between 'administrative action' and 'operational action'. 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 unreasonably taken (followed also in National Australia Bank Ltd v KRDV [2012] FCA 543; (2012) 292 ALR 639 at [35] and Buck v Comcare [2012] AATA 327; (2012) 130 ALD 154 at ([45]).' (Emphasis in original). 30. The Tribunal was alert to the distinction which had been drawn by the Court in Reeve. It quoted the passage from the judgment of Gray J which is quoted above at [28]. It found that the conduct about which Ms Peters complained took place in respect of her employment and fell within the concept of 'administrative action' of the kind identified in Reeve. 31. The relevant events related to the administration of Ms Peters' employment as an employee and her relationship with her employer. For this reason I am satisfied that, even if the Court had jurisdiction to entertain the appeal, Ms Peters could not have succeeded on this ground.' At the end of the day, the most relevant paragraph seems to me to be the comments made by his Honour at paragraph 28 of Peters number 2, where he says: 'The Court drew a distinction between 'administrative action' and 'operational action'. Gray J concluded (at [33]) that: and he then sets out the relevant paragraph at 60: 'Rares J and I said that the qualification of the final phase of the exclusion in section 5A(1) is important. It requires the action be taken in respect of the employee's employment. That qualification distinguishes the criteri[on] of the exclusion in section 5A(1) from the actual circumstances that the Act uses to impose liability, namely, an actual circumstance that arises out of, or in the course of, the employee's employment. This suggests that [the] [P]arliament intended this [exclusory] action to 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 [per]formed in his [or her] employment or job.' 33. As already noted, the applicant contends that the action would not progress from operation to administrative until the PIP process was undertaken. I note the supervisors at the relevant time were concerned not to advance Ms Long to the PIP because of her personal problems, including the 2008 issues, but that process could have been appropriate because of her error rate. 34. I find that they actually embarked upon a particular program and a program particular to Ms Long; that is, rather than putting additional pressure on her by making her undertake the PIP, which would have led to a dismissal should her performance not be corrected or improved to an appropriate rate, they, in fact, place[d] her on a targeted quality assurance program in an attempt to get her accuracy up to the appropriate rate. It is a fine line to draw between the operational and administrative actions, but because this was a program specifically designed for Ms Long and particular to her, I find that it was, in fact, an administrative action and not an operational action. 35. I note that I would also find it was an administrative action if it was a QA process undertaken in the normal course of events as a result of an unacceptable level [of] inaccuracy being obtained by Ms Long. In other words, I find that the actions were done in respect of the employment relationship that Ms Long had with the Commonwealth and were of such a nature to be administrative rather than operational actions, and hence they are excluded from the definition of injury unless the action taken was not reasonable or was unreasonably taken."

THE APPEAL 16 Ms Long's appeal was founded on four questions of law and four associated grounds of appeal. In essence the first three grounds alleged that, on the evidence before it, it was not open to the Tribunal to find that the "reasonable administrative action" exception to the definition of "injury" applied so as to preclude Ms Long from obtaining compensation under the Act. The fourth ground alleged that the Tribunal had failed to provide adequate reasons for concluding that the exemption applied and, in particular, had failed to give reasons for finding that the QA process had been "undertaken in the normal course of events as a result of an unacceptable level [of] inaccuracy" and was "administrative action". 17 Ms Long sought an order that she be paid compensation for her psychiatric injury or, in the alternative, an order setting aside the Tribunal's decision and remitting the matter for further determination according to law. 18 The reasonableness of the action taken by Ms Long's employer was not challenged. What was in issue was whether the imposition on Ms Long of the "informal 100% QA process" was "administrative action" within the meaning of s 5A of the Act. Ms Long contended that it was not; Comcare that it was. As the Tribunal recorded (at [31]) the competing contentions before it were that administrative action could not be said to have occurred until Medicare placed an employee on a performance improvement program, or, as Comcare argued, the imposition of the "targeted" QA regime constituted such action. The parties maintained these positions during oral argument on appeal. 19 Both parties accepted that the Full Court's decision in Commonwealth Bank of Australia v Reeve (2012) 199 FCR 463 determined the proper construction to be accorded to the words "administrative action". Both accepted that the Tribunal was correct in so directing itself.

CONSIDERATION 20 A distinction between "administrative" action and "operational" decisions was recognised by the Full Court in Reeve. 21 Mr Reeve had developed a depressive illness while working as a manager of a Perth branch of the Commonwealth Bank. The circumstances which contributed to his condition included organisational and staff changes, the humiliation of a telephone conference 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. The Full Court held that the exclusion under s 5A of the Act applied to specific action taken in respect of an individual's employment, such as disciplinary action ("administrative action"), as opposed to action forming part of the everyday tasks and duties of that employment ("operational decisions"). Thus, the ordinary work routine, changes to routine and directions to perform work did not constitute "reasonable administrative action taken in respect of the employee's employment". The Full Court concluded that the events which contributed to Mr Reeve's condition were part of his ordinary work duties as an employee and he was, therefore, not disentitled to compensation by operation of the qualification in s 5A(1) of the Act. 22 The distinction between "administrative action" and "operational" decisions was explained by Gray J at [33] in the passage quoted by the Tribunal (see above at [15]). 23 At [60] (in another passage quoted by the Tribunal) Rares J and I drew a similar distinction. 24 Both judgments 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. 25 The Tribunal was alert to the distinction which had been drawn by the Court in Reeve. It found that the conduct about which Ms Long complained took place in respect of her employment and fell within the concept of "administrative action" of the kind identified in Reeve. 26 The Tribunal 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. 27 Ms Long challenged these findings. She contended that the QA process was an incident of her employment, duties or tasks and was not directed to her employment relationship with her employer. The process, she said, was not an appraisal of her work performance but was rather concerned with the maintenance of standards and the integrity of the organ donor register. She had been subjected to the QA process in the normal course of her duties as a result of the random check that had identified an unacceptable error rate on her part. The purpose of the process was to improve her level of accuracy. She emphasised that the process was "informal" in the sense that Medicare had not invoked its "Managing Inefficiency Policy" by issuing her with a written notification of poor performance. The issuing of such a notice was a necessary precursor for the ongoing review of an employee's performance which, if not improved, could lead to the transfer of the employee to other duties or the termination of his or her employment. The policy provided for various measures to assist underperforming employees such as the development of performance support agreements and performance improvement plans. The policy was incorporated in the Medicare Australia Collective Agreement 2008 which governed Ms Long's employment at relevant times. Ms Long also complained that the Tribunal's reasons did not include "a separate analysis of whether the action was 'in respect of the employee's employment'." 28 I do not accept these submissions. 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. 29 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. Each and every error made by her in the course of this process was to be drawn to her attention in the hope that there would be no repetition. 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. Had it done so various formal steps would have been taken, and, had her work not improved, she might, ultimately, have faced termination of her employment. The fact that Medicare chose to adopt a less formal remedial procedure, because of Ms Long's personal circumstances, 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. Despite these efforts she did not meet the standards. It was this extraordinary, person-specific, regime which gave rise to the psychiatric impairment for which Ms Long sought compensation. Had her illness not forced her to take sick leave, her failure to improve may have led to more formal action by her employer. Whether or not that would have occurred is a matter of speculation. It is, in any event, immaterial because, what is in issue is the action which was taken, not the characterisation of it as "formal" or "informal" or the potential consequences for Ms Long of continued sub-standard performance. 30 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. 31 The Tribunal correctly identified and applied the relevant principles in reaching its conclusion. Its factual findings were open to it on the evidence. No appellable error has been established. 32 The Tribunal was required, by s 43 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act") to give reasons for its decision. It did so. Ms Long objected that those reasons were inadequate. 33 Section 43(2B) of the AAT Act required that the Tribunal's written reasons "include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based." 34 Ms Long did not complain that the Tribunal had failed to make findings on material questions of fact. Rather, she alleged that the reasons had failed to expose the basis for the Tribunal's findings that the QA process, to which she had been subjected, had been "undertaken in the normal course of events as a result of an unacceptable level [of] inaccuracy" and was "administrative action". 35 As to the former, that finding (at [35]) was an alternative finding on which the Tribunal's ultimate conclusion did not depend. 36 The Tribunal's ultimate finding that the imposition of the "informal 100% QA process" constituted "administrative action" was, in my view, explained in sufficient detail. The Tribunal's reasons, although economically expressed, appear at [34] and the latter part of [35]. They constitute an adequate exposition of the Tribunal's process of reasoning. 37 Even had I not been so persuaded, it would not have followed necessarily that any failure by the Tribunal to satisfy the statutory obligations, imposed on it by s 43 of the AAT Act, would have given rise to an appellable error of law. In other words: just because the reasons given for a decision may not meet statutory criteria does not necessarily mean that the decision itself is affected by error: cf Repatriation Commission v O'Brien (1985) 155 CLR 422 at 445-6 (Brennan J). So much was, properly, conceded by counsel for Ms Long in the course of argument.

DISPOSITION 38 The appeal must be dismissed with costs. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.