Workers Compensation - Proceedings to obtain compensation - Determination of claims - Appeals and stated cases - Other matters - Tasmania - Employer disputing liability to make weekly payments - Whether genuine dispute exists by virtue that the injury arose from reasonable action taken in a reasonable manner - What evidence necessary.

Workers Rehabilitation and Compensation Act 1988 (Tas), ss25(1A)(a), 81A.

State of South Australia v Wall (1980) 24 SASR 189; Edgell Birds-Eye v Costello [1995] TASSC 10; (1995) 4 Tas R 319, referred to.

Judgment Number: [2000] TASSC 24

1 The respondent claimed weekly payments of compensation for a condition medically assessed as "anxiety" due to "interpersonal problems at work". She claimed to have first noticed the condition on 29 November 1999. The appellant disputed liability and referred the matter to the Tribunal created by the Workers Rehabilitation and Compensation Act 1988 ("the Act"), pursuant to s81A thereof. The appellant's reasons for disputing liability were said to be:

"1) There is insufficient evidence to substantiate that the injury arose out of and in the course of the worker's employment and, if it is a disease, that the employment contributed to it to a substantial degree. Section 25(1).

2. If the relationship between the injury and employment required by Section 25(1) is established, then the injury arose from reasonable action taken in a reasonable manner by the employer. Section 25(A)."

2 The matter came on before the Tribunal on 2 February 2000 when, in addition to a medical certificate and claim forms, there were tendered a statement by the respondent and one by her supervisor. The Tribunal expressed itself unable to find that a genuine dispute existed and ordered weekly payments and benefits to be made from 29 November 1999. The employer now appeals that decision, but only on the basis that the Tribunal ought to have found that a genuine dispute existed by virtue of the second reason advanced, namely that the injury arose from reasonable action taken in a reasonable manner by it within the meaning of s25(1A)(a), which provides:

"(1A) Compensation is not payable under this Act in respect of a disease 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;"

3 The respondent's statement was to the effect that during a staff meeting at the Bridgewater Service Centre office on 29 November 1999, one Diane Hodge, the respondent's supervisor, had several times said to the respondent in the presence of the manager of the Centre and another employee, one Vicki Howard, that "she did not trust me, did not trust anything I said or did and did not trust my written work". She also claimed Ms Hodge had alleged that "she witnessed me at the counter taking a form from a tenant and that some of our tenants are aggressive in the way they present to the office". Her statement went on:

"She alleges that I took the form from him and then approached the officer and proceeded to tell her that the tenant was really aggressive thus putting undue concerns for safety on the officer concerned. Dianne stated that he was no more aggressive than most of our clients. I challenged her on this alleged incident asking her to name the tenant, the day it occurred and the customer services officer involved, she stated she could not see the point and did not want to involve any other person. I have no knowledge of this incident.

At this point I got very upset and left the office."

She later returned to the meeting and thereafter Ms Hodge claimed that after the tenant had left on this earlier occasion, the respondent had telephoned the police and over-dramatised the situation. It appears that further argument ensued with challenges as to the identity of the tenant and when the latter was identified, Ms Hodge would not give further information as to the contents of the alleged conversations with the tenant or the police. As a result of this confrontation, the respondent claimed she felt physically and mentally exhausted and had consulted a doctor.

4 Ms Hodge's statement acknowledged the fact of the meeting on 29 November 1999 taking place in the presence of the other three employees. It gave a rather tortuous explanation as to how the meeting had come to take place as the result of issues said to have arisen involving Ms Howard. At the meeting called to discuss that issue, another topic had arisen, namely Ms Hodge's statement on another occasion in which she had emphasised the importance of staff giving her accurate reports. Either the respondent or Ms Howard had pressed her for more particularity and as a result she had reluctantly revealed that incorrect information about an incident had been relayed to police by the respondent. Pressed by the respondent for further details as to the identify of the client involved, she had revealed it and the respondent had become "really upset and left the room".

5 The learned Commissioner constituting the Tribunal, having dealt with the first basis of disputing liability (not in issue on this appeal), said:

"The employer has tendered a statement from the team leader, M/s Diane Hodge, which the employer asserts contains evidence sufficient for me to find it arguable that the employer's conduct was reasonable and that section 25 1(a) is therefore available to it. I have closely read Miss Hodge's statement. Essentially it appears to me to be an account of events at and surrounding that meeting on the 29th November. However it seems to me that the statement does not address those two issues which the worker has identified as being the cause of her anxiety, that is, the allegation that she could not be trusted and her alleged inappropriate management of a particular client. Furthermore it seems to me that the statement of Miss Hodge does not present any facts upon which the Tribunal could find that the conduct of the employer with respect to those two matters, that is, the allegations made by M/s Gulliver were reasonable. In fact the statement from Miss Hodge does not even acknowledge that the two events complained of by Miss Gulliver indeed occurred. Having regard to those matters I have come to the view that there is not any evidence before me upon which I am able to make a finding that a genuine dispute exists upon this reference."

6 In determining whether or not a genuine dispute within the meaning of s81A exists, much profit has been derived from the case of State of South Australia v Wall (1980) 24 SASR 189 dealing with similar legislation. There Cox J, with whose judgment the other members of the Full Court agreed, said at 194:

"Bearing in mind the policy of subs(2), there is every good reason, in my opinion, for giving the words 'genuine dispute' a plain and uncomplicated meaning, and not reading into them more than the language of the subsection will reasonably bear. Requiring the Court to be satisfied that the dispute is a genuine one is a safeguard against allowing a colourable and insincere denial of liability to frustrate the policy underlying subs(1). A less legitimate reason, however, for making things more difficult for the employer has been the interpreting of para(b) of subs(2) so as to require what has been called an 'objective' appraisal of the dispute by the Court with the result than an employer who genuinely disputes his liability might well be told that, notwithstanding his attitude, in the opinion of the Court a genuine dispute about liability does not exist. This kind of thinking has led the Court on occasions to make its own appraisal of the merits of the employer's case, whether as to the law or the facts, in order to determine whether they are sufficient to constitute a dispute within the meaning of the paragraph. No doubt a patently feeble legal argument, or an assertion of facts unsupported by evidence, would more readily disincline the Court to consider the dispute to be a genuine one, so far as the employer is concerned. Otherwise I should not expect the merits of the employer's denial to have any bearing on the question before the Court. A right to make an application under subs(2) is given to an employer 'who disputes his liability to pay compensation' and, apart from the introduction of the requirement of genuineness, I cannot think that there is any conceptual difference between the criterion upon which the employer may make his application under subs(2), and the criterion by which the Court will in due course determine it under subs(3). In short, if an employer disputes his liability, it follows that, except in the unlikely event of the worker abandoning his claim, a dispute will necessarily exist. So far as the nature of the dispute itself is concerned, it seems to me to require no more than a challenge or contest to the assertion of liability that the worker has made under subs(1). Again, it must not be a frivolous dispute, or one made without adequate inquiry and consideration, or it will run the risk of not being considered by the Court to be genuine, but otherwise the section, in my opinion, does not look beyond the employer's declared attitude."

As noted by Underwood J in FAI General Insurance Company Limited & Anor v De Saye 23/1992 at 7, that passage was affirmed by the Full Court of South Australia in Schilter v South Australian Institute of Technology (No 1) (1982) 31 SASR 316 and was adopted by Underwood J. It was also adopted by Wright J in Edgell Birds-Eye v Costello [1995] TASSC 10; (1995) 4 Tas R 319 at 325 - 326 and by Zeeman J in Griffiths v Devonport Youth Accommodation Services Inc 39/1996 at 6. In Edgell Birds-Eye v Costello (supra), also at 326, Wright J cited further from the judgment of Cox J in Wall's case at 196 where his Honour had said:

"... the evidence or information to which the employer will have to refer in order to persuade the Court that he genuinely disputes the claim, may in some cases, go no further than a serious assertion that it appears to the employer, on the information available to him (including the materials provided by the worker under subs(1) of 53), that the worker may not be able to make out his claim."

At 326 - 327 of Edgell Birds-Eye v Costello, Wright J said further:

"I am also of opinion that the question whether or not a genuine dispute exists involves a subjective assessment of the employer's bona fide appreciation of issues requiring elucidation or contradiction. An obviously fallacious view of the law would scarcely qualify as a genuine dispute but an arguable case whether of fact or law would meet the statutory criterion."

7 In these circumstances, and particularly having regard to the proposition that the employer may, in some cases, rely on the information available to him including materials supplied by the worker in support of a contention that the worker may not be able to make out his claim, it seems to me that the mere fact that Ms Hodge's statement did not traverse the precise allegations made by the respondent, or even acknowledge that the two events complained of had occurred, is not a sufficient basis for rejecting the employer's contention that a genuine dispute exists because the worker may not be able to make out her claim by virtue of her injury arising substantially from reasonable action taken in a reasonable manner by an employer to discipline or counsel the worker.

8 The facts asserted by Ms Hodge show that the spoken materials at which the respondent took umbrage were uttered by her in her capacity as the respondent's supervisor in a context of seeking to correct what the supervisor perceived to be inappropriate behaviour, that is, the relaying of inaccurate information about clients and incidents involving them. If all that occurred was that which appeared in Ms Hodge's statement, reliance on s25(1A)(a) cannot be said to be frivolous. If the cause of the respondent's incapacitated condition is the uttering of the words she attributes to Ms Hodge, then even though Ms Hodge does not dispute them, a genuine question arises, in my opinion, as to whether or not their utterance amounted to reasonable action taken in a reasonable manner to discipline or counsel the respondent. In my view, the learned Commissioner erred by failing to properly consider whether there was an issue which might invoke the application of the Act, s25(1A) and the reference should not have been dismissed. The Tribunal's order is set aside and in lieu thereof it is ordered that compensation and benefits are not to be paid by the appellant.