For the purposes of workers compensation legislation across Australia, an injury includes a disease which arises out of or in the course of employment, so long as it was not suffered as a result of reasonable administrative action taken in a reasonable manner in respect of the employee’s employment.

A disease is an ailment or an aggravation of an ailment where it was contributed to, to a significant degree, by the employee’s employment (significant contribution test). A significant degree means a degree that is substantially more than material. The same test applies across Australia, although the wording of the different Acts vary.

Reasonable management action includes reasonable performance appraisals, counselling, suspension, disciplinary action or anything done in connection with any of the aforementioned actions. It also includes anything reasonable done in connection with an employee’s failure to obtain a promotion, reclassification, transfer or benefit, or to retain a benefit, in connection with his or her employment.

In Gibson and Comcare (Compensation) [2021] AATA 1183, an employee made a workers compensation claim for a psychiatric condition which he suffered over a year prior to his diagnosis (relevant period), while he was temporarily placed on higher duties. The AATA found his condition arose in the course of employment after all medical experts presented views based on the employee’s evidence that he suffered from the psychiatric condition during the relevant period.

The employee referred to stress, anxiety and insomnia he suffered during the relevant period due to difficulties with his supervisor (who had expressed concerns that his performance was lacking), increased work volumes and long hours. The AATA found the significant contribution test was satisfied, despite the medical experts having presented conflicting views around this point.

Although the employee was unaware of his psychological condition during the relevant period, the employee, in hindsight, associated his poor performance to his condition given it was untreated at that time. On diagnosis, his treating psychiatrist recommended Comcare postpone his performance review for 12 months. Comcare did not act on this recommendation.

Comcare had no reasonable management action defence, as the AATA found the increased work volumes and long hours were ‘part and parcel of the employment’.

Lessons

• Remote work carries various health risks. For example, we have seen it frequently blur the line between work and home with the temptation to work longer due to convenience and time saved by travel. These risks have been intensified by the pandemic, which naturally increased stress and anxiety levels in many homes. Employers can mitigate these risks by undertaking an appropriate risk analysis for each employee, instituting appropriate controls, ensuring regular communication between management and employees around individual circumstances, setting clear expectations including around joint goals and objectives, scheduling regular informal team gatherings and ensuring access to support and resources.
• The reasonable management action defence is limited to actions taken in respect of an employee’s employment. It does not include things which are ‘part and parcel of the employment’. For example, where the ordinary duties associated with employment lead to or aggravate an injury, the reasonable management action defence would not apply.
• The relevant period nominated by an employee in a workers compensation claim is critical in determining liability. In the above case, had the employee nominated the time of diagnosis as the relevant period, Comcare may have been able to lead evidence associating his condition to his performance review and thus used the reasonable management action defence to negate the claim.