Reasonable Administrative Action

Businesses failing to comply with their industrial obligations will open themselves up to claims for workers’ compensation.

In a recent decision by the Administrative Appeals Tribunal in Sydney, the Tribunal found that the employer, Centrelink, had failed to engage in “reasonable administrative action” as it had not complied with the relevant provisions of the Centrelink Agreement 2009-2011.

This serves as a timely reminder to employers to ensure they comply with all their industrial obligations in order to minimise their liability in respect of claims for psychological injury arising out of administrative action.

Background

The worker, psychologist Jenny Pettiford, was employed as a job capacity assessor with Centrelink.  She was diagnosed with anxiety and a depressive disorder and had not worked since a meeting with her manager, Paul Nugent, on 30 August 2011, during which she had been directed to work “standard hours”.

Ms Pettiford had previously made a complaint of bullying and harassment against Mr Nugent on 8 March 2010, which was investigated and her allegations had not been substantiated.  As a result of the allegations, however, Centrelink removed Ms Pettiford from Mr Nugent’s supervision.

On 15 August 2011, Centrelink advised Ms Pettiford that Mr Nugent would be reappointed as her supervisor as a result of a restructure within Centrelink.

While working at Centrelink, Ms Pettiford lived with her husband on a farm and shared the use of a car.  There was no public transport servicing the area.  Ms Pettiford worked a 4 day week, commencing each day at 7am.  This allowed her to travel to and from work with her husband, who started work at 7am.  In 2010, Ms Pettiford and Centrelink had several discussions regarding Ms Pettiford’s work hours and agreed that on a trial basis Ms Pettiford could work a nine day fortnight, starting at 7am, with a 60 minute break for lunch.

In May 2010, Centrelink had discussed with Ms Pettiford her hours of work and approved a 3 month trial during which she would work 35 hours and 20 minutes per week, Monday, Tuesday, Thursday and Friday, 7am to 4.30pm with a 40 minute lunch break.

30 August 2011 Meeting

In early 2011, it was observed that Ms Pettiford’s timesheets consistently recorded a start time of 7am, but her finish times varied and were recorded to the minute.  CCTV footage showed that Ms Pettiford arrived at work one morning at 7.20am carrying shopping bags and her supervisor at the time observed that Ms Pettiford was commencing work at 6am on Fridays.  Her supervisor sent her an email advising her that she had not granted approval for Ms Pettiford to commence work before 7am and directed her to cease doing so.

After he was reappointed as her supervisor, Mr Nugent sent Ms Pettiford an email directing her to attend a meeting on 30 August 2011.  At the meeting, Mr Nugent announced that from 4 October 2011, Ms Pettiford would be required to work “standard hours” (i.e. Monday to Friday, 8am to 4pm) and that this was “non-negotiable”.

Findings

Comcare, as the Compensating Authority, accepted that Ms Pettiford’s claimed injuries were contributed to by her employment with Centrelink, but it asserted that her injuries were not compensable as they arose as a result of the direction given by Mr Nugent at the meeting on 30 August 2011; which was reasonable administrative action taken in a reasonable manner.

The Tribunal noted that Ms Pettiford was the only psychologist employed at Centrelink’s Mudgee office.  The hours that she was working meant that for 1 day in 5 days, clients and staff of the Mudgee office did not have access to a psychologist.  If her hours were spread over 5 days, her clients would have greater flexibility and access to her services.  The fact that she was starting an hour prior to everybody else also raised potential health and safety problems and the evidence available from early 2011 raised legitimate concerns about Ms Pettiford’s actual attendance.

The Tribunal then went on to find however, that “…the assessment of whether the direction was reasonable cannot be made at an abstract level but requires consideration to be given to the circumstances surrounding the issue of the direction.  These include any provisions governing the conditions of Ms Pettiford’s employment”.

Ms Pettiford’s employment was governed by the Centrelink Agreement 2009-2011 which relevantly states in clause 64.2 “An employee and their team leader/manager will together design, genuinely negotiating where necessary, the employee’s regular hours”.  The Tribunal found that in the meeting on 30 August 2011, Mr Nugent did not genuinely negotiate with Ms Pettiford, but notified her that her work hours would be varied and that he was not prepared to negotiate.

As the obligation imposed by clause 64.2 had not been satisfied, the power to direct Ms Pettiford to work default hours could not be exercised and so the direction made by Mr Nugent was neither reasonable administrative action or taken in a reasonable manner.  As a result Ms Pettiford established that she had suffered a compensable injury.

Conclusions

Although this decision is not binding on other jurisdictions, it is likely that similar reasoning would be applied to psychological claims brought pursuant to the Workers Rehabilitation and Compensation Act 1986 (SA) and applications in the Anti-Bullying Jurisdiction of the Fair Work Act 2009 (Cth).

Employers should note that in order to avail themselves of the defences available for reasonable administrative action taken in a reasonable manner, they will need to be able to establish that they have complied with any industrial obligations that might apply in the circumstances of the case.  A failure to do so will likely lead to workers being able to establish that the actions of an employer did not constitute reasonable administrative action taken in a reasonable manner.

 

For more information, please contact:
Patrick Walsh

Patrick Walsh
Director
p.  +61 8 8124 1941
e.  Email me

This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this article, or what it means for you, your business or your clients' businesses, please feel free to contact us.

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