How Reasonable is that? Exploring the Section 11A Defence

Wilkinson v State of New South Wales [2020] NSWWCCPD 52 (13 August 2020)

The Applicant in this matter was a Civilian Crime Scene Officer employed by the NSW Police Force. On 13 February 2019 the Applicant was handed a letter containing allegations of misconduct against her.

The allegations were that she had broken into her ex-husband’s house and had otherwise intimidated him. The Applicant ceased work on 15 February 2019, claiming that she had suffered a psychological injury as a result of those allegations, which she claimed were incorrect.

The Arbitrator found that receipt of the letter alleging misconduct and the employer’s subsequent investigation were the main contributing factors to the exacerbation of the Applicant’s pre-existing psychological condition. However, the Arbitrator considered that the employer was able to rely upon a defence pursuant to Section 11A as the injury had been caused by reasonable actions taken or proposed to be taken by the employer with respect to “discipline”.

Section 11A issue on appeal:

The Applicant asserted that the Arbitrator had applied the wrong test when evaluating whether a Section 11A defence was available. She said that the Arbitrator had failed to consider the relevant question of whether the actions of the employer were reasonable upon an objective basis.

Further, she asserted that the Arbitrator had fallen into error by proceeding on the basis that in order for her to find that the actions of the employer were unreasonable, there needed to be evidence of subjective wrong-doing such as negligence, carelessness, malice or deliberate expression of inaccurate allegations.

Legislation:

Section 11A of the Workers Compensation Act 1987 relevantly provides:

No compensation is payable in respect of a psychological injury that is wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to:

  • transfer,
  • demotion,
  • promotion,
  • performance appraisal,
  • discipline,
  • retrenchment or dismissal of Applicants or
  • the provision of employment benefits to Applicants.

Determination on Appeal:

On Appeal Deputy President (DP) Elizabeth Wood provided the following summary of the principles which should be considered by decision makers who are required to determine whether certain management actions were reasonable in the context of a possible Section 11A defence:

  • A decision as to whether the actions of the employer were reasonable requires a broad evaluative judgment (citing Northern New South Wales Local Health Network v Heggie [2013] NSWCA 255; 12 DDCR 95, [71], [171] and [179] (Heggie));
  • The assessment of reasonableness should take into account the rights of the Applicant and the objectives of the employer, and whether an action is reasonable should, in all the circumstances, be addressed by a question of fairness (citing Irwin v Director General of Education (Compensation Court of NSW, Geraghty CCJ, 18 June 1998, No 14068 of 1997, unreported) (Irwin).
  • The reasonableness of the employer’s actions should be assessed “by reference to the circumstances known to that person at the time, taking into account relevant information that the person could have obtained had he or she made reasonable inquiries or exercised reasonable care” (Heggie, [61]).

DP Wood considered that the Arbitrator’s reasoning process fell short of the considerations from Heggie and Irwin. She considered that the absence of malice and/or negligence, and whether the employer’s actions were careless or involved a deliberate intention are matters that are not determinative of the question of reasonableness.

Furthermore, DP Wood said that the Arbitrator had failed to turn her mind to the rights of the Applicant or to questions of fairness. Neither did the Arbitrator consider the knowledge that the employer could have obtained had it made reasonable inquiries or exercised reasonable care.

In addition, the Arbitrator had considered matters which went beyond the actions that were causative of the injury, which was contrary to the principle taken from Heggie.

DP Wood considered that the employer’s action in making those allegations were not a reasonable action with respect to “discipline” and therefore a Section 11A defence was not made out.

Implications:

DP Wood has in this case provided a useful summary of the principles which should be considered by decision makers who are required to determine whether certain management actions were reasonable in the context of any possible Section 11A defence.

Should you have any questions about a particular Workers compensation matter, please telephone our Workers compensation team on either 4929 9333 or 8297 5900.