LawTalk Blog

What is reasonable administrative action in the workplace?

employment law administrative action

All too often clients seek legal advice after developing significant psychological problems as a result of workplace stressors. Sometimes workers feel that they have been bullied, harassed and/or victimised at work. Other times they feel they have been unreasonably denied the chance of a promotion or other entitlements, and other times they feel that the work pressures are so high that they just can't cope.

Unfortunately, no one is immune to the consequences that can flow from these workplace issues, and workers regularly develop diagnosable psychological problems including anxiety, mood disorders, depression, adjustment disorders and even Post Traumatic Stress Disorder.

Sometimes the mental condition resolves on its own without the need to consult with a medical professional or take medication. In some situations, simply being moved away from the bully is enough for a worker to make a full recovery from their illness. But other times, the condition becomes so severe that it renders a worker partially or even totally incapacitated to perform their duties.

If a worker has to take time off work or seek medical treatment as a result of the workplace stress, they should lodge a claim for workers compensation. A successful workers compensation claim would entitle the injured worker to reimbursement for reasonable medical expenses, and payment of income maintenance (often referred to as weekly payments) during their period of incapacitation.

But in order to have a successful claim, the worker firstly needs to prove that they have a recognised psychological/psychiatric condition (that is, simply being 'stressed' is insufficient to lodge a claim for compensation).

Secondly, if the worker shows that he/she does indeed suffer from such a condition, he/she needs to prove that work was a 'substantial cause' of the development of the condition.

The employer and/or WorkCover often argue that other stressors in the worker's life caused the condition, and work was not a substantial cause. For example, if the worker recently suffered the loss of a loved one, or went through a tough divorce, an argument could be made that work was not a substantial cause of the illness.

But assuming that these first two elements are met (that is, the worker is suffering from a psychological/psychiatric condition and work was a substantial cause of the illness), the employer and/or WorkCover may then rely on the defence that the illness resulted from 'reasonable administrative action taken in a reasonable manner'.

If it can be shown that the illness did result from reasonable administrative action taken in a reasonable manner, the workers compensation claim will fail.

Workers compensation claims involving psychological injury are arguably the most difficult due to this legal defence.

Compensation is generally not payable to an injured worker if an employer reasonably transfers, demotes, disciplines, redeploys, retrenches or dismisses a worker. For example, if a worker becomes depressed because they were reasonably disciplined by their boss for constantly arriving at work late, they would not have a claim.

Furthermore, compensation is generally not payable to an injured worker if the employer makes a decision (based on reasonable grounds) not to award or provide a promotion, reclassification or transfer or benefit in connection with employment to the worker. Again, if a worker strongly believes they are entitled to a promotion, but do not receive one, and the employer acted reasonably, their claim could fail. The workers compensation system could not cope with the sheer number of claims that may result from workers upset from not being awarded a promotion.

Although the 'reasonable administrative action' defence is relied upon heavily by WorkCover and employers to reject compensation claims, the scope of this exclusion is actually quite narrow. Importantly, the exception applies to 'reasonable action taken in a reasonable manner'.

This means that a worker's claim should succeed if reasonable action is taken in anunreasonable manner. And also a claim should succeed ifunreasonable actionis taken in a reasonable manner.

Often a decision to discipline or dismiss a worker is the last stage in a long and complex history of workplace events. It is important to look at the entire chronology of workplace events to see if any of the actions were unreasonable, or whether the manner in which the actions were taken was unreasonable.

For example, in isolation a decision to dismiss a worker for poor performance might seem completely reasonable; but if the worker's poor performance was due to years of mismanagement, unreasonable work demands, etc, the worker could have a legitimate claim for their psychological injury.

Similarly, a worker may be legitimately disciplined for incorrect/dangerous use of machinery, and this discipline might cause a mental illness. If, however, the worker had never been properly trained in the use of the machinery even after repeated requests for training, they would likely have a legitimate claim.  

If you feel you are suffering psychologically as a result of workplace stresses, you should consult with your doctor immediately, and consider lodging a workers compensation claim.

If you are suffering psychological stress in the workplace, we recommend the services of 'Beyond Blue'.

Please note, this Blog is posted in Adelaide, South Australia by Andersons Solicitors. It relates to Australian Federal legislation. Andersons Solicitors is a medium sized law firm servicing metropolitan Adelaide and regional South Australia across all areas of law for individuals and businesses.

Contact Us

For enquiries, please fill in the following contact form