Worker awarded compensation for heart attack from work-related depression; Security guard fails to establish that work at a hospital is noisy employment; Principal contractor to share liability with employer for crane dogman’s three meter fall; Former business development manager ordered to deliver up electronic devices for examination; ABCC releases new guidance for compliance with the national construction code; NERR changes have now commenced; Full Federal Court decision confirms meetings or discussions could be held in multipurpose area; Deed of release with former employee withstands unlawful discrimination challenge; Mentally ill employee not a victim of adverse action because he failed to be contactable during absence
“Worker awarded compensation for heart attack from work-related depression”
Panagaris v Return to Work SA (Careers Australia Institute of Training Pty Ltd)  SAET 18
A Worker sustained a heart attack whilst he was on workers compensation for an accepted psychiatric injury.
The Tribunal accepted that the Worker’s depression was a significant contributing cause to the heart attack.
Mr Panagaris (the Worker) was employed by Careers Australia Institute of Training Pty Ltd (the Employer). In 2014, following changes in management, the Worker developed a perception that his workplace was negative, that he was being excluded from other staff and later formed the view that his workplace had become toxic.
In February 2015, the Worker was invited to a meeting where he was advised that staff and a student had made complaints against him. The Worker was suspended from work on full pay whilst an investigation was carried out. Following this, the Worker’s emotional condition deteriorated and he was diagnosed with major depressive disorder.
In August 2015, the Worker’s employment was terminated by the Employer, which the Worker claimed caused him further distress. The following month, the Worker suffered a heart attack on his way home walking from his local library and as a result required surgeries and ongoing medication.
The Worker’s psychiatric injury was eventually accepted as a compensable injury and he subsequently made a claim for the medical expenses associated with his heart attack. This claim for injury was denied by the agent for Return to Work SA (the Respondent).
The Worker appealed the decision, on the basis that his heart attack arose from his employment. In particular, that his work-related major depressive disorder contributed to his heart attack and that his employment was a significant contributing cause of the heart attack.
The Worker relied upon the medical opinion of a cardiologist, Dr Hetzel, who referred to medical literature that had found that there was a causal association between depression and social isolation and the causes and prognosis of coronary heart disease. After taking into account the Worker’s severe depression, which was exacerbated by the termination of his employment before the heart attack, the lack of exercise and social isolation and the absence of other risk factors, Dr Hetzel concluded that the Worker’s depression was a major factor which lead to the progression of his heart disease and heart attack.
The Respondent relied upon its own medical expert who opined that the Worker’s lack of exercise following his suspension from employment would have contributed to his heart disease and that although there could have been some contribution of the Worker’s depression to his heart attack, the level of contribution could not be quantified.
Judge Hannon noted that the relevant question was whether the Worker had established on the balance of probabilities that his compensable psychiatric condition contributed to his heart attack.
Judge Hannon noted that both medical experts accepted that it was probable that the Worker’s depression contributed to the onset of his heart attack but the level of contribution was disputed.
Judge Hannon accepted that the Worker suffered from chronic depression which affected his physical and mental health and was a greater risk factor which contributed to his underlying coronary heart disease.
Accordingly, Judge Hannon was satisfied on the balance of probabilities that the Worker’s depression was a significant cause of the heart attack as it was a contributing cause to the acceleration of his heart disease and the onset of the heart attack.
Judge Hannon found that the Worker suffered injury which arose out of his employment and that the employment was a significant contributing cause of the injury.
Orders were made for the Worker to be paid compensation for medical treatment relating to his heart attack.
What can your business learn from this decision?
While decided with reference to the specific South Australian workers compensation legislation, this decision is an interesting factual scenario highlighting how broadly some tribunals will interpret the causal link between seemingly unrelated events and workplace injuries.
“Security guard fails to establish that work at a hospital is noisy employment”
Cunningham v State of NSW (Sydney Local Health District)  NSWWCC 45
A security guard exposed to alarms during his work at a hospital has failed to satisfy the NSW Workers Compensation Commission (the Commission) that his employment had the tendency, incidents or characteristics to give rise to a real risk of suffering noise induced hearing loss.
The employee (the Applicant), a security guard at Royal Prince Alfred Hospital (the Hospital) in Sydney claimed compensation for noise induced hearing loss, allegedly sustained as a result of his noisy employment at the Hospital.
The Applicant previously worked as a plant operator with Parramatta City Council and with the Department of Main Roads.
The State of NSW (Sydney Local Health District) (the Respondent) denied liability for the hearing loss on the basis that the Applicant’s employment was not “noisy employment.”
The Applicant alleged that he was intermittently and sometimes continuously exposed to noise throughout the Hospital and in the security control room for up to eight hours per day. The noise included fire alarms, duress alarms, ambulance sirens, police sirens, loud ringing telephones and helicopter landings. The Applicant claimed that he was exposed to between 40 and 60 alarms per day or up to 100 alarms per day if they were being tested.
The Applicant relied on the expert medical evidence of an ear, nose and throat specialist. The specialist stated in his report that the type and frequency the noise described by the Applicant would make the Hospital a noisy employer. The specialist indicated his impression that, in the worst case, the Applicant would attend to alarms for up to two hours per day, when just 15 minutes of exposure during an 8 hours shift would be enough to cause industrial deafness.
The Respondent disputed the Applicant’s reports of noise exposure, drawing a distinction between the signal of an alarm being sounded in the control room and actually attending the location where an alarm had been triggered. The Respondent conducted some sound testing of the Applicant’s working environment and commissioned an expert report to comment on the likely noise levels that he was exposed to. The expert report found that the decibel level and exposure to noise reported by the Applicant to the specialist was unlikely.
Evidence was also provided by another security guard employed by the Hospital who said that the number and duration of the alarms and alarm signals reported by the Applicant was overstated and that the alarm signal could be switched to vibrate in the control room or the volume could be turned down.
There was no dispute between the parties that the Applicant suffered noise induced hearing loss. The substance of the dispute was whether the Hospital was a noisy employer such that employment there could result in noise induced hearing loss.
The Commission found that the Applicant’s evidence failed to distinguish between his exposure to the signals of alarms in the control room and actual alarms sounding on site. The Commission also found that the number of alarms that sounded generally was much lower than the number reported by the Applicant.
Therefore, there was insufficient evidence to demonstrate that the Applicant was exposed to noise levels at the frequency required to establish that he sustained noise induced hearing loss as a result of his employment at the Hospital.
The Commission rejected the Applicant’s claim and made an Award for the Respondent.
Work Health and Safety
“Principal contractor to share liability with employer for crane dogman’s three meter fall”
Coote (by his next friend Stephen Desmond Coote) v Terry’s Crane Hire Pty Ltd  WADC 28
A principal contractor has been found to share liability for a crane dogman’s injuries after he fell three meters through a damaged skylight.
Following a severe hailstorm in 2010, a manufacturing business required that the roof of its workshop be repaired and engaged a principal contractor to undertake the work. The principal contractor in turn engaged a roofing company and a crane hire company to complete the actual roof repair.
The crane hire company supplied a crane, a crane operator and a dogman to assist the roofing company employees with removing old roofing materials from the workshop roof and hoisting new materials to the roof.
The roof of the workshop included two large skylights which had been damaged by hailstones during the storm. The roofing company had been alerted to the danger of the damaged skylights by the principal contractor but the crane hire company had not.
The roofing company employees conducted their own safety assessment of the site before commencing work and when the crane hire company employees arrived at the site they informed the dogman of the safest path across the roof, avoiding the damaged skylights.
Despite this, the dogman repeatedly jumped over or veered quite close to the skylights whilst performing his duties, eventually losing his footing and falling three meters through one of skylights onto the concrete floor of the workshop below. The dogman sustained serious injuries as a result of the fall.
His employer, the crane hire company, accepted liability for the dogman’s injuries but claimed that the principal contractor was also liable.
The question for the Court was whether the principal contractor owed the dogman a duty of care and whether it breached that duty of care.
The Court held that there were two ways in which the principal contractor owed the dogman a duty of care and that both were breached.
- Duty of care as an organiser of an activity
As the organiser of the roof repairs with supervisory power and control, the principal contractor had a duty to use reasonable care in organising the roof repairs to avoid unnecessary risk of injury or minimise the risk of injury to those who would be engaged in the activity. The dogman was a person engaged in the roof repairs and therefore, the principal contractor owed him a duty of care.
The Court found that the principal contractor had breached this duty of care because:
- the risk of a person engaged in the roof repairs falling through one of the damaged skylights was reasonably foreseeable;
- the injuries that a person may sustain if they fell through one of the skylights were not insignificant; and
- there were obvious and inexpensive precautions that could have taken to minimise the risk (e.g. fixing boarding over the skylights or fixing mesh under the skylights) and a reasonable person in the principal contractor’s shoes would have taken those precautions.
- Occupier’s duty of care
The Court found that the principal contractor was the “occupier” of the premises on which the incident occurred and so owed an occupier’s duty of care. This duty of care was to ensure that those entering the premises didn’t suffer injury as a result of the state of the premises, including dangers such as the damaged skylights.
Clearly, the dogman did suffer injuries as a result of the state of the premises, namely the condition of the skylights including that they had not been boarded over or meshed. The occupier’s duty of care was therefore breached.
The Court apportioned 40% of liability for the dogman’s injuries to the principal contractor and 60% to the crane hire company.
What can your business learn from this decision?
Businesses that organise activities have a duty to avoid unnecessary risk of injury or minimise the risk of injury to persons who engage in those activities. This applies even if the business has no physical presence or involvement in the activities when they are undertaken. The duty also extends to subcontractors and their employees.
Principal contractors are reminded that where a danger is identified on a worksite, all subcontractors must be informed of the danger. Principal contractors cannot rely on unrelated subcontractors to assume the responsibility of informing each other of the danger.
“Former business development manager ordered to deliver up electronic devices for examination”
Georges Apparel Pty Ltd v Giardina  NSWSC 290
An employer discovered that before resigning, a former employee copied its confidential information and set up a competing business during her employment.
The NSW Supreme Court ordered the employee to deliver up her electronic devices for independent examination.
Georges Apparel Pty Ltd (the Employer) had a business in the manufacture, importation and sale of school uniforms. Ms Claudia Giardina (the Employee) was employed in the position of Business Development Manager.
The Employee provided notice of her resignation. The Employer alleged that the Employee indicated that she was going to establish her own business that was also going to sell school uniforms and accordingly would be in competition with the Employer’s business.
The Employee’s written contract of employment had clauses which:
- Required the Employee not to misuse or disclose the Employer’s confidential information during or post-employment; and
- Prevented the employee for a period (six months or three months) within NSW to compete with the Employer’s business, canvass or solicit the Employer’s customers, induce the Employer’s customers or suppliers or induce other employees from leaving their employment with the Employer.
The Employer sought to negotiate the post-employment restrictions and provided the Employee with a post-employment obligations agreement (the Agreement) which contained similar terms to the employment contract but within the wider area of Australia. Importantly, it did not contain a non-competition clause.
The Employer later discovered that during the course of her employment, the Employee had started to set up the competing business. The Employer also claimed that she had copied the Employer’s confidential information, in particular, a computer program for the embroidery of a school logo on pieces of apparel.
The Employer applied to the NSW Supreme Court to restraint the employee from engaging in a competing business and for the delivery up of computer devices for examination. The Employer argued that had it known the Employee’s conduct, it would not have agreed to lesser post-employment restrictions.
In support of its application, the Employer submitted that the non-compete order was necessary to protect the business from the Employee using its confidential information. While the Employee was prepared to comply with orders not to disclose or use the Employer’s confidential information or business information, she submitted that her and her family would suffer financial detriment if she was required to deliver up the electronic devices as this meant she could not work.
The Court was satisfied that there was a serious question to be tried as to whether the Employee took and kept the Employer’s confidential information.
In determining whether to make the non-compete order as sought by the Employer, the Court considered whether such an order was necessary or whether the delivery up and examination of the computer devices would be sufficient and effective to protect the Employer’s interests.
After balancing the interests of the parties, the Court held that it was necessary for the Employee to deliver up her electronic devices for expeditious examination for any confidential information they contain. The Court was satisfied that the examination of the electronic devices together with the enforcement of the obligations in the Agreement protected the Employer whilst minimising harm to the Employee.
What can your business learn from this decision?
For key positions, it is important that post-employment restraints and obligations relating to the use and disclosure of confidential information are drafted into employment contracts.
Before a restraint is enforced or injunction is ordered, the court will consider whether it is reasonable and does not go beyond what is necessary to protect the legitimate business interests of the employer.
Where an employer is concerned that a departing or former employee has breached their post-employment restrictions or copied, used or misused confidential information, it is necessary that employers act quickly in seeking legal advice and take the necessary steps to enforce the restraint, particularly if court proceedings become necessary.
“ABCC releases new guidance for compliance with the national construction code”
In our blog New Deadline for Building Code Compliance we discussed the requirement for employers to ensure that their enterprise agreements complied with the 2016 Building Code (2016 Code) by 31 August 2017 especially if they were seeking to undertake Commonwealth funded building and construction work.
In March 2017 the Australian Building Construction Commission released new guidelines (the Guidelines) that require companies to negotiate enterprise agreements to remove the fixed annual calendar of rostered days off.
Clauses that restrict working hours and are not compliant with the 2016 Code include:
- Capping the maximum number of hours worked on site by any employee at 58 hours a week, comprising no more than 10 hours per day Monday to Friday and 8 hours on a Saturday, with the ability to do some critical work by agreement; and
- Requiring written agreement for work outside of these times such as Sundays, early starts and night work;
The clauses do not comply because they limit the employer’s ability to determine when employees can perform work to meet operational requirements.
The Guidelines also specify other non compliant clauses including those that:
- Expand union officials right to access to the workplace;
- Specify a ratio of one apprentice to every eight tradesperson;
- Provide a right for casuals to convert to permanent work; and
- Place controls and checks on foreign visa workers and temporary foreign workers.
Employers are reminded that failure to comply with the 2016 Code could cost employers significantly in lost tenders. Accordingly, employers in the building and construction industry should begin their enterprise agreement review process as soon as possible.
“NERR changes have now commenced”
In our March 2017 Employment Law E-update we advised that changes were being made to the Notice of Employee Representational Rights (NERR).
These changes have now come into effect. Employers must use the new NERR. This can be found on the Fair Work Commission website. Employers are reminded to always print off the latest version of the NERR and not use a NERR that may be on file.
“Full Federal Court decision confirms meetings or discussions could be held in multipurpose area”
Central Queensland Services Pty Ltd v Construction, Forestry, Mining and Energy Union  FCAFC 43
The Full Court of the Federal Court dismissed an application which sought declarations that the area behind the cab of the dragline did not satisfy the requirements of the Fair Work Act 2009 (Cth) (FW Act) and could not be used by a permit holder to conduct an interview or hold discussions with members.
In our April 2016 Employment Law E-update we reported on the Full Bench of the Fair Work Commission’s (the Commission) decision regarding the interpretation of section 492(3) of the FW Act.
A dispute arose between the Construction, Forestry, Mining and Energy Union (CFMEU) and Central Queensland Services Pty Ltd T/A BHP Billiton Mitsubishi Alliance (BMA) regarding the default location of the room or area which the CFMEU permit holder could hold discussions with members.
Subsection 492 of the FW Act provided that where there was no agreement on the room or area in which the permit holder could conduct an interview or hold discussions, then:
(3) The permit holder may conduct the interview or hold the discussions in any room or area:
- in which one or more of the persons who may be interviewed or participate in the discussions ordinarily take meal or other breaks; and
- that is provided by the occupier for the purpose of taking meal or other breaks.
The CFMEU sought to use the location behind the cab which was actually used for multiple purposes, including taking meal or other breaks. The area contained a workstation on one side and a small kitchenette on the other side. BMA argued that a separate mobile crib facility was provided to employees to take lunch breaks and that this was to be the location for interviews or discussions.
The Full Bench was satisfied that section 492(3)(b) of the FW Act did not require the default room or area to be for the sole purpose or use of taking meal or other breaks and held that the permit holder could conduct an interview or hold discussions in the cab area.
BMA lodged an application with the Full Court of the Federal Court seeking declarations regarding the interpretation of subsection 492(3) of the FW Act and the location behind the cab.
BMA submitted that the Full Bench misconstrued and misapplied subsection 492(3) of the FW Act. Specifically it argued that the grammatical and ordinary sense of “the purpose” provided that the room or area must be provided solely for the use of meal or other breaks and could not be for multiple purposes. It also argued that the sole use purpose was consistent with the objects of the right of entry provisions of the FW Act which included that permit holders could not interfere with the performance of work on premises.
The CFMEU maintained that the construction and the ordinary and grammatical meaning of the clause did not require that the room or area was to be used solely for meal or other breaks and that this interpretation was supported by the Explanatory Memorandum.
The Full Court of the Federal Court held that there was nothing in the construction of subsection 492(3)(b) of the FW Act that required that the room or area was to be for the single or sole use of taking meal or other breaks. In Justice Jessop’s view, the word “provided” referred to a room or area made available for the use or purpose for meal or other breaks.
The Full Court disagreed with BMA’s argument that the default location was to be determined by the subjective intention of the occupier and held that the purpose in providing a room or area had to be assessed objectively. The Full Court also rejected BMA’s argument that one of the objects of the right of entry provisions of the FW Act was to prevent the interference of permit holders with the performance of work, finding there was nothing in the FW Act which indicated this.
Accordingly, BMA’s application was dismissed.
“Deed of release with former employee withstands unlawful discrimination challenge”
O’Hanlon v Williams & Ors  FCCA 381
A former school teacher attempted to have a Deed of Release set aside on the basis that it was entered into as the result of discrimination against her by her former employer.
The Federal Circuit Court of Australia found that the teacher did not have reasonable prospects of successfully making out the discrimination as alleged and dismissed the proceedings.
Ms Wendy O’Hanlon (the Applicant) was employed as a teacher at an independent girls’ school in Sydney. In 2007, the Applicant was involved in an undisclosed incident, prompting the school’s Council to commence an investigation. Following the investigation, the Council informed the Applicant that it had lost confidence in her judgement and held the preliminary view that her employment should be terminated. Before reaching a final decision, the Council afforded the Applicant an opportunity to provide further information or responses in relation to the incident and the investigation.
At the time of the investigation and after its conclusion, the Applicant was issued with a number of letters and met with the school’s principal and other of the school’s representatives about the incident and the investigation.
The Applicant claimed that when issued with the letters, and during the meetings, she experienced a range of symptoms that would have put the principal and the school’s representatives on notice that she was suffering from some kind of psychological condition. The Applicant claimed her symptoms included rapid heartbeat, clammy hands, panic and poor concentration.
Following receipt of the Council’s preliminary view that her employment should be terminated, the Applicant instructed her legal representative to propose settlement with the Council including that she be allowed to “retire” and that the parties enter into a Deed of Release (Deed).
The Council’s legal representative drafted the Deed which was presented to the Applicant for review at her legal representative’s office. The Applicant claimed that when presented with the Deed to read, her vision became blurred, she experienced heart palpitations, had erratic and fragmented thought processes and could not understand the legal language of the document. Without having read the entire Deed, the Applicant signed it and left the office crying.
Several years later in 2015, the Applicant applied to the Federal Circuit Court of Australia for orders that she had been unlawfully discriminated against by the members of the Council (the Respondents) because she suffered from a disability in the form of a psychological illness.
Amongst other things, the Applicant argued that the Respondent had unlawfully discriminated against her by:
- Dismissing her from her employment; and
- Requiring her to sign the Deed;
at a time when she was suffering from a disability.
The Applicant argued that the Deed was entered into as a result of unlawful discrimination against her and it should therefore be set aside.
The Respondents opposed the Applicant’s claims and argued that the Deed should not be set aside because they did not unlawfully discriminate against the Applicant and her claims in this regard had no reasonable prospects of success.
The Court examined the medical and other evidence presented by the parties and determined that there were no reasonable prospects of the Applicant establishing the unlawful discrimination set out above.
On the basis that there were no reasonable prospects of establishing unlawful discrimination, the Court did not exercise its discretion to set aside the deed of release.
In reaching its decision, the Court reasoned that:
- The Applicant had instructed her legal representative to propose the Deed including a term that she “retire” rather than be dismissed. Therefore, the Applicant was not dismissed from her employment as alleged, but resigned.
- It could not reasonably be argued that the Respondents required the teacher to sign the Deed. The Applicant was the party who proposed the Deed and its terms, and was provided with an opportunity to review and seek independent legal advice about the document before signing it.
- The Applicant did not provide evidence about her state of mind at the time she instructed her legal representative to propose the Deed, which was a critical point in her decision making about the Deed and its terms.
Ultimately, the teacher failed to satisfy the Court that the Respondents engaged in the discriminatory conduct as alleged. The Court dismissed the application and ordered that she pay the Respondent’s costs.
What can your business learn from this decision?
It is important that a well drafted Deed of Release is executed following a proper process, that should include allowing the parties time to consider and seek independent legal advice.
This decision is also a good reminder for employers to consider the mental state of employees to whom they propose a Deed of Release. Employers should never place employees under pressure to enter into a Deed of Release and if employers have doubt about the circumstances surrounding settlement negotiations and/or execution of a Deed of Release, they should seek legal advice.
Unfair Dismissal/Adverse Action
“Mentally ill employee not a victim of adverse action because he failed to be contactable during absence”
Laviano v Fair Work Ombudsman  FCCA 197
- The employer did not take adverse action when an employee’s employment was terminated for failing to be contactable during a period of personal leave and not attending medical assessments as directed by the employer.
- The decision reaffirms that employers do have the right to actively manage employees who are incapacitated for work.
Mr Laviano (the Applicant) was employed by the Fair Work Ombudsman (FWO). Throughout 2014, he was absent from work as the result of his psychological illness and was required to attend medical examinations and assessments between 22 July 2014 and 27 November 2014.
The Applicant did not attend any of these except on one occasion where he arrived late and the assessment was unable to proceed. The purpose of these assessments was to understand the Applicant’s medical condition and to assist in his return to work.
The Applicant alleged he did not attend any of the assessments because he did not open any mail from the FWO informing him of the need to attend. The Applicant argued he did not open any mail because his psychologist had told him not to either open daily mail or contact his employer.
The FWO was not aware that Applicant had received medical advice not to open daily mail. The Applicant had taken no steps directly or through a third party between October 2014 and December 2014 to notify the FWO that he would not be opening mail or communicating with them or the reason/s why.
On 9 January 2015 the FWO terminated the Applicant’s employment due to non-performance of a duty, in particular, his failure to attend a medical appointment scheduled for 27 November 2014.
The termination of employment letter also said that between 7 October 2013 and 22 December 2014 the Applicant did not communicate with the FWO nor did he tell them he would not be communicating with them.
The Applicant lodged a General Protections claim alleging he was dismissed because he suffered a disability and because he was discriminated against for exercising his workplace right to take periods of personal leave due to his disability.
The FWO argued that the dismissal was because the Applicant was unable to perform his duties.
The Federal Circuit Court of Australia found that the FWO had not discriminated against the Applicant and therefore, the FWO had not terminated his employment for a prohibited reason.
The Court did not accept that the Applicant’s disability stopped him from communicating with the FWO or prevented him from attending the assessment. The Court noted that the repeated failure to attend the assessments made it impossible for the FWO to manage the work health and safety aspects of the employment.
The Court described the Applicant as a man who, “is no more a victim of indirect discrimination than is a man who puts his hands over his ears so he cannot hear oral instructions, or a man who closes his eyes so that he cannot read written instructions.”
Accordingly, the Court found that adverse action was not taken against the Applicant because he exercised his workplace right to take leave. The Court found that the Applicant failed to attend his scheduled medical appointment and had unreasonably shut down all communication between himself and the FWO.
What can your business learn from this decision?
During an employee’s absence, an employer can contact an employee when they are absent from work due to an illness or inquiry to enquire about their progress and likely return to work. The employee cannot ignore the correspondence from their employer and must communicate with their employer.
If an employee has been advised not to open any correspondence or contact the employer by a medical professional, the employee must ask the medical professional or a third party to communicate this to their employer on their behalf.
Need a laugh…
Q. What did one mountain say to the other?
A. Meet you in the valley!
Q. How do mountains see?
A. They peak.
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