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injury and the reasonable management action defence

In cases of workers compensation involving psychological injury, employers may rely on the “reasonable management action” defence to dispute liability for injury.

In cases of workers compensation involving psychological injury, employers may rely on the “reasonable management action” defence to dispute liability for injury.

In Muliana v Nestle Australia Ltd [2023] NSWPIC 315, the Personal Injury Commission of NSW (the Commission) was required to consider whether a worker’s injury was the result of the employer’s reasonable action under section 11A of the Workers Compensation Act 1987 (NSW) (the WC Act (NSW)).

The Commission heard that in or around October 2022, the worker was involved in an altercation with a truck driver involving a forklift. The worker claimed that the driver had accused him of almost reversing the forklift into him which culminated in the driver then threatening to throw a fire extinguisher in his face.

The Team Leader investigated the incident during the same shift which involved first obtaining a statement from the driver who alleged that the altercation resulted in the worker becoming aggressive and driving the forklift over his foot. He then reviewed the CCTV footage of the incident with the driver present and concluded that the driver’s version of events seemed more likely.

The Team Leader communicated his findings to the worker who disagreed with the driver’s version of events. The worker requested to view the CCTV footage of the incident himself, however the Team Leader refused.

A few days later, the Team Leader obtained a statement from the worker with respect to the incident. The worker signed the statement despite voicing that he felt “unheard and unsupported” and that he was not given the opportunity to complete his full version of events.

The worker was subsequently certified unfit for duties and claimed workers compensation for a psychological injury sustained as a result of the incident and subsequent conduct of management.

The employer ultimately denied that the worker had suffered a work-related psychological injury. In the alternative, it relied on the reasonable action defence under section 11A of WC Act (NSW).

The Commission ultimately accepted the evidence produced by the worker’s treating doctors and psychologists which confirmed that he had sustained a psychological injury as a result of being verbally threatened and assaulted at work, which was further destabilised by his experience of being unsupported by the employer.

The Commission then turned to the defence under section 11A of the WC Act (NSW), which in this case, required consideration as to whether the psychological injury was “wholly or predominately” caused by the employer’s reasonable action with respect to discipline.

The Commission ultimately found that the psychological injury was not “wholly or predominately” caused by the employer’s reasonable management action, stating that the injury was caused by the worker’s exchange with the driver and the Team Leader’s lack of management support that followed.

The Commission also determined that the employer’s actions with respect to discipline were not reasonable. It found that while it was reasonable for the employer to conduct an investigation into the incident, the Team Leader pre-judged what had occurred and therefore failed to engage in a disciplinary process that was fair.

In coming to this view, the Commission had regard to the Team Leader:

  • opting to view the CCTV footage of the incident with the driver rather than on his own or with another officer of the employer;
  • refusing to view the CCTV footage with the worker when requested; and
  • preferring the driver’s version of events before making any further enquiries, especially in circumstances where the Team Leader conceded before the Commission that it was impossible to ascertain from the CCTV footage if the forklift actually impacted the driver.

Therefore, the Commission rejected the employer’s reasonable action defence finding that the actions of the Team Leader added additional stress on the worker and contributed to his psychological injury.

The Commission accepted that the worker had no current work capacity and awarded him workers’ compensation and payments for reasonably necessary medical expenses.

Lessons for employers

Employers must satisfy a high threshold when relying on the “reasonable management action” defence as it applies in each State or Territory.

In particular, employers must be able to demonstrate that the psychological injury of the worker was the result of reasonable management action taken - this includes reasonable management action the worker is the subject of, or party to.

As seen in this decision, the Team Leader commenced the disciplinary process with a view based only on the driver’s version of events and without making any further enquiries with the worker. This rendered the action taken by the employer to be unreasonable, causing its “reasonable action” defence to fail.

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

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