We analyse the fallout from a recent stress injury ruling.

Banks continue to announce big staff layoffs, with some commentators including the head of the Finance Sector Union, Leon Carter, predicting large job losses over the next 18 months. At the same time, Telstra and Australia Post continue to shed workers more quietly but in large numbers. And if Tony Abbott gets in, numbers in the Commonwealth public service are likely to be slashed.

In oue experience, management doesn’t reach those retrenchment targets without a fair bit of pushing, shoving and even “psychological warfare”.

Which is why workers can expect a big increase in on-the-job bullying and intimidation over the next couple of years.

But a recent case in which the Administrative Appeals Tribunal overruled Telstra’s decision not to pay compensation to an ex-employee for stress and psychological injury shows that it is possible to resist intimidation.

In the matter of Sami -v- Telstra [2012] AATA 41, Mr Sami was successful in wining his compensation claim against Telstra for work-related psychological injuries and in particular in relation to bullying and harassment by his manager over a period of time.

The case shows that more psychologically injured and stressed workers within big organizations covered by Comcare can successfully pursue their employers for compensation for stress-related injuries. The ruling underlines that management’s often-used tactics of subtle bulling and harassment to push people out the door has a human cost which the law is prepared to recognise.

For workers, especially within banks, telcos and other companies who have to live with the threat of losing their jobs, the case should encourage them to stand up to workplace harassment and, if victimized, seek legal advice and compensation.

Stress injuries – how the break was applied

To understand this case, we need a little background.

The incidence of workplace injury caused by stress has been growing steadily for 10 years or more. As the rate rose, so too did the amount of money being paid out in compensation to injured workers. Little surprise then when in 2006, the Howard Government decided to pull some legislative teeth by tightening the “exclusionary previsions” which are used by companies like NAB and Telstra to wriggle out of injury claims. (These provisions are part of the Safety Rehabilitation and Compensation Act or SRCA.)

While the details are a little more complex, essentially, companies could avoid paying out a compo claim if the psychological stress caused to the worker was a result of “reasonable disciplinary conduct”. This was enough to have the claim “excluded” or in other words, rejected. The presumption was of course that the stress suffered by the worker was in some way an unreasonable reaction because the discipline was reasonably taken.

Other exclusionary provisions refer to a worker becoming stressed because of a failure to obtain a benefit (such as redundancy) so that even if the workers became stressed because of the way they were hounded out of a workplace, the exclusionary provisions are used to deny them compensation for any trauma caused by their ill usage.

Widening the basis on which companies could have such cases thrown out, the Howard Government added a further exclusionary provision being “reasonable administrative action”. So now all management had to do was demonstrate that a long list of typical management actions, each being “reasonable”, may have contributed to the injury.

The final bolt on the compensation door was fixed by the Federal Court (albeit prior to 2006) in Comcare -v- Hart [2004] FCA 1144, when it found that if only one of the exclusionary factors contributed to the injury then a claim should fail. As most stress-related injuries are caused by multiple factors, it became almost impossible for workers to prove that “reasonable” administrative actions had never contributed to their illnesses or were not significant or materially contributing factors.

So, for example, if you become stressed in your workplace because your supervisor has been bullying you but in addition to this, you complain of your work hours being changed, or perhaps that you have been given extra work, your claim would fail if it was to be found that the change in hours or the extra work were “reasonable administrative actions”. This is because the law states that a claim will fail even if only one of the “exclusionary” factors significantly or materially (depending on date of injury) contributed to your injury.

Since the changes, employers licensed under the Comcare scheme such as Telstra, Optus, Australia Post, CBA, NAB, Linfox and others, have successfully relied on these extended exclusionary provisions to reject claims for stress-related injuries.

Which brings us to Mr Sami’s case, fought and won just this year. In arguing his case, lawyers Ryan Carlisle Thomas maintained that while “reasonable administrative action” may have been taken by Telstra in managing Mr Sami, the manner in which they behaved was not justifiable.

There were a number of actions identified by the Tribunal as having contributed to Mr Sami’s injury. These include issues over leave entitlements, reward certification and requests for a new uniform. In addition, Mr Sami had been twice made redundant by his manger. On the first occasion, Telstra itself found on appeal from Mr Sami that the process had been flawed. On the second occasion, the manager was successful in having Mr Sami made redundant. The Tribunal found that ultimately these had all been reasonable administrative actions. However, the fact that these actions had been carried out in an “unreasonable” manner meant that Telstra was ordered to pay Mr Sami compensation.

What does this mean for workers covered under the Comcare scheme?

While there is no doubt that successfully claiming compensation for a stress-related injury has become much harder under the Comcare scheme in the last few years, it is important that workers are aware the decisions can be successfully challenged and that advice should be sought if stress is being experienced in the workplace.

It is important that incidents are reported, that medical advice is sought at an early stage and that union and legal advice is sought. Comcare also has an investigative role to play and reports can be lodged with Comcare regarding bullying at work. It might also be appropriate in the case of severe bullying to report to the police.

In this connection, it is ironic that at a time when Victoria has introduced legislation (Crimes Amendment Bullying Act 2011) making it a criminal offence in some circumstances to “bully” a work colleague, Federal employers are attempting to use exclusionary provisions in the compensation legislation to seek to protect themselves from claims from the very workers that they have injured.