The High Court has allowed an appeal against a decision of the Full Federal Court on worker’s compensation for the aggravation of a mental condition as a result of reasonable administrative action. After the applicant was bullied and harassed by her supervisor and later denied a permanent position under a different supervisor by a panel that included her current and prospective supervisor, she was diagnosed with an ‘adjustment disorder’ that rendered her unfit for work. Sections 5A and 5B of the Safety, Rehabilitation and Compensation Act 1988 (Cth) provide that an injury does not include a disease suffered as a result of reasonable administrative action, which includes ‘anything reasonable done in connection with the employee’s failure to obtain a promotion …’, and disease includes the aggravation to a significant degree of an ailment suffered by an employee. The FCAFC, by majority, held that the AATA erred in holding that the employee’s disorder was ‘a result of’ the promotion decision: the Tribunal was required to apply a ‘common sense’ approach to causation, and failed to do so in assessing the facts (see at [30]ff).

The High Court (French CJ, Bell, Gageler, Keane and Nettle JJ) unanimously allowed Comcare’s appeal against the FCAFC. The Court noted that the critical finding of the AATA was that returning to her substantive position was a ‘direct and foreseeable consequence’ of the decision in the respondent’s mind, and that the deterioration of her mental condition was triggered by the contemplation of what she perceived to be a consequence of the decision (at [39]). The FCAFC had no basis for questioning that finding (see at [40]). Turning to the central issue of whether the Tribunal was correct in law in concluding that the deterioration of the respondent’s mental condition triggered by her contemplation of a perceived consequence of the decision was indeed a disease she suffered as a result of that decision, within the meaning of s 5A(1), the Court held that within the context of the statute, the phrase ‘as a result of’ in s 5A(1) was naturally read to refer to the relevant causation test in s 5B(1) (at [41], [43]). The FCAFC majority’s preference for the ‘common sense’ notion of causation ‘did not adequately interrogate the statutory text, context and purpose’: at [42]. The Court noted, at [44], that:

to have suffered a disease falling within s 5A(1)(a), the employee must have suffered an ailment or aggravation of an ailment that was contributed to, to a significant degree, by the employee’s employment. In excluding from the definition of an injury compensable under the Act a disease that is suffered by an employee “as a result of” reasonable administrative action taken in a reasonable manner in respect of the employee’s employment, s 5A(1) is naturally read as referring to the contribution made to the suffering of the disease by an event in the course of the employee’s employment which answers that description of reasonable administrative action.

That administrative action must be a cause in fact of the disease suffered, though it need not be the sole cause: ‘What necessary is that the taking of the administrative action is an event without which the employee’s ailment or aggravation would not have been a disease: it would not have been contributed to, to a significant degree, by the employee’s employment. ‘: at [45]. The causal connection leading to the exclusion from the definition of injury is made out if the disease suffered is a mental condition or aggravation of a mental condition brought on by a failure  to obtain promotion, including a reaction to a perceived consequence of the failure to obtain promotion: the nature of that perceived consequence ‘whether personal or professional, direct or indirect, real or imagined’ is beside the point (at [48]). Consequently, the Tribunal was correct in law on its findings of fact, and the Court made orders effectively restoring those made in the Federal Court at first instance to dismiss the appeal against the Tribunal’s decision.