FEDERAL COURT OF AUSTRALIA

Comcare v Drinkwater [2018] FCAFC 62

ORDERS

THE COURT ORDERS THAT:

1.    The appeal is allowed.

2.    The decision of the Administrative Appeals Tribunal (the AAT) made on 8 August 2017 is set aside.

3.    In place of the decision of the AAT, the reviewable decision made by Comcare dated 22 March 2016 is affirmed.

4.    By consent, the applicant is to pay the respondent’s costs of the appeal as agreed or taxed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1    This is an appeal by Comcare under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) from a decision of the Administrative Appeals Tribunal (the Tribunal). The Tribunal decided to set aside the reviewable decision made by Comcare on 22 March 2016, denying Mr Glenn Drinkwater compensation and decided instead that Comcare was liable to compensate him in respect of an injury under s 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act). Mr Drinkwater’s injury was described as “Adjustment disorder with anxiety suffered by him in April 2015”. The Tribunal’s decision has the citation [2017] AATA 1228.

2    The questions of law that arise on the appeal concern the construction and application of the exclusion contained in the definition of “injury” in s 5A of the SRC Act. Whether or not there is an “injury” as defined in s 5A is a threshold issue for the application of the SRC Act: see Canute v Comcare [2006] HCA 47; 226 CLR 535 at [8].

background

3    The background facts are set out in the Tribunal’s reasons for decision: see [2017] AATA 1228 at [8]-[29]. Some are set out below.

4    Mr Drinkwater was for many years employed as a Customs Officer, Level 1, performing duties (including in shifts) in the Client Services Work Area located inside the International Terminal at Sydney Airport. His employment was at all times subject to the Public Service Act 1999 (Cth) (PS Act), and he was an “APS employee” for the purposes of the PS Act. Section 25 of the PS Act provided that “[a]n Agency Head may from time to time determine the duties of an APS employee in the Agency, and the place or places at which the duties are to be performed”.

5    At the time he commenced his employment as a Customs Officer, Mr Drinkwater was informed that there was a “regular mobility process” pursuant to which employees would be moved around various areas of the relevant Department (the mobility policy). The power to do so lay in s 25 of the PS Act: see [4] above. As it happened, the mobility policy was not implemented for some years and did not affect him until 2013.

6    In mid-2013, following allegations of corruption (not involving Mr Drinkwater), the Department reinstated the mobility policy. Under the policy, particular staff members were selected for consideration for reassignment of duties.

7    The mobility policy was set out in a document in evidence before the Tribunal. In order to understand the parties’ competing arguments, it is necessary to refer briefly to the terms of that document. By way of introduction, the policy document stated:

Mobility is Agency driven with business delivery the primary objective of mobility. Customs and Border Protection does however recognise the importance of working collaboratively with employees, and as such, will take an employee’s personal circumstances and preferences into consideration when making mobility decisions.

8    The mobility policy in terms obliged the Department to discuss with the employee a proposed decision to move him or her. The policy also obliged the Department to take account of an employee’s personal circumstances and preferences in making any mobility decision. This was made clear in numerous parts of the policy document, including at pp 3-4, where it was said:

Though mobility initiated by the Agency will be undertaken in consultation with an employee, an employee can be moved without their consent under section 25 – Assignment of Duties of the Public Service Act 1999. The identification of the requirement to move will occur in consultation with an employee ... as appropriate depending on business requirements and/or an employee’s individual circumstances

…

Whilst every effort will be made to accommodate an employee’s preferences and personal circumstances, there is no guarantee that employees will be selected to move or that an employee will be moved to their nominated preference/s.

9    The mobility policy contained numerous ‘mobility principles’, which reinforced the need for Departmental consultation and discussion with an employee. For example, principle 6 stated that “where the Agency initiates movement of an employee through mobility, an employee is to be consulted before a final decision is made”. There was also provision for a grievance review by a review committee “[w]here an employee has discussed, received and reviewed feedback as it relates to a mobility decision and wishes to further request a review”.

10    It was not ultimately in dispute that the process and procedures required by the mobility policy had been applied to Mr Drinkwater. Rather, his complaint was that the Department had not had proper regard to his personal circumstances.

11    In 2013, Mr Drinkwater was selected as being “in scope” for the implementation of the mobility policy. This was because of his length of service and some other factors (including the available roles, the experience and skills required, and the expressed preferences). In June 2013, Mr Drinkwater was informed that he was part of the mobility program and that he should submit a form stating his five preferred areas for transfer. This was in conformity with the mobility policy.

12    In October 2014, the Department identified a proposed new position for Mr Drinkwater in International Mail. He had recorded this as his first preference on the form submitted to the Department by him. In order to be transferred to this position, however, Mr Drinkwater was required to undertake psychometric/aptitude testing. Unfortunately for him, he did not pass the testing and, for this reason, it was concluded that he was unsuitable for the International Mail position. The outcome was that Mr Drinkwater remained in his position in the Aviation Traveller Division.

13    In February 2015, Mr Drinkwater was again identified by the Department for consideration for transfer pursuant to the mobility policy. Once again, he nominated International Mail as his first preference. He nominated “Aviation – Goods” as his second preference, “Maritime Division” as his third and fourth preferences, and “National Border and Targeting Centre” as his fifth preference. He relied on various personal circumstances in support of his first preference or staying in the Aviation Traveller Division.

14    On 4 April 2015, Mr Drinkwater met with a Departmental manager and was advised that he had been selected for transfer to a position in Client Services at the Customs House in Sydney (outside the International Airport Terminal). Mr Drinkwater did not want to be transferred to that position. Mr Drinkwater’s case before the Tribunal was that his medical condition developed in response to the proposal to transfer him to Client Services. It was not in dispute that Mr Drinkwater suffered the onset of an adjustment disorder within a matter of days after the meeting on 4 April 2015.

15    In the following months, Mr Drinkwater discussed the proposed transfer with his supervisors and managers on a number of occasions. He attended various meetings with Departmental officers, including a meeting with his Regional Commander and Airport Manager. At these meetings, he made representations about his personal circumstances and raised issues about the proposed transfer. He reiterated his wish to transfer to International Mail and expressed his unhappiness about not being transferred to one of his preferred areas. He also submitted a grievance, which was rejected.

16    On 31 October 2015, Mr Drinkwater received an email confirming that he was being transferred to the Client Services position at the Customs House. His medical condition deteriorated over a number of days afterwards, and he became incapacitated for work from 9 November 2015 to 16 February 2016. Comcare did not dispute before the Tribunal that during this period Mr Drinkwater suffered from an adjustment disorder with anxiety and that his employment by the Department made a significant contribution to his condition.

17    On 18 November 2015, Mr Drinkwater lodged a claim for compensation. In a determination dated 22 January 2016, Comcare denied liability to pay compensation under s 14 of the SRC Act on the basis that Mr Drinkwater’s psychological condition was a result of “reasonable administrative action taken in a reasonable manner in respect of [Mr Drinkwater’s] employment”, and was therefore excluded from being an “injury” by virtue of the exclusion in s 5A(l) of the SRC Act.

18    On 22 March 2016, Comcare made a reviewable decision affirming the determination of 22 January 2016. Amongst other things, the review delegate stated:

As a result of the imminent mobility movement you submitted a special circumstances request which involved remaining in a role which contained shift work allowing you to be flexible in order to meet your personal requirements, however this was rejected. You were told that you would be rotated to a role with no shift work. This meant your working hours would be more rigid and you would suffer a ‘massive pay cut’.

I am satisfied that as part of an ‘operational’ action by your employer you were to be reassigned to a new position. Although there were other factors that contributed to your condition, including your inability to secure a desired position due to expiration of qualifications, I consider that your failure to retain your preferred shift work arrangement, which impacted on your ability to earn, has contributed at least in part to your condition.

I am satisfied that it was open to your employer to initiate the mobility process to meet its operational needs. Your employer took reasonable steps to try and accommodate your placement preferences, unfortunately your preferred placements required mandatory certification which you did not have and therefore an alternative position was identified which unfortunately caused financial implications given it was a non-shift role.

There is no evidence before me to suggest that the mobility process was not followed appropriately.

On this basis, I consider that your inability to retain a benefit, (benefit lost as a result of the rotation), falls squarely within the non-exhaustive list which is taken to be reasonable administrative action. Therefore your circumstances fall within the exclusionary provision in s 5A(2)(f) being a failure to retain a benefit, which is taken to be reasonable administrative action.

Relevant legislation

19    To understand the questions of law concerning the exclusion in the definition of “injury” in s 5A of the SRC Act to which this case gives rise, it is necessary to refer briefly to the relevant statutory provisions.

20    Comcare’s liability to pay compensation to Mr Drinkwater arises, if at all, under s 14(1) of the SRC Act, which provides:

Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment.

21    “Injury” is defined specifically in s 5A of the SRC Act as follows:

(1)    In this Act:

injury means:

(a)    a disease suffered by an employee; or

(b)    an injury (other than a disease) suffered by an employee, that is a physical or mental injury arising out of, or in the course of, the employee’s employment; or

(c)    an aggravation of a physical or mental injury (other than a disease) suffered by an employee (whether or not that injury arose out of, or in the course of, the employee’s employment), that is an aggravation that arose out of, or in the course of, that employment;

but does not include a disease, injury or aggravation suffered as a result of reasonable administrative action taken in a reasonable manner in respect of the employee’s employment.

(2)    For the purposes of subsection (1) and without limiting that subsection, reasonable administrative action is taken to include the following:

(a)    a reasonable appraisal of the employee’s performance;

(b)    a reasonable counselling action (whether formal or informal) taken in respect     of the employee’s employment;

(c)    a reasonable suspension action in respect of the employee’s employment;

(d)    a reasonable disciplinary action (whether formal or informal) taken in respect of the employee’s employment;

(e)    anything reasonable done in connection with an action mentioned in paragraph (a), (b), (c) or (d);

(f)    anything reasonable done in connection with the employee’s failure to obtain a promotion, reclassification, transfer or benefit, or to retain a benefit, in connection with his or her employment.

The added underlining in s 5A(1) above is referred to in these reasons as the exclusion in s 5A(1). This form of exclusionary provision was introduced by the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2006 (Cth), with effect from 13 April 2007.

22    Regarding the definition of “disease” it is sufficient for present purposes to note only s 5B(1) of the SRC Act, which reads as follows:

In this Act:

disease means:

(a)    an ailment suffered by an employee; or

(b)    an aggravation of such an ailment;

that was contributed to, to a significant degree, by the employee’s employment by the Commonwealth or a licensee.

An “ailment” is defined in s 4(1) to mean “any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development)”.

the tribunal’s decision

23    The Tribunal declined to apply the exclusion in s 5A(1) of the SRC Act to the actions upon which Comcare specifically relied. The Tribunal set out Comcare’s argument in its reasons (at [35]-[36]) as follows:

Comcare argues that Mr Drinkwater’s Adjustment Disorder was suffered as a result of the following actions by the Agency and that each was “reasonable administrative action taken in a reasonable manner in respect of [Mr Drinkwater's] employment”:

1.    That the Department elected to redeploy the Applicant to a new role, pursuant to provisions under which the Department is entitled to invoke, at its election and direction, compulsory mobility processes for employees after three continuous years in a given role;

2.    That the Department found the Applicant unsuitable for certain roles, based on factors such as the expiration of his qualification for x-ray technology on 19 July 2012, and steps taken to assess his suitability, such as the aptitude test for the role of International Mail Image Analyst in December 2014;

3.    That the Department maintained that the Applicant’s redeployment to Client Services was suitable, despite grievances lodged by the Applicant on 12 April 2015 and to the Workplace Relations team;

4.    That the Department redeployed the Applicant to Aviation Goods on 31 October 2016, pursuant to the most recent postings and deployment model applicable; and

5.    Anything reasonable done in connection with the Applicant's failure to obtain his preferred role or transfer, or to obtain or to retain a benefit, in connection with his employment.

Although Comcare has referred to several discrete actions, they are all part of the employer’s action in implementing its mobility process. In a situation such as this it is inappropriate to endeavour to consider each of the specified actions separately as each is inter-related to the others. The specified actions are in fact part of the continuum of action designed to move Mr Drinkwater from one position to another within the organisation.

24    The critical part of the Tribunal’s decision was its determination that although the application by the Department of its mobility policy to Mr Drinkwater’s employment involved the taking of “administrative action” within the meaning of the exclusion in s 5A(1), such action could not be said to be “taken … in respect of the employee’s employment” (italics added). The Tribunal’s analysis and conclusion turned on its understanding of the reasons of the Full Court of this Court in Commonwealth Bank of Australia v Reeve [2012] FCAFC 21; 199 FCR 463 (CBA v Reeve).

25    In purporting to apply CBA v Reeve the Tribunal reasoned (at [39] and [42]) that:

The actions relied upon by Comcare were taken as part of the implementation of the employer’s policy to redeploy those employees who had been employed in the same positions for more than three years. They were not actions directed specifically to Mr Drinkwater; the policy was in place when he was initially employed. By way of contrast, had action been taken to redeploy Mr Drinkwater because of inadequate performance, for example, then that action would properly have been described as administrative action “in respect of” his employment.

...

Mr Drinkwater was affected by the employer’s action because it was an ordinary feature of his work, albeit one which had not been implemented for some years. Whilst he was directly and significantly affected by the action it was not directed specifically to him. Rather, he was affected by the implementation of a policy which was applicable to all employees who had been employed in the same positions for more than three years.

26    On this basis, the Tribunal found that the injury suffered by Mr Drinkwater was not the result of administrative action taken in respect of Mr Drinkwater’s employment and the exclusion was not therefore engaged in his case. This finding was sufficient to support a decision favourable to Mr Drinkwater.

27    The Tribunal also went on to find, however, that the implementation of the mobility policy was “reasonable” administrative action and that the administrative action was taken in a “reasonable manner”: see [2017] AATA 1228 at [47] and [56]. In this Court, Mr Drinkwater did not contend that these findings were in error.

28    As already noted, Comcare did not dispute before the Tribunal that, from 9 November 2015 to 16 February 2016, Mr Drinkwater suffered from an adjustment disorder with anxiety and that his employment by the Department made a significant contribution to his condition. The Tribunal’s causality findings were not in dispute before this Court.

the appeal under section 44 of the AAT Act

29    Section 44(1) of the AAT Act provides that a party to a proceeding before the Tribunal may appeal to this Court on a question of law from a decision of the Tribunal. As we have seen, Comcare appealed to this Court under s 44. An appeal under this provision is brought in the original jurisdiction of the Court. In this case, that jurisdiction is being exercised by a Full Court pursuant to s 44(3) of the AAT Act.

30    Comcare raised two questions of law on its appeal. First, did the Tribunal misconstrue the phrase “in respect of the employee’s employment” in the exclusion in s 5A(1) of the SRC Act; and, secondly, did the Tribunal fail to take into account a relevant consideration, namely, the operation of s 5A(2)(f)?

the parties’ submissions

Submissions for Comcare

31    Comcare’s primary argument was that the Tribunal’s construction and application of the exclusion in s 5A(1) was erroneous and that, on a proper application of the decisions of the Full Court of this Court in CBA v Reeve and Drenth v Comcare [2012] FCAFC 86; 128 ALD 1 (Drenth v Comcare), the exclusion was engaged in Mr Drinkwater’s case. Comcare was not, therefore, liable to pay compensation to Mr Drinkwater. Comcare further submitted that the decisions of Tracey J in Peters v Comcare [2013] FCA 1361; 137 ALD 375 (Peters v Comcare) and Long v Comcare [2016] FCA 737 (Long v Comcare) confirmed its understanding of CBA v Reeve and Drenth v Comcare. It contended, in the alternative, that if CBA v Reeve supported the Tribunal’s decision, then it should not be followed.

32    Comcare contended in written submissions that a decision about the need for transfers to implement a mobility policy may be in the nature of an operational decision that lies outside the exclusion, but a decision to transfer a particular employee (here, the respondent) is “a decision specific to him, made after consideration of particular matters raised by him”. It was said that there was nothing in the legislative history, context, and the purpose of s 5A that supported a contrary interpretation. At the hearing, senior counsel for Comcare emphasised that the Department had engaged with Mr Drinkwater in relation to the subjective considerations that he had agitated and that were specific to him and his circumstances, and that these considerations were taken into account in implementing the mobility policy with respect to him. It was noted that the respondent had not contended that, as a matter of law, the mobility decision was defective because it had involved “the inflexible application of a policy and/or because of any failure to have regard to the subjective circumstances of the respondent”. Senior counsel for Comcare submitted that, in taking into account those subjective circumstances, as it was obliged to do as a matter of law, the Department was taking administrative action in respect of the respondent’s employment.

33    While senior counsel for Comcare acknowledged that difficult questions can arise concerning the boundary between administrative and non-administrative action, there was no difficulty, so he submitted, in correctly characterising Comcare’s action as administrative action, having regard to the facts of the case.

34    Comcare submitted that the Tribunal incorrectly construed the exclusion in s 5A(1) to mean action of an administrative kind that not only relates specifically to the employee, but also exclusively to the employee. Comcare submitted that there was nothing in the text, purpose or context of s 5A to indicate that, in order to come within the exclusion, administrative action “must not be taken under, or in the context of, an employer’s workplace policies”. Comcare contended that the Tribunal’s approach ignored the reality that must have been known to the Parliament when it enacted s 5A, “that matters of administration of the employment relationship of Commonwealth employees are notoriously embedded in published policies”.

35    Comcare submitted that the words “in respect of” in the exclusion were words of wide import and that they should not be read down in the absence of some compelling reason. It said there was no such reason. Comcare submitted that the Tribunal erred at [40] of its reasons for decision in relying on the examples in s 5A(2) to support its approach.

36    Comcare also submitted that “the Tribunal’s failure to give s 5A(2)(f) any attention whatsoever involved error”. In support, it stated that “[t]he operation of s 5A(2)(f), and the reasoning in Hart [v Comcare [2005] FCAFC 16; 145 FCR 29], cannot as a matter of law, be avoided by lumping separate administrative actions together under the rubric of ‘implementation’ of the employer’s mobility process”.

Submissions for Mr Drinkwater

37    For Mr Drinkwater, it was submitted that the Tribunal made findings of fact consistent with CBA v Reeve and construed and applied s 5A(1) in accordance with that case. It was submitted that the decision to move Mr Drinkwater from his existing role was not done with respect to his employment but with respect to the duties he was to perform; and that, according to CBA v Reeve, the latter was not covered by the exclusion. In Mr Drinkwater’s written submissions, it was submitted that the Tribunal correctly applied CBA v Reeve because:

The reason that Mr Drinkwater was required to move to a new position in Client Services at Customs House was not the result of “administrative action” taken “in respect of the employee’s employment”. It was the result of implementation of a policy which affected Mr Drinkwater in the same way as it affected others subject to the operation of the same policy.

38    It was submitted that administrative action can be characterised as being made in respect of a person’s employment only when that action alters the structure of the relationship between the employer and the employee. It was said by senior counsel for Mr Drinkwater that there was no such alteration by administrative action here, because the mobility policy applicable to all the Department’s employees had always been part of the employment structure within which Mr Drinkwater worked. Senior counsel submitted that there was therefore no administrative action in respect of Mr Drinkwater’s employment, and that the decision to move Mr Drinkwater to the Client Services position at the Customs House was merely an operational decision in which he was sent to another place to do other duties.

39    For Mr Drinkwater, it was submitted that this Court should follow CBA v Reeve either because the decision was correct or because it was not clearly wrong. It was also submitted that the Full Court in CBA v Reeve had understood that the construction of the words “employment” and “administrative” in s 5A(1) was “the critical issue”, as reflected in the legislative history of s 5A. It was further submitted that Drenth v Comcare involved no departure from CBA v Reeve and that the subsequent cases of Peters v Comcare and Long v Comcare were applications of CBA v Reeve.

40    Senior counsel for Mr Drinkwater submitted that the expression “administrative action” “cannot encompass every action taken by a person exercising what might be broadly called administrative or managerial powers that have some connection with employment”. If it did, then the words “in respect of the employee’s employment” would have no work to do; and the expression would not be limited to action directed at an individual employee, but would cover all matters of general policy that impacted adversely on some individual employees. It was further submitted that there was no indication in the extrinsic materials that the Parliament had sought to widen the exclusion to such an extent when this form of exclusionary provision was introduced in 2007.

41    Referring to written submissions, senior counsel for Mr Drinkwater sought to illustrate his argument by the following example. He invited the Court to suppose that action was “taken by a Australian Public Service manager to meet work deadlines imposed by the priorities of Government, by implementing greater work output demands and shorter deadlines ... on workers under his or her control” and that while this action was “reasonable when viewed objectively across the whole of the workforce in the relevant branch or section under the manager’s control”, it had “the unintended effect, in the case of a particular employee, of causing ... anxiety and depression resulting in a diagnosable psychological disorder, with resultant incapacity and a need for treatment”. Senior counsel submitted that there was no indication that the amendments to the SRC Act in 2007 were intended to exclude such an injury from compensation, but that this would be the effect of a literal reading of the exclusion in s 5A(1). In the same vein, in written submissions, it was said that nothing in the extrinsic material “expresses any intention that psychological claims in general should be regarded as a thing of the past”.

42    It was also contended for Mr Drinkwater that s 5A(2)(f) could not assist Comcare because it was not “a stand-alone provision”; and that, “applying the construction adopted in [CBA v Reeve], it would be necessary for there to be specific action taken in respect of Mr Drinkwater’s employment for the exclusion to apply”. In written submissions, it was said that the evidence did not disclose such specific action because:

The move to Customs House did not change Mr Drinkwater’s status as an employee – he remained in the same position with the same title and the same rank. It was his duties (or “posting”) that changed, along with others affected by the mobility policy ... The change in duties incidentally had the effect of reducing his income because the new duties did not involve shiftwork, but that was not the result of action taken specifically in respect of the “employment” of Mr Drinkwater.

43    At the hearing, senior counsel for Mr Drinkwater submitted that “benefit” in the phrase “failure … to retain a benefit” in s 5A(2)(f) meant some kind of action that can be awarded or removed by administrative action taken in respect of an individual employee’s employment independent of promotion, reclassification or transfer. Some examples were, so he said, “a discrete monetary allowance for some kind of travel, food or clothing, the availability of flexible working hours, the use of a personal vehicle, a corporate credit card, a mobile phone account, an office as opposed to an open plan workstation”. Senior counsel submitted that s 5A(2)(f) was not therefore engaged in this case.

consideration

44    As we have said, this appeal turns on the proper construction and application of the exclusion in s 5A(1) of the SRC Act.

45    It may be accepted that the task of statutory construction begins and ends with considering the text of the provision to be construed; and that the search for textual meaning may involve a consideration of the purpose and context of the provision: see Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) [2009] HCA 41; 239 CLR 27 at [47]; Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [69]; Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; 250 CLR 503 at [39]; Thiess v Collector of Customs [2014] HCA 12; 250 CLR 664 at [22]-[23]; North Australian Aboriginal Justice Agency Ltd v Northern Territory [2015] HCA 41; 256 CLR 569 at [11]; Military Rehabilitation and Compensation Commission v May [2016] HCA 19; 257 CLR 468 at [10]; and, most recently, Australian Securities and Investments Commission v Whitebox Trading Pty Ltd [2017] FCAFC 100; 251 FCR 448 at [25]-[26].

46    The disagreement in this case primarily concerned the words “suffered as a result of ... administrative action ... in respect of the employee's employment” in the exclusion in s 5A(1). As noted earlier, this form of exclusionary provision was introduced by the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2006 (Cth): see [21] above. Before then, the equivalent exclusion was expressed in different terms, although the substantive definition of “injury” (then in s 4 of the SRC Act) was the same. The legislative history, including the Explanatory Memorandum to the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006 (Cth) (Explanatory Memorandum), was considered in detail by the Full Court in CBA v Reeve at [6]-[9] (Gray J) and [70]-[74] (Rares and Tracey JJ). There is little to be gained from repeating their Honours’ accounts.

47    It is clear enough that the legislative history is important for two reasons. First, the legislative history elucidates the purpose of s 5A. After examining the legislative history, Rares and Tracey JJ said, in CBA v Reeve at [73], that:

[T]he purpose of s 5A was to broaden the exclusion of matters from the previous definition of “injury” so that an employer would not be unduly inhibited in taking reasonable administrative action in respect of an employee’s employment. The Parliament sought to ensure that an employer would be freer to deal with an employee, by taking disciplinary action or deciding to deal with that employee as an individual in respect of his or her employment, than had been the case under what it considered were narrow judicial interpretations of the old exclusion in s 4(1).

This indicates that the illustration given in argument by senior counsel for Mr Drinkwater may not withstand analysis: see [41] above.

48    Secondly, as indicated at [53] below, reference to the Explanatory Memorandum can assist to a limited extent in defining the scope of the term “administrative action” in the exclusion in s 5A(1).

49    Bearing in mind the careful consideration of the legislative history and the scope of s 5A in CBA v Reeve, we have found that that case and the subsequent case of Drenth v Comcare provide appropriate guidance to enable us to determine this appeal under s 44 of the AAT Act. We apply those decisions in concluding that the appeal should be allowed. It is to those two cases that we now turn.

50    A question arose in CBA v Reeve as to whether the Commonwealth Bank of Australia was liable to pay compensation under s 14(1) of the SRC Act in respect of Mr Reeve’s depressive disorder. Mr Reeve had developed a depressive disorder while working as a manager of a branch of the Bank. The circumstances that contributed to Mr Reeve’s condition included organisational and staffing changes, the humiliation of frequent telephone calls with colleagues in which he was required to report poor branch results, an unsupportive visit from his manager and the anxiety of reporting poor customer satisfaction survey results. It was not disputed that Mr Reeve’s depressive illness was a “disease” as defined in s 5B and that, unless it was the result of administrative action within the exclusion in s 5A(1), it was an “injury” in respect of which the Bank was liable to pay compensation under s 14(1).

51    The Full Court held that the exclusion in s 5A(1) of the SRC Act applied to specific action taken in respect of an individual’s employment, such as disciplinary action. The exclusion did not apply to action forming part of the everyday tasks and duties of that employment, and, in consequence, ordinary routine work, and changes to routine and directions to perform work, were not “reasonable administrative action taken in respect of the employee’s employment”: see CBA v Reeve at [33], [60]. The Full Court held that the events that contributed to Mr Reeve’s condition were part of his ordinary work duties as an employee; the exclusion did not therefore apply; and he was not disentitled to compensation under the SRC Act: see CBA v Reeve at [34], [61], [64].

52    In construing the expression “administrative action”, Gray J drew a distinction between “administrative action” and “operational action”. Action was “operational”, in his Honour’s view, if it was action relating to “the activities or business of the institution or enterprise in which the employee is employed”: see CBA v Reeve at [31] and, to similar effect, Rares and Tracey JJ at [52]. Gray J concluded (at [33]) that:

In the case of s 5A(1) of the SRC Act, the requisite effect is given if the provision is seen to apply to action taken in respect of the administration of the relationship of employer and employee as between the particular employee making the claim, in his or her capacity as employee, and the employer in its capacity as employer … As the Tribunal pointed out correctly, matters of general administration, management and the implementation of policy are excluded, even if they affect the employment of employees. It is what is done with respect to the employment relationship that the particular employee has with the employer that is excluded from the definition of “injury”, unless the action taken was not reasonable, or was not reasonably taken.

53    In a similar fashion, Rares and Tracey JJ stated (at [74]) that:

[T]he Explanatory Memorandum did not suggest that “administrative action” was intended to cover the way in which the employee was to perform the employment itself or what were his or her duties or tasks in doing so. It is one thing to contemplate disciplining an employee or taking steps under his or her contract of employment, and quite another to define or delimit or supervise the employment, job or task entrusted to the employee for him or her to perform or to give directions to him or her as to how and when he or she is to perform it. The former is comprehended by the expression “administrative action” in s 5A(1); the latter deals with the way in which the employee carries out the employment for which he or she was engaged. The latter is not “administrative action”.

54    Rares and Tracey JJ also emphasised the importance of the words “in respect of the employee’s employment” in describing the administrative action within the exclusion, which they said “suggests that the action referred to in the exclusion was intended to refer to action directed specifically to the employee as opposed to it affecting him or her because it was an ordinary feature of his or her work, workplace or environment or otherwise connected to his or her employment”: see CBA v Reeve at [57]. Their Honours said (at [60]) that:

The qualification in the final phase of the exclusion in s 5A(1) is important. It requires that the action be taken “in respect of the employee’s employment”. That qualification distinguishes the criterion of the exclusion in s 5A(1) from an action or circumstance that the Act uses to impose liability, namely an action or circumstance that arises out of, or in the course of, the employee’s employment. This suggests that the Parliament intended that the exclusory action be specific administrative action directed to the person’s employment itself, as opposed to action forming part of the everyday duties or tasks that the employee performed in his or her employment or job.

(Emphasis in original).

55    In the same paragraph, Rares and Tracey JJ went on to observe, in a passage relied on by both parties in this proceeding, that:

The action must be “in respect of” something that exists — the person’s employment. That is, the action must be something different to the duties and incidents of that employment or, as s 5B(2)(b), provided “the nature of, and particular tasks involved in, the employment”. Rather, the administrative action in the exclusion must take the employment as a factum and operate in respect of whatever its duties, incidents, nature and tasks may be. Thus, “employment”, as used in s 5A, is concerned with the conditions in which the employee works, the terms of his or her engagement and his or her duties: cf John Holland Group Pty Ltd v Robertson (2010) 185 FCR 566 at [72]-[73] per Dowsett J, with whom Spender J agreed. ...

56    Their Honours added (at [69]) that:

The intention that we have discerned from the Parliament’s use in s 5A(1) of “in respect of” is to provide a relational context for the administrative action taken and the employee’s employment. It is to require that the action be specific to the employee’s work or job so that the exclusion can operate harmoniously with the preceding portion of s 5A(1) rather than as eviscerative of it: see too Parker v President, Industrial Court of Queensland [2010] 1 Qd R 255 at [41], and see too [42], [44] per Keane JA with whom Fraser JA and White J agreed.

57    CBA v Reeve was applied without any lengthy discussion by the Full Court (Rares, McKerracher and Murphy JJ) in Drenth v Comcare.

58    Ms Drenth worked for the Australian Taxation Office (ATO), although she suffered from a psychiatric illness that she had had most of her life. In late November 2007 the ATO became aware that she was experiencing significant psychological stress and that she had been recently hospitalised following an overdose of medication. She started working reduced hours. A new return to work plan was prepared for her in January 2008. The ATO received medical advice, in a letter of 29 January 2008, that Ms Drenth was able to work 4 hours a day and that, if she was coping well, that could be increased to 5 hours a day.

59    About the same time, however, the ATO received contrary medical advice from a consulting psychiatrist, who had been engaged by the ATO. This psychiatrist produced a report dated 19 January 2008, which was received by the ATO on 29 January 2008, expressing the opinion that Ms Drenth was incapable of working 3.5 hours per day, 5 days a week. On 30 January 2008, the ATO wrote to Ms Drenth advising her that, as a consequence of receiving that opinion, it had decided that she was not to return to work as from 31 January 2008. Ms Drenth was very distressed and claimed compensation from the ATO for the aggravation of an existing disease suffered by her as a result of subsequent actions by the ATO. The Tribunal found that a number of the stressors or aggravating factors on which Ms Drenth relied had aggravated her existing. It also found that the decision made by the ATO on 30 January 2008 had had the same effect. The Tribunal made its decision before CBA v Reeve was delivered.

60    Before the Full Court, Comcare argued only that the decision of 30 January 2008 was an administrative action within the exclusion in s 5A(1) of the SRC Act. Ms Drenth submitted to the contrary that it was not administrative action because it did not amount to disciplinary, counselling or appraisal action or other forms of administrative action referred to in s 5A(2). She also contended that the decision did not concern the specific nature of her employment and that it was not a determination or action under the PS Act or regulations: see Drenth v Comcare at [20]. The Full Court dismissed Ms Drenth’s submissions, noting, first, that, as CBA v Reeve had decided, the action referred to in the exclusion in s 5A(1) was not qualified by the non-exhaustive list of examples of “reasonable administrative action” in s 5A(2): see Drenth v Comcare at [21]. Their Honours held that, in the circumstances as found, “the 30 January decision was clearly administrative action within the meaning of s 5A ... because it was directed squarely towards, and taken in respect of, her employment”: see Drenth v Comcare at [23]. At [22], the Full Court applied CBA v Reeve directly, stating:

[A] decision that an employer is not prepared to allow an employee to return to work because of a medical opinion that the employee is then not fit and to require the employee to provide further evidence that he or she is fit, is quintessentially an action that is directed specifically to the employee. Such a decision does not affect him or her because it is some feature of his or her workplace or environment or is otherwise connected to the employee’s employment. Rather, it is a decision about the employment relationship itself. Here, the 30 January decision took Ms Drenth’s employment as a factum and it operated in respect of whatever the duties, incidents, nature and tasks of her employment might have been: Reeve at [57]-[65], [74].

61    CBA v Reeve has been applied on other occasions, including by Tracey J in Peters v Comcare and Long v Comcare.

62    In Peters v Comcare, Tracey J dismissed an appeal under s 44 of the AAT Act on the basis that it raised no question of law. In the course of his Honour’s reasons, however, it was noted that counsel for Ms Peters had emphasised the distinction between “administrative” action and “operational” decisions mentioned in CBA v Reeve. The events said to give rise to Ms Peters’ injury “included the management of Ms Peters’ return to work following her injury at home; a decision not to place her on the on-call roster and a refusal by her employer temporarily to transfer her to the World Trade Centre”: see Peters v Comcare at [29]. Noting that the Tribunal was aware of the distinction to which Gray J had referred in CBA v Reeve, Tracey J concluded (at [31]) that “[t]he relevant events related to the administration of Ms Peters’ employment as an employee and her relationship with her employer” and that this meant that the exclusion in s 5A(1) applied.

63    In Long v Comcare, Tracey J dismissed an appeal under s 44 of the AAT Act on the basis that it was open to the Tribunal to conclude in the circumstances of the case that the exclusion in s 5A(1) was engaged. Ms Long was an employee of Medicare Australia. In May 2009, she was subjected to a quality assurance procedure, involving random checks on the accuracy of her work. In June 2009, she suffered an injury at work in the nature of anxiety and depression. She left work and did not return due to her injury. She lodged a claim for compensation for psychiatric injury, which Comcare rejected. The Tribunal affirmed Comcare’s decision, holding that Ms Long’s injury was excluded from the definition of “injury” by reason of the exclusion in s 5A(1).

64    The issue before Tracey J was whether the imposition on Ms Long of the “informal 100% QA process” was “administrative action” within the meaning of s 5A of the SRC Act. Tracey J held that it was open to the Tribunal to conclude that “the QA process which applied to Ms Long, when looked at as a whole, constituted “administrative action” within the meaning of s 5A(1) whether read with s 5A(2)(a) or not” see Long v Comcare at [30]. The Tribunal had found that:

... Medicare applied two quality checking procedures: QA and QC. If random QC assessments over a period revealed an error rate below the acceptable level the employee “would be taken off the formal daily QC process and QA would be performed on all transactions until they had reached the standard required.” It was such a regime which was applied to Ms Long in May 2009 and which was found to be a significant cause of the onset of her psychiatric condition. The Tribunal (at [34]) acknowledged that the distinction between operational and administrative actions could involve fine distinctions but it was persuaded that the “informal 100% QA process” had been “specifically designed for Ms Long and particular to her” and was, as a result, “administrative action”. Although Medicare could have invoked the formal process which may have led to the creation of a performance improvement plan, it had not done so for compassionate reasons. The action was nonetheless administrative in nature. It found (at [35]) that the imposition of the QA process regime on Ms Long occurred in the course of the administration of her employment as an employee of Medicare and her relationship with her employer.

See Long v Comcare at [26].

65    Tracey J observed (at [24]) that both the separate reasons of Gray J and his own and Rares J’s joint reasons in CBA v Reeve:

... established that “administrative action”, within the meaning of s 5A, must be employee-specific. It must entail more than the regulation of the normal incidences of a person’s employment. Such action may or may not involve the application or implementation of some particular policy. The “formality” or otherwise of a particular action on the part of the employer is not necessarily a determinative factor.

66    In upholding the Tribunal’s decision, Tracey J contrasted the circumstances in which Mr Reeve suffered his injury with those affecting Ms Long. His Honour remarked (at [28]-[30]) that:

Unlike Ms Long, Mr Reeve developed a depressive illness in the course of performing his normal duties. He was required to attend meetings and participate in telephone conferences with other managerial employees. More senior managers visited his branch, as they did other branches from time to time. Mr Reeve’s illness arose out of what took place in the course of these interactions which occurred in the course of his normal routine.

Ms Long, on the other hand, was identified, in the course of routine QC checks, to be performing at a sub optimal standard. At that point she was subject to the “informal 100% QA process”. This meant that all of her work was checked and was to continue being checked until she met the required standard. ... Medicare could have, but did not, issue Ms Long with a formal notice that the quality of her work did not meet the required standard. ... The fact that Medicare chose to adopt a less formal remedial procedure, ... should not deflect attention from the critical question, namely, whether Medicare took action which was directed specifically to Ms  Long. This it did. Under her contract of employment Ms Long was required to perform her duties at a particular standard. When she did not do so all her work was checked and feedback was provided to her in order to assist her to perform at the required level. ... It was this extraordinary, person-specific, regime which gave rise to the psychiatric impairment for which Ms Long sought compensation. ...

Part of the informal QA process involved an on-going appraisal of the quality of Ms Long’s work: see s 5A(2)(a) of the Act and Reeve at [63]. There is no mutual exclusivity between the undertaking of an appraisal and its object – the protection of the integrity of the organ donor register. On the evidence it was open to the Tribunal to conclude, as it did, that the QA process which applied to Ms Long, when looked at as a whole, constituted “administrative action” within the meaning of s 5A(1) whether read with s 5A(2)(a) or not.

67    CBA v Reeve indicated that the boundary between administrative action and non-administrative action may on occasion be difficult to draw. As Drenth v Comcare, Long v Comcare and Peters v Comcare illustrate, however, this difficulty does not arise in every case. In our opinion, the difficulty does not arise here and it is unnecessary and inappropriate in this case to explore where the boundary might lie. Again, as the cases discussed above show, whether or not there is administrative action within the meaning of s 5A(1) of the SRC Act depends to a significant extent on the particular circumstances in which the action is taken.

68    The present case is not like CBA v Reeve, where the actions that led to Mr Reeve’s illness were part of his ordinary work duties. In contrast to Mr Reeve, Mr Drinkwater’s illness did not develop in response to performing his normal duties as a Customs Officer in the Client Services Work Area at Sydney Airport.

69    Contrary to the submissions for Mr Drinkwater, the present case is not properly characterised as a case about the duties Mr Drinkwater performed for his employer. These submissions involved a misreading of CBA v Reeve. When Rares and Tracey JJ referred to an employee’s duties in CBA v Reeve at [74], they drew a distinction between disciplinary action or steps under an employee’s employment contract on the one hand and, on the other hand, defining or supervising the employee’s job or directing him or her how to perform it. The latter action was not, as their Honours said, administrative action within the exclusion in s 5A(1). Rather, this kind of action fell within what Gray J referred to as “operational” action. The present case is not about Departmental directions as to how Mr Drinkwater was to do his job in his then position or about his duties in that job; and it did not, for this reason, involve operational action falling outside the exclusion.

70    In the present case, the relevant action was about transferring Mr Drinkwater to a different post or position from that which he then held in his employer’s employ: see Tribunal’s reasons at [36]. This was administrative action taken with respect to Mr Drinkwater under s 25 of the PS Act: see further Director-General of Education v Suttling (1987) 162 CLR 427 at 437-438 (Brennan J, with whom Mason ACJ and Deane J agreed). It was action that took Mr Drinkwater’s employment “as a factum”, to use the language of Rares and Tracey JJ in CBA v Reeve at [60]. Although discussing a different provision of the SRC Act, Dowsett J, with whom Spender J agreed, reasoned in a similar way in John Holland Group Pty Ltd v Robertson [2010] FCAFC 88; 185 FCR 566 at [72]-[73]. This action was plainly taken “in respect of” Mr Drinkwater’s employment because it was action directed specifically to his employment and taken in respect of his employment. A determination by the employer that the employee will move from his or her existing post to a new post in the employer’s employ involves administrative action specifically directed to that employee and specifically about that employee.

71    In the present case, the fact that this administrative action was “in respect of” Mr Drinkwater’s employment was highlighted by the decision-making processes leading up to it: see [2017] AATA 1228 at [12]-[20], [22]-[27]. The fact that these processes were pursued because they were a part of the mobility policy does not alter the fact that they were expressly designed to enable consideration to be given to Mr Drinkwater’s personal circumstances and his personal preferences concerning his work areas. Mr Drinkwater did not contend to the contrary.

72    A major difficulty with the argument advanced for Mr Drinkwater was that it failed to take account of the fact that the factual matrix described by the Tribunal disclosed more than one administrative action. When the Department determined to reinstate the mobility policy in 2013, it made an administrative decision about the implementation of the mobility policy. This decision did not constitute administrative action within the exclusion in s 5A(1), including because it was not action “in respect of” any particular employee’s employment. This was not, however, the administrative action that was relevant to Mr Drinkwater’s compensation claim. As we have seen, Mr Drinkwater’s case was that his disorder developed in response to the action to transfer him from his post at Sydney Airport to a different post in the Customs House. The action to transfer him from his existing post to a new post was therefore the administrative action relevant to his claim for compensation: see [2017] AATA 1228 at [21], [26], [28]-[29] and [36]. The earlier Departmental decision to implement the mobility policy was not the relevant action because it did not give rise to the disorder for which he sought compensation.

73    Furthermore, the fact that the decision to transfer Mr Drinkwater from his post at Sydney Airport to a different one in the Customs House would not have been made but for the Department’s decision to implement the mobility policy does not alter the fact that the administrative action to transfer him was made in respect of his employment. In the context of employment governed by the PS Act, it will frequently be the case that administrative action taken in respect of a particular employee’s employment will be taken under, or in furtherance of, a policy that the employer has determined is applicable to all or some of the employees in its employ.

74    In our opinion, the Tribunal erred in its construction and application of the exclusion in s 5A(1) of the SRC Act and in particular the phrase “in respect of the employee’s employment”, because it misunderstood what was said by the Full Court in CBA v Reeve. Contrary to the Tribunal’s understanding, CBA v Reeve did not decide that an action was not “administrative action” within the meaning of the exclusion simply because it was taken in implementation of, or in conformity with, an applicable policy.

75    For the reasons stated, we conclude that the exclusion in s 5A(1) was clearly engaged in Mr Drinkwater’s case. It must be accepted that, by reason of the exclusion, Comcare is not liable to pay compensation to Mr Drinkwater for the disorder suffered by him in April 2015.

76    In this circumstance, nothing turns on s 5A(2)(f) of the SRC Act. The list of examples of “reasonable administrative action” in s 5A(2) is in terms non-exhaustive and does not qualify the meaning of that expression where it appears in s 5A(1). The reference in s 5A(2)(f) to “anything reasonable done in connection with the employee’s failure ... to retain a benefit, in connection with his or her employment” cannot constrain the ordinary and natural meaning of “reasonable administrative action” in s 5A(1), although it can remove doubt about the width of that expression: see CBA v Reeve at [26] (Gray J) and [62] (Rares and Tracey JJ); and Drenth v Comcare at [21]. It is therefore unnecessary to consider the second question raised by Comcare – whether the Tribunal failed to take into account a relevant consideration, being the operation of s 5A(2)(f) of the SRC Act.

77    We note that the parties disagreed about whether Comcare had made submissions to the Tribunal about the application of s 5A(2)(f). For Mr Drinkwater, it was said that Comcare had done no more than repeat s 5A of the SRC Act in its statement of issues, facts and contentions and that Comcare had made no submissions before the Tribunal “as to what [s 5A(2)(f)] meant and how it ought to be applied on the facts of the case”. It was submitted that Comcare had not raised the issue properly or at all before the Tribunal, in order for it to raise this second question about s 5A(2)(f). This was disputed by Comcare.

78    We also note that the issue about Comcare’s entitlement to raise this second question was not raised in Mr Drinkwater’s written submissions filed pursuant to court order before the hearing of the appeal. Rather, it seems that the issue was first raised on his behalf with Comcare in a letter from his solicitors dated 6 March 2018, some two days before the hearing of the appeal. This was very late, as Comcare submitted. The delay was not explained.

79    The Tribunal would, it seems, have been aware of the relevance of s 5A(2)(f) of the SRC Act, bearing in mind that the review delegate relied on this provision in reaching the decision subject to the Tribunal’s review (see [17] above) and that the Tribunal indirectly referred to the provision when it set out Comcare’s argument in its reasons (see [23] above). Section 5A(2)(f) was also the subject of correspondence between the parties’ solicitors several days before the Tribunal hearing on 10 April 2017. There was, however, no express reference to s 5A(2)(f) in the submissions made by Comcare to the Tribunal at the hearing. Nor was there any such reference in its earlier statement of issues, facts and contentions filed before the hearing. The extent to which Comcare ultimately relied on s 5A(2)(f) before the Tribunal was therefore unclear. This may account for the absence of any reference to the provision in the Tribunal’s reasons and the parties’ current disagreement. It is unnecessary, however, to resolve the disagreement, having regard to the conclusion we have already reached that nothing turns in this case on s 5A(2)(f) of the SRC Act and it is unnecessary to deal with Comcare’s second question concerning that provision.

disposition

80    For the reasons stated, Comcare has succeeded in showing that the Tribunal misconstrued the phrase “in respect of the employee’s employment” in the exclusion in s 5A(1) of the SRC Act and that, contrary to the decision of the Tribunal, by reason of that provision it is not liable to pay compensation to Mr Drinkwater for the “Adjustment disorder with anxiety suffered by him in April 2015”. The decision of the Tribunal should be set aside and Comcare’s reviewable decision dated 22 March 2016 should be affirmed.

81    Comcare has agreed to pay Mr Drinkwater’s party/party costs of the proceeding, irrespective of the outcome (save for the costs associated with Mr Drinkwater’s belated objection to the second of Comcare’s questions on the appeal.) Comcare did not, however, seek to recover any costs associated with that objection. We would order that, by consent, the applicant pay the respondent’s costs of the appeal as agreed or taxed.

Associate:

Dated:    26 April 2018