The Supreme Court dismissed an employer's appeal following an unsuccessful s81A hearing, confirming the need for clear evidence which addresses all aspects of a dispute.

The Background

Medwin (the worker) was employed by Toll Holdings Limited (the employer) and made a claim for workers’ compensation for a psychological injury resulting from alleged workplace abuse and discrimination.

The employer disputed liability for the claim pursuant to s81A of the Workers Rehabilitation and Compensation Act 1988 (the Act); denying that abuse and discrimination occurred, alleging the cause was instead non-work factors or a reasonable performance management process.

The Workers’ Rehabilitation and Compensation Tribunal found in favour of the worker.

The employer applied to the Tribunal to vary or revoke this decision pursuant to s62(2) of the Act, which provides jurisdiction for the Tribunal to reconsider its determinations.

The Tribunal was not prepared to reconsider its decision because the employer had alleged an error of law was made by the Tribunal, and the Supreme Court was best equipped to respond to that. Also, the employer had already filed an appeal with the Supreme Court which was yet to be determined.

The Supreme Court heard and ultimately dismissed the appeal.

The Tribunal’s Determination

Under s81A of the Act the employer must prove that it is reasonably arguable, based on the employer’s evidence, that the worker would be unsuccessful in proving his claim at a final hearing.

The Tribunal determined that the employer did not have a reasonably arguable case here because the evidence was not inconsistent with liability falling with the employer.

On causation, the worker told the employer’s expert psychiatrist that he was subjected to months of bullying and harassment in the workplace. However the last straw event occurred on 7 October when he claims to have been verbally abused and had his belongings damaged. The expert ultimately concluded that the worker’s condition was due to the incidents on 7 October.

The expert was aware, from a review of medical records, that there were non-work stressors in the worker’s life which would impact the worker’s psychological state, however he could not state to what extent they contributed to causation because the worker was unwilling to discuss the non-work issues.

The employer relied upon this information to argue that the worker’s employment had not been the cause of the injury (ground 1). The Tribunal dismissed this argument on the basis that the evidence from the expert was insufficient to suggest that non-work factors could be said to be causative of the injury. And whilst the worker had likely provided an unreliable history to the expert (by not disclosing the presence of non-work stressors), the Tribunal appeared to suggest that it could not make findings of fact about that at the s81A stage.

The employer’s supervisor and colleague gave statements denying that the worker had been subjected to months of harassment and abuse. The supervisor confirmed he had performance managed the worker at times regarding the worker’s failure to adhere to safety requirements.

The employer relied upon this information to suggest that the worker’s history of months of bullying was in fact months of performance management, and that this was the cause of the injury. The Tribunal accepted that if that was the case then the employer was excused from liability on the basis that it was undertaking reasonable administrative action or counselling under s25(1A) of the Act (grounds 2 and 3).

Despite this, the Tribunal determined that the employer did not have a reasonably arguable case.

The Tribunal noted that the evidence of the expert was that the cause of the worker’s condition was abuse that occurred on 7 October (and not the months of abuse before then).

The employer did not provide enough evidence for the Tribunal to be satisfied that it would be able to disprove the events of 7 October. The worker’s colleague who gave evidence confirmed indirectly calling the worker a ‘fuckwit’ on 7 October. That same witness denied damaging the worker’s belongings. However the evidence from the worker’s supervisor did not dispute that the worker’s belongings had been damaged. The supervisor stated that he was unaware of the worker suffering abuse on 7 October however did not deny that abuse had occurred.

The Tribunal concluded “Although the employer is successful with respect to grounds 2 and 3, ground 1 of the reference fails as the employer has not discharged the onus of proof which it bears”

This comment on its face suggests that an employer must be successful on all grounds relied upon to dispute liability under s81A.

The Decision on Appeal

The employer argued that the Tribunal’s conclusion (in italics above) that the employer was successful with respect to grounds 2 and 3 (reasonable administrative action) should have resulted in it being excused from liability.

The Court dismissed this on the basis that the Tribunal’s decision, when read in full beyond the sentence in italics above, was that for the employer to be successful on relying upon the reasonable administrative action defence the employer must prove two elements:

  • That the worker’s condition resulted from the months of bullying
  • That the bullying referred to was in fact reasonable action taken by the employer to performance manage regarding safety issues.

Whilst the employer’s evidence proved the second element it did not prove the first. Instead the expert evidence was that the worker’s condition resulted from single incidents on 7 October. This was not clear when reading the concluding sentence of the Tribunal in italics above, but the Court considered it was clear when reading the judgment in full, which is why grounds 2 and 3 of the employer’s initial application failed.

The employer also argued that the Tribunal should have determined that at a final hearing the worker might not be able to prove that the incidents at work on 7 October were the cause of his condition. In other words, the Tribunal might determine that non-work factors were the cause, or even the performance management process.

However, the Court dismissed this on the basis that the employer’s own undisputed expert evidence was that it was the incident on 7 October which caused the condition. The Court noted that the employer did not seek to undermine the expert opinion, despite the fact that the employer questioned the reliability of the information provided to the expert because the worker did not discuss non work stressors that were clearly present.

Implications for you

The decision does not mean that the employer needs to be successful in all grounds of dispute in a s81A application.

However when relying upon a medical report, be sure to consider whether there are any unfavourable conclusions and whether you have sufficient evidence to undermine those conclusions.

At the s81A stage consider whether reliance upon the causative factors identified in the claim form and medical certificate will be sufficient for the Tribunal to make determinations on causation, without having to rely upon a risky expert report.

Where an employer is seeking to dispute the factual circumstances giving rise to a claim (such as here denying abuse) be sure that all witness statements clearly dispute the relevant facts, and the necessity of evidence from all witnesses is carefully considered.

Toll Holdings Limited v Medwin [2017] TASWRCT 14