By Paul Trimble, Director, Westlawn Business Services 25 September 2014
A Tax Office employee recently lost her bid for workplace compensation, with the Administrative Appeals Tribunal ruling the employee’s supervisor acted reasonably in response to suggestions she deserved longer breaks as she had to go in search of cafés that served organic coffee and soy milk.
The case, as reported by Smart Company, highlights the importance for employers of properly managing employee performance along with the often delicate issues of stress and bullying in the workplace.
In January 2013, ATO employee, Pardeep Sidhu, sought compensation from government workplace insurer Comcare claiming she had suffered a stress-related disorder. The disorder, she claimed, was the result of administrative actions taken by her supervisor, Sky May, in regard to certain time management issues.
In addition to her quests for organic coffee, Sidhu had told her supervisor that discrepancies in her time sheets could be explained by her taking the stairs for exercise, comforting a friend, having an interstate login to the time management system (causing delays in her work hours being recorded), and studying for her MBA in the foyer of the building.
After multiple meetings with Sidhu, May was granted permission by the ATO’s Human Resources unit to formally warn Sidhu about her failure to meet the ATO’s time management requirements.
In response, Sidhu claimed the supervisor used her position to “intimidate and scrutinise her work and career” and as a result of the time management issues, rejected study leave requests and a dispute over Sidhu’s performance review, May was responsible for her developing the stress-related disorder.
Comcare, however, dismissed Sidhu’s claims in January 2013 and upheld the decision on appeal in April of that year.
In June 2013, Sidhu appealed to the Administrative Appeals Tribunal, but in July this year the tribunal ruled the ATO and May acted reasonably stating that “there was a breakdown of the relationship between a supervisor and an employee and that this adversely affected the level of trust between the two and led to a considerable amount of hostile action by both parties.”
The tribunal found the evidence did not support Sidhu’s claims that the administrative actions were unreasonable or taken in a reasonable manner.
Lessons for business in dealing with a challenging employee
Andrew Douglas, partner at M+K Lawyers, explained to Smart Company that the test applied in stress-related claims for workplace compensation is the same as that applied in bullying cases. That is, whether the organisation acted reasonably in the way it managed the claim and whether its actions were themselves reasonable.
“What this court held, and what other courts have held, is that if you are treated reasonably and the decisions taken by the organisation is reasonable in themselves, it wouldn’t matter if you had a psychotic breakdown,” Douglas told Smart Company.
“The lessons for business are, when you’re dealing with a challenging person, step away from the conflict, treat them the best you can, and ensure you objectively follow your processes on all occasions.
“If you do that, three things will happen. One, the likelihood of the issue escalating to a compensation claim is reduced. Two, if it is elevated to a compensation claim it will be rejected. And three, if they make a bullying claim, you have a complete defence,” Douglas said.
Anyone conducting a business has the primary duty of care under the Work Health and Safety Act 2011 (WHS Act) to ensure, so far as is reasonably practicable, the health and safety of workers. Health is defined in the WHS Act as both physical and psychological health.
Disclaimer Westlawn Business Services Pty Ltd provides this information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation.