The SRC Report: Reasonable Administrative Action – Best Practice Evidence in RAA Cases

Welcome everybody to the SRC Report. As you know, I'm Athena Cains, Principal at McInnes Wilson Lawyers, and I'm joined today by Carmen King, a Senior Associate in our Commonwealth Compensation Team. Carmen, welcome.

Hello, thank you for having me.

You're very welcome.

Today, Carmen and I are going to talk about reasonable administrative action and, in particular, how an agency might structure its reasonable administrative action response in any kind of employer statement or request for reconsideration. And I think at the outset of what Carmen and I want to reiterate is that reasonable administrative action (RAA) really is not about finding ways to exclude compensation. I think there needs to be a real acknowledgement that when an employer puts in an RAA case in a response or a request for reconsideration, it can have an effect on the employee receiving that. So, there are decisions or evidence that it's something that agencies shouldn't take lightly. Today's session is about:

• What are the triggers for a reasonable administrative action case for an employer;
• How should an employer frame that; and 
• What evidence should they include? 

So, Carmen, we talk about this a lot, don't we?

Yeah, it comes up very frequently. Of the claims that I get that relate to psychiatric conditions, it's a frequent issue to be determined as to whether it should be excluded on the basis of reasonable administrative action. And the difficulty we often have is that it seems to be a go-to provision to try and exclude a claim. Unfortunately, it is not backed up by the requisite amount of evidence needed because the burden of proof in an RAA matter largely rests on the respondent due to its exclusionary nature.

And I think, I mean, something that we'll talk about a lot in this series is the beneficial nature of the legislation as well. The legislation is not set up to exclude people from compensation.

So, I think that's absolutely right, Carmen. And we thought it might just be good to talk about the difference between reasonable management action and reasonable administrative action just as a threshold question. Because it often comes up that agency employees working on this tend to confuse and conflate the two - and they are actually quite different. Reasonable administrative action is included in reasonable management action, but reasonable management action is not reasonable administrative action. And what I mean by that is RAA focuses on action taken that's specific to that employee. Whereas reasonable management action will include organizational changes and directions to perform, which are not included in reasonable administrative action. 

So, what are common categories of reasonable administrative action, Carmen?

Normally, what we find is things like performance management of an employee will be reasonable administrative action, for example, failure to obtain or retain a benefit. This can often refer to things like a promotion or failure to get a promotion. We also have things like informal performance management. So, it doesn't necessarily require a formal process to trigger the section. The section is drafted so that it's not limited. It gives a bit of a list, but the list is not exhaustive, so as long as you can show that the action that was taken was specifically in relation to the employee's employment, then you can make the argument that it was reasonable administrative action.

And I think a really obvious example of that, which Carmen and I have spoken about, is a machinery of government change.

Now, a machinery of government change will mean that an employee's department may change or their location of work may change. If changing locations because of a machinery of government change caused a psychological issue, that would not be RAA. This is because the change applies to everybody in this employee's chain of command or job because that's how machinery of governments changes work. But if it wasn't related to a machinery of government change and was actually specific to that employee, and there was a discussion with that employee about we are going to change your location of employment, then that may indeed be reasonable administrative action because it's not this organizational decision. It's a decision that's specifically related to that employee alone. Would you agree, Carmen?

Yeah, yeah. That's exactly right. And anything that's going to affect the general section or a large number of employees because of one action is not necessarily going to be considered an administrative action with respect to the employee's employment. Which is how the section is worded, so that's a really important consideration when looking at this particular section.

So, we won't get too far into what is RAA because I think that is definitely a topic for another podcast.

What we want to do is give a little bit of an overview of the difference. What we are talking about today is much more related to evidence and what kind of documents an agency might need to establish that there is a reasonable administrative action taken in a reasonable manner in relation to an employee. And that's a fundamental need if Comcare is going to decline a claim based on this exception.

So, Carmen, I think that we should just focus, to start with, on performance because that's probably where we see the RAA exclusion being relied upon the most. So, would you like to talk to us a bit about what you see as the fundamental evidence we might need in relation to a performance RAA claim?

Sure. It's important to start at the point before you've even looked at there being a compensation claim. And if you have an employee that requires some:

• Assistance;
• Performance management;
• Counselling; or
  Coaching.

it's important to keep detailed file notes of those meetings and conversations. Because while they may seem to be fairly inconsequential at times, from a supervisor's or employee's perspective, it can be a big deal when you are told that you require a bit of coaching in your job or performance management. Even on a really minor, informal basis, that can be a big deal. And those are the kinds of things that can then, with a cumulative effect, turn into a claim for compensation.

So, it's important to keep detailed file notes of these kinds of actions. I would expect to see:

• Emails being kept of conversations;
• Email conversations between the supervisor and the employee; and
• File notes of meetings that occur.

Even if it's just an email to yourself to say, "I met with so and so today, and we discussed the following points." Those are the sorts of things that I would expect to see in a case where the RAA exclusion was being argued. Because one of the things that I find, and I've had several cases of late, is the contemporaneous material is just non-existent, but an RAA argument is being attempted without any of the evidence to support that particular argument.

Often as well, these things can turn into something like a personality clash between a supervisor and an employee. And the fact that two people don't get along very well is not a basis for an administrative action exclusion. But those are the cases as well where it's vital that we've got that documentary trail of the steps that were taken because that will show:

• That reasonable actions were taken by the supervisor to assist the employee to improve their performance; or
• That it was not reasonable and that the employee should be granted compensation in this particular case.

And I think the file notes, obviously, are crucial pieces of evidence. Without them, we're left with an employer trying to reconstruct a performance process which, as Carmen said, can lead to a real he said- she said situation between the employee and the supervisor. And it opens both up to some quite difficult conversations. Because if you are not keeping file notes and if you are not managing performance in that way, then there's a real question there whether the employee is even aware that they are being performance managed.

Yeah.

And the number of cases that Carmen and I have seen where the employee's first indication that they were under some kind of performance management is in the employer statement. It shouldn't be that way. That's where the harm can be caused. Because then we have a situation where we have witness statements and the advisor up on the stand against the employee, and they're very difficult cases to run and are very difficult for all involved.

One thing I would absolutely advocate as well is more open communication between supervisors and their employees. Because I've also seen matters where the first the employee knows about being performance managed is when they've seen the employer statement. But then I've seen email correspondence between the supervisor and the next level up talking about the performance of this employee, but none of that correspondence has been had with the employee.

So, the higher-ups are all having conversations about this person's performance and the fact that it may need some work or some management, but none of those conversations have actually occurred with the employee. So, really open and transparent communication with the employee and appropriate file noting of that communication is really, really important as well. It's not performance management if the employee has no idea that the discussion has happened.

And I think we link that back to what we said at the start. RAA is action taken in relation to the employee. RAA is not just identifying performance issues that all of the higher-ups are aware of. That has to be brought down and applied to the employee for it to be RAA. So, I think there's a real piece of work there, as we would always say in performance management, of capability of the supervisors who are conducting the performance management and the administrative action. I think that's key.

And obviously most agencies, in fact, all agencies, would have policies. But there also may be, if you are identifying a gap between what you're seeing supervisors do whilst they're in the thick of the performance management, and as Carmen said, this happens mostly in that informal stage before they've reached out to HR. If you've noticed this capability gap, then there really is a place there for some training to ensure, firstly, that good file notes are recorded. God file notes will also assist in providing procedural fairness and natural justice to the employee who is being performance managed. Because where you've got file notes, you've got a record of conversation being had, which is integral to a reasonable administrative action claim for performance.

And I think, Carmen, I guess another thing we wanted to about is: how do you fill in the gap if you are in a situation where informal performance processes have been occurring, and there isn't a record or an adequate file noting record?

I've seen agencies deal with this well, and I've seen them deal with it very poorly. I would say from my experience that probably the worst way this can be dealt with is by:

• Sending emails to the supervisors and attaching the employee's statement in support of their compensation claim; and
• Asking them to respond and then sending their response straight to Comcare as part of section 71. 

That's probably the low point. I can explain why, but I will hand over to Carmen.

I mean, look it is difficult to fill in gaps. If that contemporaneous material doesn't exist, it's very hard to then try and fill those gaps in a way that is going to appropriately fulfil the need for the evidence in a tribunal. If you are getting a statement from a supervisor 12 or 18 months after the event, and they don't have emails or file notes with which to refresh their memory, then their statement is not going to provide a large amount of evidentiary assistance..

I don't know about you, but I have difficulty remembering what I had for breakfast yesterday. So, asking someone to properly recall the events that may have occurred 12 months down the line . . . because workers' compensation claims are made when the person first feels their symptoms and first understands that they're unwell. But then the actual issues that caused that to occur often are cumulative and can have occurred three, six, or 12 months ago in the past. So, statements can be really, really useful if they're properly considered and if they're written in a meaningful way. But ultimately, for me, if the file notes and email correspondence and those kinds of documents from the time don't exist, it's really difficult to make a good case based on an RAA exclusion.

I think you're right. I guess the way that we would approach a statement if we don't have that contemporaneous evidence is by reviewing the statement of the employee and then asking the supervisor questions that are specific to the allegations raised by the employee. Because sending an employee statement to a supervisor is quite an inflammatory step. Supervisors are human beings, and it's very rarely the case that a supervisor is undertaking a performance process in a really negative way. In most cases, they are genuinely trying to improve the performance of the employee, and then to find out that the employee the whole time has found it an incredibly toxic kind of process can be incredibly hurtful to a supervisor. So, you can find supervisors react to those employee statements emotionally, and it's entirely understandable.

So, if you do need to get a statement from a supervisor because when you're responding to the initial claim, you don't have contemporaneous evidence, and the supervisor has said to you, "We are in this RAA process", the supervisor will need help and guidance in properly responding to the employee statement and in order to address the issues that we need to address in a reasonable administrative action exclusion case.

And those are, firstly, that we have administrative action, as Carmen and I have talked about. And secondly, that it was conducted in a reasonable manner. And I guess overarching all of that is that the RAA that was taken needs to correspond with what the applicant is saying causes their condition. Would you agree with that, Carmen?

Yeah, I think that's right.

If an agency is going to approach it in that way, then my strong recommendation to them is not to. But suppose that's the decision that is taken. In that case, it needs to involve the legal team because what you are doing is you are creating evidence by obtaining a statement from a supervisor. When you create evidence, it's evidence forever. If it's not done with due care and attention, it can firstly be harmful to an employee needlessly. And secondly, it will actually not assist Comcare in making its decision and then ultimately a Tribunal or a Federal Court, if it ever got to that point.

I agree with that entirely. The other thing to remember for the supervisors who are making these statements is: in the event that these matters do get to the Tribunal, the expectation will be that they will be giving evidence. And the basis of that evidence will be:

• Any statements that they've made; and
• Any statements that are made without due care.

Proper consideration of the issues will make it incredibly difficult for them to give evidence.

And if they turn into what can sometimes become, for want of a better term, slanging matches between a supervisor and an employee, because as you said, they've just been given each other's statements as a whole and then been asked to respond to it. People do respond to these things emotionally, and they are going to focus on the personal aspects of it as opposed to the legal or administrative questions that are being asked in relation to the processes of any kind of action that was taken. So, you never want to be in the position of having to give evidence and explain yourself to a Tribunal under oath why you called someone names or referred to someone in a less than polite manner in a statement that was then filed in a Tribunal. So, it's always important to consider the long-term ramifications of these kinds of matters as well.

Yeah. And going back to something you said before, Carmen; these statements, if they're obtained in this way, they are more contemporaneous to that. And what I mean by contemporaneous is they're created closer to the events that are being questioned or looked at, which gives them greater evidentiary weight than a statement that we might draft after trying to regularize what the supervisor was actually probably trying to say in their emotional rebuttal of the employee's statement. And that's the potential risk to agencies in obtaining evidence in that way.

So, I guess if we can just recap on the important things in relation to evidence for RAA's is, firstly, as Carmen said, contemporaneous file notes. And that is fundamental to a performance management process and probably fundamental to most administrative actions I would've thought because they are specific to employees and they should be file noted. That is something that happens before any claims are made, so that really is an agency having really good capability of their supervisors.

The second is to be very careful. Agencies should be careful in asking Comcare to apply the RAA exclusion. In our view, applying their RAA exclusion can be harmful to an employee, and it really will not assist in rehabilitation if it's not thought through and there are no prospects of it being successful.

The third thing is that agencies should be very careful in getting supervisors to respond to employees' statements. In our view, that is the creation of evidence. There needs to be due care taken by agencies to ensure that anything that's obtained in that way from a supervisor addresses the legal issues and is probably reviewed by a legal professional, whether it's within the agency or someone outside of the agency. So, those are our three takeaway messages. Carmen, did I forget anything?

No. I think that pretty much covers the main ones. Yeah.

Great.

Well, thank you for joining me today, Carmen. It's been an absolute pleasure as always.

Thank you very much.

And I remind all of our listeners to subscribe to the SRC Report and also to have a look at our LawFlix capability. LawFlix is an on-demand CPD repository that McInnes Wilson has. Once registered, you'll be able to look at the online training that we have presented regarding the SRC Act and related employment issues at your leisure. So thanks, Carmen, and thank you, everybody, and we'll see you all again soon.

Thanks very much.