The SRC Report: What Is the Scope of Employment for Disease Claims?

Welcome, everybody, to today's SRC Report. Today, I am joined by Abraham Ghaleb from our Commonwealth Compensation team. Abraham's a Senior Associate who works in Sydney. And welcome, Abe.

Thanks. Thanks for having me and inviting me to this podcast.

Oh, you're very welcome. You're a regular guest here.

Today, Abraham and I thought it would be a really useful point to talk about employment and the contribution employment makes to a disease under the SRC Act. I think this is really important because there is a distinction between an employment contribution in an injury, other than a disease, and I think that's sometimes called a frank injury, or a disease which is an ailment. We'll talk at other times about the distinction between the two.

But today, something Abe and I really wanted to focus in on is that employment contribution and where those lines are when something is in employment and can be counted for employment for the purposes of determining liability for a disease, and where maybe it's not so clear or where in our view it's not.

Abe, what do you reckon? Should we start with the definition?

Yeah.

Section 5B.

I think we should.

And I think perhaps it's worth also just mentioning some of the difficulties that arises out of the SRC Act and these sections is just the repetitive nature of the terminology. They often talk about "employment" or "employee's employment" or "suffered by an employee" or "aggravation of ailment", and a lot of these terms are intertwined with one another but may mean different things depending on the section. That's really where this podcast for this week comes from, doesn't it? The difference between Section 5B and Section 5A and the interaction between them.

Let me start off. Section 5B is the definition of disease, and what it says is, "Disease means an ailment suffered by an employee or an aggravation of such an ailment that was contributed to a significant degree by the employee's employment by the Commonwealth or a licensee." And employee's employment is perhaps what we want to zone in on today, isn't it?

Absolutely, Abe. And I think if we can just quickly flick to Section 14, because Section 14 is obviously the gateway provision, what it says is that Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered. And of course, once we have a disease, we have an injury, and liability can be accepted under Section 14. That's where the importance of that provision ultimately rests - in determining liability in the SRC Act.

To go back, Abe, you're 100% right.

What we want to focus on today is what it means in Section 5B by the employee's employment by the Commonwealth. Now, that's not defined in the SRC Act anywhere. And as you said, Abe, employment is mentioned all the time in the SRC Act. And you think it's the same definition in each provision, but, unfortunately, it's not. What's happened over the years is that the Tribunal and courts have looked at the term of what it means by employment for the purposes of determining whether or not a disease has been contributed to by an employee's employment. That's been done across many different worker's compensation jurisdictions and is certainly not unique to the SRC Act.

The seminal case is a High Court case called Federal Broom and Co v. Semlitch, and it's from 1964. Now, this case is obviously very old but gets cited regularly and is still good law. We'll put the citation to it in the notes to this podcast so that you can refer to it directly if you want. But what this decision said was that in relation to a disease and ailment, what they're looking for is some incident or state of affairs to which the worker was exposed in the performance of his duties and to which he would otherwise not have been exposed. That's what the High Court said employment means for the purposes of determining contributing factors to the disease.

The High Court also said that when the Act speaks of the employment as a contributing factor, it refers not to the fact of being employed, but to what the worker, in fact, does in his employment. The contributing factor must be either some event or occurrence in the course of the employment or some characteristic of the work performed or the conditions in which it was performed. Abe, have you got some comments about that decision?

Yeah. Not that I have got a problem with the High Court's decision. Absolutely not. But I guess, and I imagine for most people who read this, particularly for the first time, what you get is a very broad definition in a way. Because I think for most people, we say, "Okay, well, almost everything arises in employment or touches upon employment in some sense". Obviously, the actual duties, that's obviously the key component here. Let's put that to the side. But the interactions with your colleagues, when you read the EBA for the employment, when your employer says, "Look, we want everyone to be safe and healthy." Does that extend to my physical wellbeing outside of work? In that sense, it's a bit hard to understand, well, what are we actually talking about when we are discussing employment and how far does that band stretch, I guess.

Yeah, I think that's absolutely right. And the band is stretching, there's no doubt about it. As we work from our home and we bring our work to our homes, and it's on our phones, and we're never away from it.

But we'll put that to one side because that's probably a whole nother discussion.

I think that's exactly right. And where, in my view, where authorities that talk about by employment for the purposes of section 5B come into conflict, it's that concept of did you suffer from your ailment because of your employment? Or did you suffer from an ailment because of some duties or things that you were performing because of your employment? Because it's not enough in my view to say, "Well, if I hadn't been employed, then I would not have suffered from that condition". It needs to be something more than that. I think, Abe, it's probably worthwhile going through some of those decisions that relate to employment.

Sure. And the other difficulty, just to keep piling it on, is that I think the law has been struggling or has been refining this concept since its inception. Because when I was looking at some of the older cases to get a bit of a history going, I could see in Smith and Australian Woollen Mills, which is a 1933 decision, the High Court was talking about, when you think of worker's compensation, when you think about the proposition about arising out of employment specifically, what they're talking about is the work which the worker was employed to do out of his or her service.

 In 1937, again, the High Court, Justice Dixon this time, in Henderson and Commissioner of Railways, says, "Well, look, what you need to do is look at the nature and the terms of the employment or the circumstances in which work is done and on what, as a result, the workman is reasonably required, expected, or authorized to do to carry out his actual duties".

I thought that was really interesting because just taking a step back, there are so many things that touch upon our employment relationship. I can give, I think, a very relatable example, and it's this: very often, people in employment will become friends with their colleagues. If me and my colleagues have an altercation outside of the workplace that spills into the workplace - but it's got really nothing to do with the employment itself, it's about the relationship - does that touch upon the employment aspect here?

And then, I guess secondly, is, does it touch upon the employment relationship if we're looking at Section 5A, where we're talking about an injury that arises out of or in the course of employment? Or does it touch upon employment if we're looking at the 5B test where we are talking about a significant degree by the employee's employment? And I think perhaps not in the latter one, not in Section 5B, for reasons we can come to in a second, but certainly under 5A, that's a bit of a different proposition, isn't it?

And I guess that's the difficulty that we're talking about. There are a lot of conflated terms here and a lot of conflated issues. I guess the very first thing one needs to do when we are dealing with these sections is be very clear about, are we talking about an injury other than a disease? Or are we talking about a disease? In which case, we need that significant contribution to the actual work or its incidentals. That's the key test here.

I think you're right, Abe, and I think for the purposes of this discussion at least, we'll assume it's an ailment and it is not an injury other than a disease. Because we can talk about the application of May, which is another High Court decision, in relation to that distinction, I think at another time. Because it is an area ripe for hypotheticals and discussion, Abe.

I guess probably one of the reasons why we want to talk about this today with everybody is that where this comes up - the significant area it comes up in for our Commonwealth agency clients - is in rehabilitation. And particularly in rehabilitation, where an employee is not at work. The cases really, the main cases, deal with situations where employees are off on a non-compensable condition. They've been off work for quite some period of time, and there are attempts being made by the employer to return them to work.

That's kind of where the mine of these cases really comes from. There's some other cases that relate to some different aspects. But in general, what we are talking about today is situations where an employee alleges they've been injured, but they're not actually at work, and they're not actually performing any duties of employment when these injuries occur. I want to take us to the first case, probably of the more recent AAT cases, and that is the case of Re Pettiford and Comcare. We'll put the citation in the notes so that you can read it if you're interested.

In that case, the facts of that case were that an employee was off work, and they'd been sent to a fitness for duty to determine whether they can return to work and in what capacity they can return to work. Arising out of that fitness for duty was obviously a medical report. The outcome of that medical report was communicated to the applicant in that case, and the applicant didn't like that communication and potentially the findings by the medical examiner. She alleged that that contributed to a psychological condition.

So, the situation, in that case was whether or not the receipt of that letter was employment for the purposes of 5B. And in that case, Senior Member Britton, as he then was, he's now Deputy President Britton, determined that the letter was not employment. Even though it was undeniably a decision about the employment relationship in some ways and certainly would not have been received had they not been in an employment relationship. He applied Semlitch and Federal Broom and said it was not an event or occurrence that occurred in the context of the employee performing duties, nor was the receipt of such a letter or those attempts to return her to work incidental to the performance of duties.

Senior Member Britton, and I think this is where it comes down to, he accepted that, but for the employment relationship, it wouldn't have occurred. But an injury for the purposes of Section 5B, the test is not simply whether you are injured because you were employed. It was whether you were injured performing your duties of employment or it arose out of employment.

I'm happy to play devil's advocate a little bit with this because I think that case probably illustrates the difficulty in understanding these sections a great deal. This is a worker who is undertaking a fitness for duty. It's specific to the workplace. It's specific for the performance of those duties. Why shouldn't this be compensable under the legislation?

Do you have a view on that, Athena? It certainly seems like if it weren't for the employment, and it only relates to the employment and the employment duties, that this injury comes about, doesn't it?

Well, I think maybe it's a good time to segue to the next case then, Abe, because that might provide potentially some delineation between things that are caused by an employment relationship that are out and things that are caused by an employment relationship that might be in.

Graham and Comcare, again, citation in the notes, was a relatively recent case that was heard by the then Deputy President Humphries. Mr Graham had received a direction to return to work, he'd been off work for quite some period of time due to non-compensable conditions. He'd undertaken a fitness for duty that found that there was some capacity to be at work, and he was directed to return to work and received a direction letter through the Commonwealth. It contained all of the usual directions and consequences if he failed to comply with those directions.

And in that case, Comcare argued that it wasn't employment because it wasn't related to the duties of employment. A direction to return to work is related to the employment relationship. Now, Deputy President Humphries didn't agree, and he drew a distinction between a direction made in accordance with the public service directions. And presumably, we can extend that out for licensees in accordance with your employment your ability as an employee to give reasonable and lawful directions. He said that because it was a direction and it was a direction to return to work, it was inescapably connected with duties of employment and wasn't inconsistent with Federal Broom to say that that did contain the requisite connection to employment and duties of employment. So, in that case he found that such a direction was employment for the purposes of 5B.

I have to say, I didn't necessarily agree with Deputy President in relation to that decision, but it wasn't appealed by Comcare. I think maybe that potentially that could be a point where there is that distinction that a direction to do something that would allow you to perform duties is employment. The point we are just negotiating, when we're outside of that, when there's no directions, when the only reason for an interaction is just simply because there is an employment contract in place - aren't we looking at something different?

Is the real question, then, when we are looking at these kinds of issues, to determine whether this is something specific to the employee's employment in the sense of their work and duties, directly their work and duties, as opposed to a decision about the employment relationship itself? That's the best way to look at this.

Maybe that is the way to look at it.

Yeah.

And I think it only works when the employee . . . Or it works, hate to use this terminology because it's not very elegant, but this distinction works best when that employee is not at work. Because I think once we have an employee at work, that distinction between solely as a result of an employment relationship, and what level is it related to, some duties or performance of duties, becomes very blurred. Because the employee is at work, presumably performing duties.

Yeah. Like every case we're involved in, the facts are everything, isn't it?

The facts are everything, 100% right.

We move on to another much more recent case of Hooley and Comcare, and that also looked at the concept of employment. I guess Hooley was quite interesting because it involved rehabilitation. And I do think that for the purposes of Commonwealth compensation or worker's compensation in the Commonwealth employment field, where this distinction lies, it definitely lies in that pre-employment rehabilitation space. It's not to say that it can't apply outside of that, but we see it coming up the most when we are looking at people returning to work or people who are being rehabilitated outside of their employment. And that was happening in the matter of Hooley.

In Hooley in the AAT, the senior member applied Semlitch, applied Re Pettiford, didn't refer to Graham and Comcare, and found that the rehabilitation, while the employee was not at work, was not an incident or state of affairs to which Mr Hooley was exposed in the performance of his duties. Because rehabilitation is not the performance of your duties, unless that rehabilitation is you being at work, I would say. It's got to be outside of.

So he found for Comcare in that matter, and then that was appealed to the federal court. However, whilst submissions were made in relation to that, his Honour Justice Reeves did not make any findings as to whether or not rehabilitation was in or outside employment for the purposes of section 5B because he focused his decision on whether or not an agency or a Commonwealth agency had an obligation to make a rehabilitation program outside of a request by an employee to have one. So we didn't get some clear Federal Court authority on that point, which would've been, I think, incredibly helpful, Abe.

Yeah, look, I think it would have been, but obviously, the common thread isn't. . . I appreciate there's a difficulty in these types of cases, but I think what happens is sometimes you can't see the forest for the trees. And what you really do need to focus on was the emphasis upon the actual work performed by the employee, and is this, or does this come from, that actual work performed, or again, does it relate back to the employment relationship generally? And I could understand why the senior member in the Hooley decision was so focused on that because it's that reasoning which leads to the conclusion that rehabilitation is not the actual work performed by the employee or arises out of that. It is the employment relationship in a general sense of it.

Yeah, yeah. And then we get to a much more recent case of WNBR and Comcare. Again, citation will be in the notes. It really seems to divert from the more orthodox approach taken to the cases that we've cited. And even though Graham probably is differently decided to Pettiford and Hooley, it still does apply the case law as we understand it. And in WNBR, the member didn't apply the usual cases in relation to employment. It didn't refer to Semlitch, although that was relied upon by Comcare.

The Deputy President in that case took a kind of different approach. He focused their attention on the causation test for an injury other than a disease. So that's the other type of injury that Abe and I were talking about. Even though it was a psychological condition, and then referred to other decisions that relate to those kinds of injuries but that have not been referred to in the other Section 5B cases. So ultimately, Deputy President Rayment found that a negotiation with an employer to return to work was employment for the purposes of Section 5A and 5B, as the employer had induced or encouraged the employee to engage in the return-to-work discussion.

In that case, an employee was off work for, I can't remember, probably a non-compensable condition, but it really doesn't matter, and the employer was commencing its discussions about returning to work. Quite a normal kind of process of a return to work of somebody who's been off for quite a serious amount of time. And it was those discussions that caused the injury. Now, in that case, there had been no direction as there had been in Graham. It was just discussion. Pretty much as I read Deputy President Rayment's decision, he found that but for the employment and that employment relationship, the employee would not have suffered the condition because had he not been employed at all, then obviously there would've been no return-to-work discussions and that wouldn't have caused the condition. So it's quite a different way of approaching these kind of cases, Abe, I'd say in the most delicate way possible.

Yeah. I've got a kind of concern with this one as well, with all due respect to the Deputy President, because I would've thought that a return-to-work discussion is similar to that rehabilitation program where we're talking about employment relationships, as opposed to the work duties itself. So the fact that the Deputy President has taken a different approach and has said, "Well, look, let's go for injury other than a disease", and approach it through that reasoning is pretty surprising to me. Because while I don't dispute that it's possible and it occurs, for most people and for most cases, when you're looking at a psychological condition, you are always looking at Section 5B, and you are always looking at whether there's that significant contribution between the ailment and the employment.

I guess that's where I find this case difficult to understand, to be honest.

Yeah.

Yeah. I guess I would've expected a different outcome because I guess also the second part of that is this: if you take the "but for" argument to its logical conclusion, and it's what I touched upon when we were first discussing this, almost everything is related to employment in some way. Or a great deal of our lives is related to our employment. But for me, interacting with a particular person who is now my friend, would that be an injury? If I read the enterprise agreement and got upset, but for my employment, that wouldn't have affected me. There are a number of, I think, difficulties with taking this case to its, you know . . . 

To its conclusion.

Yeah. That cause problems in a general sense.

Not that I've seen much cases refer to WNBR, but I could see that being the kind of floodgate argument that we don't want here. That the "but for" test is an inappropriate test in these circumstances because what the worker's compensation legislation is trying to do is keep injuries specific to work. Which I'm not sure that this one does, again with great respect to the Deputy President here.

Well, great minds can differ on all things. That's why we have a High Court, and even then, they don't always agree with each other.

So I think that we can with respect disagree, and I think you're right. On my research, at least, WNBR has not been cited in any other decision. Because I think you've hit the nail on the head there, and it's not in accordance with decided decisions. It didn't properly address Semlitch, which is the preeminent case in this kind of legal question. And then it seemed to conflate the test for an injury other than a disease with the test for a disease. And they are not simply interchangeable. An ailment is an ailment. An ailment may also be an injury other than a disease, but it is not necessarily the case that it will always be. It seemed to be this decision proceeded on that basis.

But ultimately, we will never really know because the Deputy President rejected the application. Or affirmed the application, I should say, on other grounds. So this is not one that has been appealed because, ultimately, Comcare's decision was affirmed. There is a more recent case, isn't there, Abe? The most recent case.

It's called Boglari, B-O-G-L-A-R-I, and Ron Finemore Transport Service, again, citation down the bottom.

I haven't read this case, so give me just one second. What the senior member said in that case, which is a 2021 decision, when the Act speaks of the employment as a contributing factor, it refers not to the fact of being employed, which is really important, but to what the worker, in fact, does in their employment. It must be some event or occurrence in the course of employment, or some characteristic of the work performed or the conditions in which it was performed, to bring it within that Section 5B understanding of what we are talking about.

And again, I think that's just consistent, isn't it, with where we're talking about the previous High Court decisions about the actual work duties, and not where we're talking about the employment relationship in the general sense of the word.

Absolutely, Abe. I think this one has been decided in accordance with the authorities. The interesting case about this one was, even though the decision was that it was in employment, it was because the contributor was that the employee was very concerned with what he saw to be work health safety lapses that he observed in his employer's truck drivers or the loading of trucks, which occurred. These were observed, and his feelings were felt whilst he was performing his role as a truck driver, so it wasn't the same.

And this is where, I guess, I think a clear . . . Not a clear line, I suppose, but there's that difference between when an employee is not at work and when an employee is at work. And in this case, the employee was at work when he was observing those what he perceived to be lapses in work health safety. I think that was the difference in that case. But certainly, the way the law was applied was much more orthodox, and I think probably appropriately decided in that case.

Sure. But that, I guess, means what we're talking about - facts are everything.

Facts are everything. Facts. What do we say? It depends on the facts and circumstances of the case.

And to a large degree, you're absolutely right, but I think that there is a legal point that can be distilled in the Section 5B cases and the employment cases. And that is that the significant contributor, the contributor needs to have some connection to duties of employment. If all it is, is that it's because of your contract of employment or simply because you are employed, that probably is not enough to create the nexus between your employment and the condition.

Yeah. I'd agree with that completely. And perhaps I'd just add to say this is complicated.

This is complicated.

But, obviously, we've just gone through all these cases, and there are reasonable minds that differ on this. It's well worth, if necessary, going getting some legal advice about it, but also looking at the case law because it continues to develop. And I think we are both aware of a decision that's currently before the AAT but which hasn't been decided yet, and that's CVXU and Comcare. And that's going to be touching upon some of these same issues again.

That's right. Watch this space. Thank you so much for joining us today for the SRC Report and our discussion about employment for the purposes of Section 5B. Once again, I'd like to encourage you to subscribe to our podcast, but also to check out Lawflix, McInnes Wilson's purpose-built repository of CLE and lots of really interesting presentations there that touch on the SRC Act and the AAT. Thank you for joining us. Thank you, Abe, for coming along to the SRC Report again.

Thank you for having me. And I guess if there's any listeners that want us to talk about any topics specifically, please feel free to get in touch with either Athena or myself. We'd be glad to get some feedback and tailor the podcast.

Yes, absolutely. Thanks, Abe. And thank you, everybody. We'll speak soon.

Bye.