Disciplining employees is never an easy task but, when put in this unenviable position, employers need to ensure they demonstrate ‘procedural fairness’ or they could find themselves with a workers’ compensation claim, from the disciplined employee. In this article, we discuss the importance of conducting disciplinary proceedings in a fair and reasonable way and provide key take-aways for employers on how to do this.
Under the Workers’ Compensation and Rehabilitation Act 2003, employers are not liable for any psychological injury which arises as to the result of the employer “taking reasonable management action in a reasonable way“, which includes disciplining employees for misconduct. However, the questions of what constitutes ‘reasonable’ was called into question in the recent decision of the Queensland Industrial Relations Commission in Maher v Workers’ Compensation Regulator [2021].
Timeline of Events
By way of background, Mr Maher was employed by the Isaac Regional Council as a program leader.
On 24 May 2018, Mr Maher was asked to attend a meeting with his employer, where he was advised by management representatives regarding a possible suspension, pending an investigation into claims of workplace bullying made against him.
The meeting was scheduled for 4.40pm that afternoon. Mr Maher was not told about the purpose of the meeting in advance or offered the opportunity to have a support person present until the meeting was already underway and before the purpose of the meeting was communicated to him.
The Council appointed an external investigator and the Claimant was suspended on full pay whilst the investigation was conducted.
On 23 August 2018, Mr Maher was issued with a show cause letter by the Council based on the findings of a draft report from the external investigator.
On 29 August 2018, Mr Maher lodged an application for workers’ compensation with the relevant insurer, Local Government WorkCover (LGW), alleging he suffered a psychological injury (diagnosed as an “adjustment disorder with anxiety and depressed mood“) as a result of the Council’s actions in suspending him and the conduct of the investigation and ensuing disciplinary action against him.
The insurer rejected the Claimant’s application for compensation on the basis that the Council had “exercised reasonable management action, taken in a reasonable way”, which meant his psychological injury was excluded from the definition of “injury” under the Workers’ Compensation and Rehabilitation Act 2003.
The insurer’s decision was upheld by the Worker’s Compensation Regulator (the Regulator) on 8 August 2019.
Mr Maher appealed the Regulator’s decision to the Queensland Industrial Relations Commission (the Commission), alleging that he was not afforded procedural fairness during the three-month investigation and disciplinary process, with a particular emphasis on the conduct of the initial suspension meeting and the content of the Show Cause Notice issued to him.
The Commission handed down its decision on 10 September 2021.
What Happened
The Commission overturned the decisions of LGW and the Regulator to reject Mr Maher’s claim.
The Commission considered that while the Council acted reasonably in suspending Mr Maher pending the outcome of numerous allegations into his conduct in the workplace, this action was not taken in a reasonable way as:
- Mr Maher was not provided with advance notice of the initial meeting, including the purpose of the meeting (i.e. to suspend him from his duties), nor was he offered an earlier opportunity to have a support person present (noting the meeting was held close to end of the workday); and
- The “Show Cause Notice” did not detail in full the allegations against Mr Maher, or the grounds on which disciplinary action was being taken against him. It was also issued prior to receiving a final copy of the investigation report or considering all the evidence gathered by the investigator.
Ultimately, Mr Maher’s application for compensation for a psychological injury was accepted.
Key Takeaways for Employees
If any disciplinary action needs to be taken against an employee, employers need to ensure that a process of procedural fairness is followed and the employee is treated fairly throughout the process. Ways to demonstrate procedural fairness include:
- providing advance notice to the employee of the purpose of any disciplinary meeting, including providing adequate time for the employee to organise and bring a support person;
- ensuring the employee is fully advised of the allegations made against them, including the evidence in support of the allegations; and
- ensuring the employee is provided with an adequate period to respond to the allegations regarding their conduct and/or performance.
Courts have held that “management action need only be reasonable; it does not need to be perfect” and if disciplinary action is taken in a reasonable way, it is unlikely to result in a successful workers’ compensation claim.