How Not To Conduct A Disciplinary Meeting: QIRC Orders Compensation For Psychological Injury

A recent decision of the Queensland Industrial Relations Commission (QIRC) in Glen Rowe and Q-Comp (WC/2008/76) casts serious doubt over the previously held view that where a claim for compensation for psychological injury includes multiple stressors, only one stressor needs to be reasonable management action for the claim to be denied.

Multiple stressors

The employee had been employed by the employer for 22 years, 15 of those as the Sales Manager for a car sales dealership. The symptoms of the employee's Acute Aggravation of a Major Depressive Disorder commenced in March 2006. The employee had a pre-existing diagnosis of depression.

The employee resigned from his employment following an incident on 22 April 2008 and subsequently made a workers' compensation claim. The workers' compensation claim cited three main factors he believed to have contributed to his injury:

• Events of 22 April 2008;

• Replacement of older staff with less experienced staff; and

• Pressures of working with unsuitable staff and failure by management to support him over the difficulties he was encountering.

The employee's claim was rejected by WorkCover Queensland and Q-Comp. The employee appealed Q-Comp's decision to the QIRC.

Injuries caused by disciplinary meeting

On 21 April 2008, the employer's General Manager decided to hold a compulsory meeting of all sales staff at 7.00am the next morning. The meeting was to relaunch a rewards program and the reason for the short notice was that the organisation that administered the program was only available the next day. The general hours of work for sales staff were between 8.00am and 6.00pm. No extra payment was made for attendance at the meeting, nor was breakfast provided.

Two sales consultants, both direct reports to the employee, complained to the employee about the meeting. Both had family commitments that were not able to be changed at short notice and did not attend the meeting. The sales consultants were the only sales staff not to attend the meeting.

The General Manager decided to hold meetings with the sales consultants immediately on their arrival at work and discipline them by issuing them with a first and final written warning. The General Manager asked the employee to be present at the meetings. The General Manager did not inquire as to whether the sales consultants had attempted to contact him regarding their ability to attend the meeting (one of them had emailed him the day before).

The QIRC found that the meetings were "classic cases of how not to conduct a disciplinary meeting". This was because:

• the General Manager was aggressive during the meetings and the sales consultants responded to his aggression;

• the sales consultants refused to sign the warning; and

• the meetings were poorly handled and degenerated into slanging matches.

The QIRC found that the employee sat silently during the meetings and was "mortified" by what happened.

Later that morning, the dealership's owner telephoned the sales consultants and verbally abused them for their absence and their conduct during the disciplinary meetings. The sales consultants complained to the employee regarding the owner's conduct. The employee decided that he did not have the "stomach" to continue as the Sales Manager and resigned from his employment.

The QIRC found that two of the employee's stressors were not sufficient to support his claim for compensation, but agreed with a Psychiatrist's assessment of the events of 22 April 2008 as being the employee's final decompensation¹.

More than just a blemish

Q-Comp argued that the management actions on 22 April 2008 were a blemish and given that two of the three stressors were reasonable management action taken in a reasonable way, the employee's entire claim for compensation must fail. Q-Comp had relied upon this reasoning from previous cases in its decision.

The QIRC considered the events of 22 April 2008 in the context described above and stated that it did "not accept that management actions constitute a blemish simply because they are limited in time and number. To so characterise them fails to consider their significance, difference and impact."

The QIRC confirmed that the employee's injury had its "genesis in reasonable management action". However, his final decompensation on 22 April 2008 did not involve reasonable management action taken in a reasonable way particularly given that the events were excessive and extraordinary. This was sufficient for the employee's claim to be accepted.

Lessons for employers

Clearly, a poorly handled disciplinary process or meeting exposes an employer to a workers' compensation claim (not to mention potential unfair or unlawful dismissal claims, discrimination claims and breach of contract claims). More specifically, one management action, if it is not reasonable and taken in a reasonable way, may be sufficient for an employee's workers' compensation claim to be accepted. Employers should ensure that all management action taken in relation to employees is measured against the requirements that it be reasonable and taken in a reasonable way.

Footnote

1 The point at which a person's psychological system can no longer cope with stressors.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.