The Magistrates' Court recently handed down the first judgment under the amended provisions of section 82(2A) of the Accident Compensation Act.
At the time of their introduction, it was generally considered that these amendments, which apply to 'mental injury' sustained on or after 5 April 2010, would make it easier for employers to establish that a work-related mental injury was not compensable because it had arisen wholly or predominantly for 'management action' taken on reasonable grounds and in a reasonable manner.
A significant aspect of the amendments was to broaden the scope of activities which can be defined as 'management action' so as to reflect contemporary management practices.
There is now an extensive list of actions which constitute 'management action' in the new section 82(10), and there is also reference to the fact the list is not exhaustive.
The facts in Krygsman-Yeats v State of Victoria were perhaps not ideally suited to test the operation of the amended provisions.
In Krygsman-Yeats, central aspects of the 'management action' which were found to have given rise to the worker's mental injury would likely have been recognised as management action under the 'old' section 82(2A) provisions. It is noted, however, that it was found that the employers actions fell within seven different categories of management action as defined by section 82(10), some of which may have been have constituted management action under the 'old' provisions.
That different actions occurring at different times were found to constitute 'management action' illustrates another feature of the new provisions.
Section 82(10) establishes that the mental injury can be caused by more than one action by management. This provision accords with what the Victorian Supreme Court of Appeal ultimately found to be the correct construction of the 'old' section 82(2A) provision in State of Victoria v Leck.
Prior to the decision in Leck, which was handed down in April 2010, it had been argued that the mental injury could only be wholly or predominantly caused by one management action - not from the combined effect of more than one action by management. Under that construction, it had been easier for a worker to argue that in circumstances where the mental injury had arisen due to a multitude of factors, one particular management action was not the whole or predominant cause.
In Krygsman-Yeats, it was common ground that the worker's mental injury had arisen wholly or predominantly due to management action.
That the employer's reliance on section 82(2A) failed in Krygsman-Yeats illustrates that while 'management action' is now more expansively defined and broadly applicable, the onus remains on the employer to establish both that the grounds for taking the management action and the manner in which the action is conducted are 'reasonable'.
In Krygsman-Yeats, Magistrate Garnett found that while the management action was taken on reasonable grounds, it was not taken in a reasonable manner.