Christmas cake goes from sweet to sour in worker’s compensation claim

16 August 2022

Tribunal examines legal test applicable to the question of whether a ‘reasonably arguable case’ exists and considers notice argument.

In issue

  • This decision concerned whether an employer had shown it had a reasonably arguable case to dispute a worker’s claim for compensation under Workers Rehabilitation and Compensation Act 1988 (TAS) (‘the Act’).

The background

The worker claimed she had been bullied and harassed in the workplace after being subjected to multiple meetings and interviews regarding allegations of fraudulent conduct against her. The worker argued this caused her to suffer from extreme stress and an adjustment disorder.

The employer argued that any stress was caused by reasonable actions taken by the employer to discipline or counsel (pursuant to s 25(1A)(a) of the Act), or reasonable administrative action (pursuant to s 25(1A)(c) of the Act) in connection with the worker’s employment and the allegations of fraudulent conduct. The employer also raised the worker’s failure to notify the employer of the injury as soon as practicable after its occurrence.

The facts leading to the worker’s alleged fraudulent conduct were interesting indeed. As a school canteen worker, she noticed some milk in the fridge which was about to expire. Rather than waste the milk, she used it to make four Christmas cakes, the dried fruit in which she purchased with her corporate credit card. The cakes were subsequently sold, two of which the worker bought herself. She maintained the money made from the sale of the cakes was greater than the sum required to purchase the dried fruit and went back into the canteen.

The decision at trial

The test as to whether the employer has demonstrated that it has a reasonably arguable case to dispute the worker’s claim is whether it is reasonably arguable on the material available in relation to the claim, or identified deficiencies, or weaknesses in the claim that, following a contested hearing, it may be rejected.

Expert medical evidence was relied upon by the worker in which the worker’s treating physician stated the most likely cause of the injury were the accusations of fraudulent conduct. The expert medical opinion was that the worker subsequently became partially incapacitated due to these allegations. This was found to be rebuttable if the employer could show the worker’s condition arose out of actual fraudulent use of the credit card. Further, the meetings and discussions following the discovery of the potentially fraudulent transactions could be argued by the employer as reasonable administrative action, but not as disciplinary or counselling action. Thus, a reasonably arguable case under s 25(1A)(c) was made out.

In terms of the notice argument, in applying State of Tasmania v Pilling [2020] TASSC 13 the failure to give notice of injury does not affect a worker’s right to claim compensation if the failure was occasioned by mistake, absence from the state or other reasonable cause, and, additionally, the employer’s defence is not prejudiced by reason of the failure to give notice as required. In relation to the question of notice, counsel for the employer submitted that the worker is deemed to have suffered her injury on 16 December 2021, being the first day that she was certified incapacitated for work. The worker’s claim for compensation indicated that she had given notice of her injury on 3 February 2022. The employer said there was no evidence of any mistake, absence from the State or other reasonable cause that might bring s37 into play.

No substantial evidence was adduced by the worker pursuant to s37 of the Act to explain why there was a delay in reporting the claim. Given the lack of evidence, it was found the worker had failed to discharge their evidentiary burden. A question as to the practicable timing of the reporting of the injury remained open.

Implications for you

This decision highlights the applicable legal test in respect of whether a reasonably arguable case exists. The employer only needs to show there is a reasonable chance the workers claim may fail. Importantly for this case note, in terms of the notice argument, it also demonstrates that for s 37 excuses for delay in notification to apply, the onus of proof is on the worker to provide evidence of mistake, absence from the state or other reasonable cause and that if the employer can establish that there is a real issue about the cause of the deficiency then that may demonstrate they have a reasonably arguable case. This case shows that a detailed factual enquiry must be made on each claim before deciding whether to run this argument.

State of Tasmania (Department of Education) v B [2022] TASCAT 58

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