Section 11A (1) ‘Provision of Employment Benefits to Workers’

Section 11A (1) ‘Provision of Employment Benefits to Workers’ – When will action taken by an employer fall within this category? By Angellina Psirakis | April 2010 Area of Expertise | Workers Compensation

Summary This category is seldom used by insurers when considering a Section 11A defence. In fact, there is no clear cut decision or deﬁnition with respect to when action taken by an employer will be deemed to fall within the category ‘provision of employment beneﬁts to workers’ pursuant to Section 11A of the 1987 Act. However, you should be aware that decisions of the Presidential members provide for a fairly broad interpretation. Accordingly, the category should be re-visited by insurers.

Who Does This Impact? Employers and Insurers.

What Action Should Be Taken? When other categories such as ‘discipline’ do not apply, careful consideration should be given to the category of ‘provision of employment beneﬁts’.

Background There is little case law dealing with when action taken by an employer towards an employee will be considered to be the ‘provision of employment benefits’ within the meaning of Section 11A (1). That Section states as follows: 11A No compensation for psychological injury caused by reasonable actions of employer (1) No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers. Prior to the consideration of whether the action taken by an employer has been reasonable, it must be determined whether that action falls within one of the allocated categories. The limited case law available with respect to the ‘provision of employment benefits’ provides limited guidance in this regard. ISS Property Services Pty Ltd v Milanovic (2009) NSWWCCPD 27 (12 March 2009) The worker was employed as a cleaner and began having problems with a new manager from July 2006. The worker alleged that her new manager treated her aggressively and would shout and scream at her. It was also alleged that the manager threatened to sack the worker on a number of occasions. Subsequently the employer provided the worker with a letter regarding a reduction in her hours. At a later stage the employer also attempted to provide the worker with a letter regarding a transfer to the MLC Centre undertaking the same role. The worker refused to accept the letter and collapsed at work a few days later.

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Section 11A (1) ‘Provision of Employment Benefits to Workers’ When will action taken by an employer fall within this category? by Angellina Psirakis

On appeal of this matter (by the employer), Acting Deputy President, Anthony Candy, found the ‘provision of employment benefits to workers’ encompassed a reduction of the worker’s hours. He found the words in the Section ‘with respect to’ had a wide application. In light of this broad interpretation, it would appear that a fairly wide range of actions taken by employers could be argued as falling within the scope of ‘provision of employment benefits to workers’. Temelkov v Kemblawarra Portuguese Sports & Social Club Ltd (2008) NSWWCCPD 96 (4 September 2008) In this case, the worker was employed as a part-time doorman/security officer and began having trouble with a new General Manager employed by the company. Initially the employer issued the worker with a letter reducing his hours with the same wage. Some months later the worker was issued with another letter, stating that the worker’s employment would be terminated and he would be re-employed at a much lower wage, due to the company’s financial circumstances. The worker did not return to work following receipt of that letter. Deputy President Bill Roche accepted that this fell within the meaning of ‘provision of employment benefits to workers’ and stated as follows: That ‘experience’ or ‘incident’ directly related to the action taken or proposed to be taken by the Club with respect to ‘retrenchment or dismissal’ or the ‘provision of employment benefits’ and included the terms of the letter of 3 March 2007 and the manner in which the Club’s decision or proposal was communicated to Mr Temelkov.

Implications The decisions of the Presidential members noted above allow for a fairly broad approach when considering whether employer action falls within the category of ‘provision of employment beneﬁts to workers’. In this regard, action relating to the reduction of working hours and the issuing of a letter of termination indicating re-employment at a much lower wage were considered to fall within the category.

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Section 11A (1) ‘Provision of Employment Benefits to Workers’ When will action taken by an employer fall within this category? by Angellina Psirakis

For more information, please contact: Angellina Psirakis Lawyer T: 02 8257 5747 angellina.psirakis@turkslegal.com.au

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