8 September 2017
Full Federal Court clarifies when a psychological condition is an 'injury' or 'disease' under the SRC Act and how decisions ceasing entitlement to workers compensation can be approached
On 5 September 2017, the Full Court of the Federal Court handed down its decision in Prain v Comcare  FCAFC 143 (Prain). The Court clarified when a psychological condition is an 'injury (other than a disease)' or a 'disease' under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act) and how decisions ceasing an entitlement to workers compensation on the basis employment is no longer contributing to an injury to the requisite degree can be approached.
The legislative context
Section 14 of the SRC Act provides that Comcare is liable to pay compensation in accordance with the Act 'in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment'. 'Injury' is defined in 5A(1). That section relevantly provides:
(a) a disease suffered by an employee; or
(b) an injury (other than a disease) suffered by an employee, that is a physical or mental injury arising out of, or in the course of, the employee's employment; …
A 'disease' is defined in s 5B(1) to mean:
(a) an ailment suffered by an employee, or
(b) an aggravation of such an ailment
that was contributed to, to a significant degree, by the employee's employment by the Commonwealth or a licensee.
An 'ailment' is defined in s 4(1) as 'any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development).'
Section 19 provides for weekly compensation for 'an employee who is incapacitated for work as a result of an injury'.
In early 2011, Mrs Prain commenced a position as a Senior Project Officer for the medical records system at the Canberra Hospital. Within a few weeks of commencing her employment, Mrs Prain encountered animosity and criticism from her supervisor and others at the hospital. She brought a claim for compensation for an adjustment reaction. Comcare initially accepted her claim.
Subsequently, Mrs Prain lodged compensation claims with Comcare for:
- permanent impairment and economic loss under ss 24 and 27
- medical treatment and incapacity payments under ss 16 and 19 of the SRC Act.
Comcare denied these claims, and decided that, from 16 July 2015, Mrs Prain had no present entitlement to compensation under the SRC Act in respect of her adjustment reaction.
The Administrative Appeals Tribunal identified 2 issues for its determination:
- Was Mrs Prain's psychiatric condition (her adjustment reaction) an 'injury (other than a disease)' or a 'disease' pursuant to s 5A of the SRC Act?
- Did she continue to suffer from a work-related condition?
Mrs Prain argued her adjustment reaction was an 'injury (other than a disease)'. However the Tribunal found that Mrs Prain suffered a 'disease' under s 5B(1). After referring to numerous authorities, including the High Court's decision in Military Rehabilitation and Compensation Commission v May (2016) 257 CLR 468 (May), the Tribunal said at :
It should be noted, of course, that the condition under consideration in May was a physical, not a psychological, condition. In this sense, the authority which Mr Anforth [counsel for Mrs Prain] was seeking, to clarify precisely in what circumstances a psychological condition qualifies as an injury, is not provided by the High Court here. However, in overturning some of the reasoning of the Federal Court and in emphasising the continued utility of sudden or identifiable physiological change in the normal functioning of the body as the touchstone for injury, I regard the High Court's decision as affirming the long line of authorities which have tended to place mental illness in the statutory category of disease.
(emphasis in original)
It concluded there was no single, definable moment or moments during the relevant employment period when Mrs Prain might be said to have sustained a sudden, and ascertainable or dramatic change in her mental state but, rather, her 'loss of [mental] equilibrium' 'seemed to be the outcome of a slow build-up of hurt and resentment rather than of a climactic episode or confrontation or conflict.'
After reviewing the evidence, the Tribunal found that Mrs Prain continued to suffer 'a psychiatric disorder of some severity'. But the Tribunal also found that her employment at the Canberra Hospital had ceased to be a significant contributor to this condition by July 2015, and so it was no longer a 'disease' for the purposes of the SRC Act. It accepted Comcare's contentions that unfortunate events in her life had 'crowded out what occurred at the Canberra Hospital as the major contributors' to her ongoing mental ill-health.
The Full Federal Court's decision
On appeal to the Federal Court, Mrs Prain contended that the Tribunal had misconstrued and misapplied May when it concluded that Mrs Prain's adjustment reaction was a 'disease'. Her counsel contended that by 'treating the formulation of a "sudden and ascertainable or dramatic physiological change or disturbance of the normal physiological state" as constituting a "test for injury"', the Tribunal erred.
The Full Court of the Federal Court (constituted by Kenny, Tracey and Bromberg JJ), accepted Comcare's submission that the Tribunal had not made such an error. After discussing a number of authorities, including May, the Court observed that:
- If the Tribunal had in fact treated 'disease' and 'injury (other than a disease)' as mutually exclusive categories, it would have been in error but the Tribunal did not do so ().
- It was not impermissible for the Tribunal to note that the authorities tended to place psychological conditions in the statutory category of a 'disease' ().
- Whether or not a psychological condition is to be characterised as a 'disease' or, alternatively, an 'injury (other than a disease)' will depend on the nature and incidents of the psychological change ().
- While 'suddenness' is not determinative or a test for whether there is an 'injury (other than a disease)', it is not necessarily an irrelevant consideration either, and is often useful in distinguishing an 'injury (other than a disease)' from a 'disease', particularly in distinguishing physiological change from the natural progression of a disease ( and ).
Mrs Prain also contended that the Tribunal had misapplied ss 5B and 19 of the SRC Act in holding that her employment at the Canberra Hospital had ceased to be a significant contributor to her adjustment disorder by July 2015. The Full Court accepted Comcare's submissions that no such error had occurred. In doing so, the Full Court observed:
- The Tribunal was entitled to have regard to both the relatively short time Mrs Prain was employed at the Canberra Hospital and her predisposition to the ailment she suffered in diminishing, to some degree, the weight attached to her employment in assessing what was contributing to her mental disorder (–).
- The Tribunal had a discretion as to the factors listed in s 5B(2) of the SRC Act that might be considered in determining whether Mrs Prain's employment had significantly contributed to an ailment ().1
- There was no error in the Tribunal determining the issue of Mrs Prain's ongoing entitlement to compensation by reference to ss 5B and 14 of the SRC Act, rather than s 19. However, this conclusion was linked, at least partially, to the way Mrs Prain ran her case before the Tribunal, and may not necessarily suggest s 19 should not be addressed in future decisions deciding whether there is an ongoing entitlement to compensation (–).
The Full Federal Court's decision in Prain reaffirms that, whilst a psychological condition can be either a 'disease' or 'injury (other than a disease)', it is likely to constitute a disease unless there is something about the nature and incidents of the psychological change that occurred that is sudden or dramatic. It also confirms that whilst 'suddenness' is not a determinative test for whether there is an 'injury (other than a disease)' or a 'disease', it is not necessarily irrelevant either and is often useful.
Prain also offers a useful illustration of the issues that should be considered in deciding whether an employee who is suffering a long-term mental condition has an ongoing entitlement to workers' compensation.
Andrew Berger appeared as counsel for Comcare in the Administrative Appeals Tribunal and Full Federal Court appeal.
For further information please contact:
Senior General Counsel
T 02 6253 7405
T 07 3360 5744
1 In Comcare v Power (2015) 238 FCR 187, Katzmann J said (at ) 'While the
chapeau to [subsection s5B(2)] states that those matters "may" (not "shall") be taken
into account, a word which is generally permissive, properly construed it is at
least arguable that in this context it is directory; in other words that "may"
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