Court Adopts a Literal Approach to Section 82(A) of the Accident Compensation Act

State of Victoria v John Leck [2009] VSC 92

The Plaintiff, a former member of the Victorian Police sought compensation before the Magistrates Court for stress sustained as a result of his employment.

At trial, in finding for the Plaintiff the trial judge expressed concern about the proper interpretation of Section 82(A) in particular whether it allowed a combination of actions such as "transfer" and "discipline" to be considered in deciding whether the actions of the employer "wholly or predominantly" caused the stress.

The defendant argued that when "discipline" and "transfer" were combined together they were likely to outweigh the initial incidents as causal factors of the stress injury.

The actions listed in the sub-section 82(2A)(a) (transfer, demote discipline, redeploy, retrench, or dismiss) are separated by the word "or" which in ordinary construction has a disjunctive meaning.

The defendant argued that the word "or" in the above section ought to be interpreted to mean "or, or as well". This interpretation was justified on the grounds that it followed the purpose of the Act, namely to immunise certain classes of management action from a claim in compensation.

The Plaintiff argued that the disjunctive interpretation was contrary to the purpose of the Act.

The learned magistrate held that the "or" should be given its disjunctive meaning, and that whilst the plaintiff's injury arose wholly or predominantly from actions to discipline and transfer him, because it didn't arise from one or the other, the defence could not succeed,

Appeal

On appeal the appellant argued that the conjunctive approach was in accordance with Section 5 of the Act where "or" was used distributively. Furthermore it was argued that the legislative purpose of the Section is to preclude the payment of compensation in situations where the employer had taken reasonable action in a reasonable manner and as long as the stress was due wholly or predominantly to such actions.

The respondent argued that Section 82(1) of the Act contains a prima facie entitlement to compensation and that "transfer" and "discipline" were two distinct actions requiring clear language to be combined. Furthermore it was argued that "or" was used disjunctively in the key expression "wholly or predominantly".

Held

Smith J in the Supreme Court held that whilst the provision is designed to limit compensation in the case of a person who is otherwise entitled to compensation such limits are intended to provide adequate and just compensation to workers.

His Honour was of the view that arguments based on the potential consequences of each interpretation favoured the disjunctive approach,

• "... Where there is a cause of stress associated with work, other than the categories of management action, the disjunctive approach could in some circumstances create the result described by the appellant, the result said to favour the employee and alleged to be unfair to the employer. But it must again be emphasised that in this provision parliament was trying to draw a line and strike a balance, and it is not absurd or repugnant in legislation dealing with the compensation of workers, for Parliament to strike a balance that may favour the employee on occasions when its object is to provide a system for adequate and just compensation for injured workers."

On the interpretation of the word "or" His Honour stated that the word is extensively used in a disjunctive manner in the sub section and unless the context indicated otherwise "or" will normally be interpreted disjunctively. If Parliament had intended a conjunctive approach, it could have expressly stated so particularly as "or" was used disjunctively elsewhere in the section. His Honour held that the consequences of a conjunctive interpretation are that it,

• "... Would open up an undesirable situation... where the employer was otherwise liable to compensate could take steps to avoid liability by undertaking a series of ostensibly reasonable actions, the sum of which would predominate over the original cause of the employee stress. I suggest that that would not be difficult to achieve... it would not be difficult even in extreme cases of racial, gender or other unfair discrimination causing a stress illness for an employer to have it accepted that management actions were reasonable in all the circumstances even though they might well be motivated in fact by the same form of discrimination that caused the original stress. A conjunctive construction increases the opportunities of such behaviour. A disjunctive construction limits such opportunities."

The appeal was dismissed.