Public Sector Informant: Comcare appeal for repayment appears ill-advised and tone-deaf

WRITTEN BY John Wilson & Kieran Pender

In 2017, we wrote a column with a provocative title: “Does Comcare allow the Commonwealth to discriminate with impunity?” Our concern arose from an apparent legal uncertainty in the law governing the federal government’s workers’ compensation scheme. Fortunately, that uncertainty has now been resolved. Public servants can breathe a sigh of relief – or can they?

Because the Comcare scheme acts as a replacement for the ordinary legal principles governing personal injury, it contains a provision (section 44) to prevent double-dipping: You cannot gain compensation via Comcare for a workplace injury and then also sue the government in relation to the same injury. So far, so reasonable – and indeed most workers’ compensation schemes contain a similar provision.

However, the Comcare scheme does not provide any compensation for non-economic loss (such as hurt, humiliation and distress). Other than in cases of permanent impairment, where pre-determined amounts are paid, Comcare only extends to payment of lost wages, medical expenses and so on. The problem that prompted our 2017 column, and a follow-up last year, was how the prohibition on double-dipping intersects with legal regimes which do provide for non-economic loss – the most common, in the workplace context, being anti-discrimination law.

Say a public servant is sexually harassed at work (which, the data suggests, is unfortunately all too common). Or, perhaps they are discriminated against on the basis of their race, or a disability. The respective discrimination laws empower the public servant to sue the perpetrator of the discrimination and their agency, which is vicariously liable. Non-economic loss in such cases can range from $20,000 to $100,000 or more – particularly where the discrimination or harassment has a significant psychological impact.

It was clearly not the intent of the Comcare law to impede discrimination claims. But we had found in practice that APS agencies, via their lawyers, were seeking to use the section 44 “shield” in the Comcare scheme to minimise liability. Where public servants had lodged a Comcare claim, and subsequently threatened to sue for discrimination, they would be met by the assertion that they were barred. Or, even worse, an agency would settle a discrimination claim, and then Comcare would come knocking seeking repayment from the target of the discrimination (under a related provision, at section 48).

Such a situation came before the Federal Court this year, in the case of Friend v Comcare. The plaintiff, Kelly-Anne Friend, had worked at the Australian Federal Police, until she lodged a Comcare claim relating to workplace bullying and numerous incidents of sexual harassment. She lodged a disability and sex discrimination claim, which ultimately settled for $1.25 million – the large sum reflecting the severe impact of the conduct on Ms Friend (she subsequently told the court that “she had lost the career that she had loved and any future career”.)

In February this year, Comcare made a determination, under section 48, that Ms Friend was required to repay almost $700,000 to Comcare, being her medical expenses and incapacity payments made between 2013 and 2021. Ms Friend sought review of that decision. Before Justice Steven Rares, Comcare argued that Ms Friend’s settlement was “double dipping” of the kind the law was intended to prevent.

“Anti-discrimination laws were enacted to address the scourge of harassment and discrimination in the workplace.”

In a decision issued in late July, his Honour rejected Comcare’s arguments. “It is difficult to see a policy reason [that would support Comcare’s position]”, he wrote. “The Parliament is unlikely to have intended that the special remedy of damages … for commonplace reactions to unlawful discrimination, such as depression and anxiety caused by bullying, sexual harassment or discrimination on the basis of disability or sex, to be denied by the effect of [the Comcare scheme]. Emotional trauma is a likely consequence of unlawful discrimination and that trauma can manifest in many ways including in a personal injury to a person of the kinds Ms Friend complained of.”

This should have been the end of the matter. While the Friend case is the first to directly raise this issue in the Comcare context, in 2014 the Full Federal Court had decided a similar case, reaching the same conclusion, in the shipping industry. Just last year, the Court of Appeal had also reached the same result in relation to the NSW workers’ compensation scheme. There is now, one would think, a heavy weight of authority in support of Ms Friend’s position.

It also follows as a matter of principle: anti-discrimination laws were enacted to address the scourge of harassment and discrimination in the workplace. It is beyond belief that Parliament, despite explicitly binding the government to those laws, intended there to be a loophole in the Comcare system that would enable government agencies to discriminate with impunity. The effect of the position Comcare argued in Friend is that there is no legal difference between, say, an employee tripping over a power-cord in the office and breaking an arm, and being relentless sexually harassed by a colleague, or denied a promotion because the employee is a woman, or a person of colour. That, surely, cannot be right.

Yet in late August, Comcare lodged an appeal. The matter will be heard by three judges of the Federal Court later this year. Ms Friend’s saga rolls on. Given the heightened focus on efforts to recognise the corrosive impact of workplace harassment and eradicate it – indeed, Comcare recently hosted a public webinar on workplace harassment with Sex Discrimination Commissioner Kate Jenkins – the agency’s decision to persist in Friend appears ill-advised at best, and more than a little tone-deaf.

In our 2017 article, we noted that there was a real question whether reliance on the section 44 defence to a discrimination claim was consistent with the model litigant guidelines that all agencies are obliged to follow. “Accordingly, [we] implore government lawyers to think carefully before arguing this defence in the future.” That cautionary note evidently fell on deaf ears. We can only hope the Full Federal Court show Comcare that they have no friends pursuing this unmeritorious argument.

The above article was written for and published in the Canberra Times.

For all employment related queries or concerns, please contact our Employment Law & Investigations team at BAL Lawyers.

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