AC v Ad - [2009] NSWWCCPD 110

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:		AC v AD [2009] NSWWCCPD 110
APPELLANT:		AC
RESPONDENT:		AD
INSURER:		StateCover Mutual Limited
FILE NUMBER:		A1 – 8797/08
ARBITRATOR:	Ms M Trenerry
DATE OF ARBITRATOR’S DECISION:		12 May 2009
DATE OF APPEAL DECISION:		7 September 2009
SUBJECT MATTER OF DECISION:		Sections 11A, 38, 38A and 40 of the Workers Compensation Act 1987; causation of injury
PRESIDENTIAL MEMBER:		Deputy President Kevin O’Grady
REPRESENTATION:		Appellant:	Hicksons
Respondent:	White Barnes
ORDERS MADE ON APPEAL:		1. Paragraphs two and three of the Arbitrator’s decision dated 12 May 2009 are revoked and the following orders are made in their place:
“(2) The respondent is to pay the applicant weekly benefits pursuant to section 40 of the Workers Compensation Act 1987 as follows: $367.70 from 26 February 2008 to 31 March 2008 $374.90 from 1 April 2008 to 30 September 2008 $381.40 from 1 October 2008 to 31 March 2009 $389.10 from 1 April 2009 to date and continuing
(3) The respondent is to have credit in respect of payments of weekly benefits made during the period 27 October 2007 to 25 February 2008.”
2. Paragraphs one, four and five of the Arbitrator’s determination dated 12 May 2009 are confirmed.
3. The Arbitrator’s determination is to be further amended by the inclusion of the following order: “(6) Respondent to pay medical and hospital expenses (section 60) upon production of accounts or receipts.”
4. The appellant is to pay the worker’s costs of the appeal.

BACKGROUND TO THE APPEAL

On 9 June 2009 the appellant employer (‘AC’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 12 May 2009.

The Respondent to the Appeal is the worker (‘AD’).

The worker commenced employment with the appellant on 3 August 2005. Her position with the appellant was that of Chief Information Officer, a senior staff position (CIO). Her duties in that role involved the planning and direction of information management, policies and processes in consultation with senior management. In March 2007 certain organisational changes were effected in the workplace and the worker was assigned to Corporate Services and was required to report to the Corporate Services Manager (‘CSM’).

On 7 May 2007 the Manager Information Services (‘MIS’) commenced employment with the appellant. There is evidence that following the appointment of the MIS tension existed between that individual and the worker. That tension led in due course to considerable conflict and it is the worker’s case that the tension and conflict was brought about by reason of the MIS’s conduct.

During the second half of 2007 the worker had occasion to approach senior officers of the appellant concerning the MIS’s conduct. Those approached included the CSM and an unnamed Human Resources Manager. The worker has stated that, having regard to the MIS’s behaviour since his appointment, she had been “marginalised”. The worker encountered difficulties communicating with the MIS and little if any effective assistance was given by management to resolve the matters which had been raised by her.

On 24 September 2007 the worker was examining the structure of “Information Technology and Telecommunications” in the course of her routine work when, apparently by chance, she came across a folder which was the subject of “shared access”. That folder contained a memorandum apparently created by the MIS containing an allegation of a “security breach” and illegality on the part of the worker concerning access to records. At that time the worker also located a second memorandum again created by the MIS, which alleged a “security breach” by a fellow employee. The memorandum concerning the worker was addressed to the CSM and was dated 13 September 2007.

Following her discovery of the memorandum the worker on that day handed a letter to the CSM informing him that she had become aware of the contents of that document and gave a short explanation concerning relevant circumstances leading to her viewing of relevant documents. A request was made by the worker to the CSM to have the matter “cleared up ASAP”. The worker stated that she viewed the matter “very seriously”.

The CSM took steps on 24 September 2007 to brief PriceWaterhouse Coopers (‘PwC’) for the purpose of conducting an external investigation of the allegations contained in the memorandum created by the MIS. It seems that the appointment of PwC was approved by senior management on 28 September 2007.

The worker, on 28 September 2007 commenced her annual leave and travelled, as had previously been arranged, overseas. She returned to Australia on 18 October 2007 however did not return to work immediately because of illness. The worker, on 25 October 2007, was interviewed by PwC representatives concerning the allegations made by the MIS. It was at that time that the worker was informed that documents she had compiled and entrusted with her employer for presentation to PwC had not been handed to the investigators.

On 27 October 2007 the worker ceased work. She has not returned to work since that date and it is alleged that, by reason of injury received in the course of her employment, being a psychological injury, she has been and remains incapacitated for work.

A claim for workers compensation benefits was made by the worker and provisional payments of weekly benefits were made by the appellant’s insurer up until 15 February 2008. The worker had received notice of the insurer’s intention to terminate payments by letter dated 18 January 2008. In that correspondence the insurer, in suggested compliance with section 74 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) outlined matters that were in dispute, the decision that had been taken, the reasons for denial of liability and other matters. The section 74 notice included an enormous volume of documents which are now in evidence before the Commission and comprised no less than 5 volumes. The compilation of this material by the insurer was one step taken in what has become a paper war which has been conducted between the parties in the course of these proceedings and otherwise. Evidence which has been adduced in the present proceedings comprises no less than 10 volumes of documents.

The dispute between the parties concerning the worker’s entitlement to weekly benefits was referred to the Commission by the filing of an Application to Resolve a Dispute (‘Application’) on 4 November 2008. The date of the injury alleged by the worker is stated at Part 4 of that Application as being “in or after May including November 2007”. The injury is described as “psychological injury” and the manner in which the injury occurred is described as:

“Lack of respect and regard for the applicant in relation to the discharge of her obligations in accordance with her position description over a period of some five months and thereafter inappropriately conducted investigation as to alleged disciplinary matters including leading to an erroneous adverse conclusion.”

The Application came before an arbitrator for conciliation/arbitration on 12 February 2009 at which time it was part-heard as a contested matter and adjourned for further hearing to 27 March 2009. Following submissions made by counsel on behalf of each party the Arbitrator reserved her decision and a determination was made and published on 12 May 2009. A statement of reasons (‘Reasons’) accompanied the Certificate of Determination.

THE DECISION UNDER REVIEW

The ‘Certificate of Determination’, dated 12 May 2009 records the Arbitrator’s orders as follows:

“The Commission determines:

1. The Respondent to pay the Applicant weekly benefits pursuant to s.36 from 27 October 2007 to 25 February 2008 at the rate of $1,563.00.
2. The Respondent to pay the Applicant weekly benefits compensation pursuant to s.38 as follows:
·      $1250.80 for the period 26 February 2008 to 31 March 2008;
·      $1275.20 for the period 1 April 2008 to 30 September 2008;
·      $1297.28 for the period 1 October 2008 to 25 February 2009.
3. The Respondent to pay the Applicant weekly benefits compensation pursuant to s.40 from 26 February 2009 an [sic] ongoing at the rate of $275.45 per week.
4. The Respondent to pay the Applicant’s costs as agreed or assessed.
5. For the purposes of Schedule 6 of the Workers Compensation Regulation 2003 I certify this matter as complex pursuant to Table 4, Item 4 and certify that there is to be a 30% increase of the costs otherwise available for the Respondent and the Applicant at Item F of Table 1 for the following reason:
a)The claim was a psychological injury where a number of legal, factual and medical issues were put into dispute including nature and conditions of employment, s 9A, s 11A and the interpretation of aspects of weekly benefits entitlements. This matter in my view reflects a matter at its most complex.”

ISSUES IN DISPUTE

The documentation which accompanies the appellant’s application contains 21 separate paragraphs under the heading “Grounds of Appeal”. Those paragraphs enumerate a number of identified findings made by the Arbitrator in the course of her determination of the dispute, each of which is challenged by the appellant. A number of those “Grounds” suggest error on the part of the Arbitrator concerning her application to the facts of the provisions of section 11A, section 38 and section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’). The challenge to the Arbitrator’s findings and ultimate determination constitutes a reiteration of a number of matters which were argued before the Arbitrator. In its preliminary submissions the appellant, following reference to the decisions of the Court of Appeal in State Transit Authority of New South Wales v Chemler [2007] NSWCA 249 (‘Chemler’) and Sapina v Coles Myer Limited [2009] NSWCA 71 (‘Sapina’) has included a “request” that on appeal the Arbitrator’s determination should be substituted with “the true and correct view” of the matter. It may be assumed that such “request” is founded upon the characterisation of this appeal as being a review on the merits as discussed in each of Chemler and Sapina.

ON THE PAPERS REVIEW

Section 354(6) of the 1998 Act provides:

“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

The appellant has submitted that the appropriate course is to determine this appeal “on the papers”. The worker’s representatives in written submissions which accompany the notice of opposition to the appeal argue that, by reason of the complexity of the matter, the voluminous material which is in evidence before the Commission, the character of the appellant’s submissions and legal complexity which attends the consideration of a number of matters including the proper construction and application of section 38 of the 1987 Act, there should be an oral hearing.

Having regard to Practice Directions Numbers 1 and 6, and the documents that are before me, I am satisfied that I have sufficient information to proceed “on the papers”, without holding a conference or formal hearing, and that this is the appropriate course in the circumstances.

LEAVE

Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.

The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.

The amount of compensation at issue on appeal is such that it meets the threshold requirements of section 352(2) of the 1998 Act which must be met before a grant of leave to appeal may be made by the Commission.

The requirements of section 352(2) and (4) having been satisfied and having regard to the subject matter of the appeal and the arguments raised I order that leave be granted to the appellant to appeal to the Commission.

FRESH EVIDENCE

‘Fresh evidence’ on appeal is governed by section 352(6) of the 1998 Act, which provides as follows:

“(6) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.”

Practice Direction No.6 sets out the process for seeking leave of the Commission to adduce ‘new evidence’ on appeal. It provides as follows:

“FRESH EVIDENCE AND/OR ADDITIONAL EVIDENCE
Each application to introduce fresh evidence or additional evidence on appeal will be considered on its own facts and circumstances and in the context of the Commission’s obligation to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (see section 354 of the 1998 Act).
In the exercise of its discretion to admit fresh evidence or further evidence on appeal the Commission will have regard to, and the parties should make submissions on, whether:
·it can be demonstrated that the evidence could not with reasonable diligence have been obtained by the party and tendered in proceedings before the Arbitrator;
·the evidence is credible;
·there is a high degree of probability that there would have been a different decision if the evidence had been admitted at the arbitration, and/or
·it is just to admit the evidence in all the circumstances of the individual case.

Parties should be aware that a review under section 352 of the 1998 Act is not a rehearing or hearing de novo. The original arbitration should not be treated as a preliminary hearing and all relevant evidence should be called at that time.”

Practice Direction No.6 also provides that if fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against is relied upon, parties must include:

·a schedule of the fresh or additional evidence;
·a copy of the fresh or additional evidence;
·a brief outline of the fresh or additional evidence and the reasons why it was not given in proceedings before the Arbitrator, and
·submissions on why the fresh or additional evidence should be admitted, or rejected as the case may be.

Where a party seeks leave to rely on fresh or additional evidence in relation to the decision appealed against, that party must serve a copy of the fresh or additional evidence on the other parties to the dispute when serving the Application or Notice of Opposition.

The appellant seeks leave to adduce additional evidence on this appeal. That application is made in respect of a number of documents which accompanied the application concerning the appeal. That evidence is summarised and particularised in a nine paragraph document which accompanied the application. It is submitted that the documents relate to issues raised concerning the worker’s claim to be entitled to the benefit of the provisions of section 38 of the 1987 Act which claim, it is submitted, was not particularised in the original Application and was raised at a very late stage in proceedings. It is further put that the worker had failed to provide particulars concerning the claim brought pursuant to that section despite a request having been made on behalf of the appellant following a direction by the Arbitrator shortly before completion of the original Application being heard by her. The documents are as follows:

1.    Signed copy of correspondence dated 18 November 2008 concerning “suitable employment”. It is sought to substitute this signed copy for an unsigned copy which had been attached to the appellant’s Reply.
2.    Copy email to the CSM, Manager H.R. and General Counsel dated 20 November 2008, 10.20pm.
3.    Copy correspondence from the worker dated 21 November 2008 with copy of express post envelope said to have been received by the appellant on 21 November 2008.
4.    Statement by the CSM dated 9 June 2009.

The worker in her notice of opposition to the appeal opposes the admission of the appellant’s additional evidence and has sought leave to rely upon what is described as “fresh evidence” being a further statement by the worker dated 24 July 2009. It is put at paragraph 22 of submissions which accompany that notice, that the worker seeks to rely upon that statement “in the event that [the appellant’s additional evidence] is allowed”.

The additional evidence which the appellant seeks to have adduced on this appeal concerns the timing of receipt by the appellant of notice from the worker concerning suggested “repudiation” of the employment contract. The worker’s statement raises additional matters concerning communication between herself and the appellant concerning such “repudiation”.

Each party acknowledges in submissions both before the Arbitrator and on this appeal that facts concerning termination of employment and offers of suitable employment are likely to be relevant concerning the question of whether or not the worker has an entitlement pursuant to section 38. The claim pursuant to that section was raised at a late stage of the proceedings however the record of proceedings before the Commission does not reveal with any certainty when, in fact, that occurred. It is not disputed by the worker that she has not, through her solicitors, provided particulars of such claim as requested in correspondence by those representing the appellant.

Having regard to the nature of the dispute and the arguments raised I consider the interests of justice require that those documents which each party seeks to adduce by way of “fresh evidence” should be admitted on this appeal and I so order. The content of those documents is addressed more fully hereunder.

PRELIMINARY MATTERS

The determination of this appeal is, to an extent, complicated by reason of matters raised by the worker in the course of submissions which accompany her notice of opposition to the appeal. Between [36] and [39] of those submissions the worker appears to raise a challenge to the Arbitrator’s determination of the question of her entitlement to weekly payments. It is asserted that the only “proper basis” for any review of the worker’s entitlement pursuant to section 40 is “…to make the payments at the maximum rate for an injured worker with no dependants.” Whilst the submissions under this heading lack clarity, it appears that the worker is challenging the Arbitrator’s determination as to the quantum of her entitlement from 26 February 2009 to date. Whilst this challenge is enunciated in submissions there has been no appeal brought by the worker in respect of the Arbitrator’s determination.

The appellant has challenged the Arbitrator’s quantification of the award for weekly payments. Consideration of the merits of arguments raised by each party concerning the award and the Arbitrator’s reasoning in relation to same are addressed below.

EVIDENCE

The documentary evidence which was before the Arbitrator is summarised at paragraph 11(i)-(x) of Reasons. There was no oral evidence given before the Arbitrator.

It must be stated at the outset that the volume of documentary evidence before the Commission in this matter is huge. It is clear that neither party has attempted to limit the inclusion of documents to those which are truly of relevance to the issues in dispute. The history of dealings between the appellant and the worker since the commencement of her employment up until November 2008 have involved not only the evolution of a large and complex personnel file relative to the worker’s employment but also voluminous documentation relating to investigations instituted by the appellant concerning the worker’s conduct including that by PwC, a review procedure concerning the outcome of the investigation which was conducted by PwC, an Application for Determination of a Workplace Injury Management Dispute which was heard by a delegate of the Registrar of the Commission and a mediation conducted by the Commission concerning certain aspects of the dispute between the parties. It seems that all of those documents have found their way into evidence before the Arbitrator on the hearing of the subject Application.

Procedure before the Commission is regulated in part by the provisions of section 354 of the 1998 Act. That section provides that proceedings are to be conducted with as little formality and technicality as the proper consideration of the matter permits (section 354(1)). The Commission is not bound by the rules of evidence (section 354(2)). The objective of the Commission is to provide resolution of disputes with a minimum of cost and delay. The failure by the parties in the present matter to exercise appropriate judgment and discretion in the manner of presentation of their respective cases tends to impede the prospect of the Commission fulfilling its objectives as summarised above. The parties’ failure to limit in any respect the volume of the documentary evidence is to be condemned as inappropriate. There is before the Commission a transcript of proceedings which were recorded before the Arbitrator on 12 February 2009 and 27 March 2009 (‘transcript’). That transcript records the lengthy submissions put on behalf of each party by both counsel. In addition to the oral submissions there are written submissions which have been made available to the Arbitrator and a detailed chronology. Those submissions necessarily include reference to various portions of the evidence however little effort has been made to highlight those documents relied upon among the vast array of material before the Commission.

The relationship between the worker and the MIS following his appointment in May 2007 is of fundamental significance concerning the allegations of injury which are the subject of the Arbitrator’s determination. A number of statements have been made by the worker concerning this relationship and they are before the Commission. There is one statement by the MIS dated 17 June 2008 which is also in evidence before the Commission.

The most comprehensive statement by the worker which concerns circumstances at the worker’s place of employment up until late 2007 is that which is dated 2 June 2008. It is clear that the Arbitrator has made reference to that statement when summarising the worker’s evidence. That summary appears between [17] and [30] of Reasons. I note in passing that it appears that the Arbitrator has inadvertently referred to an earlier statement dated 17 January 2008 as being the basis of her summary (at [17]). The statement is 117 paragraphs in length. I have considered both the evidence and the Arbitrator’s thorough summary and have concluded that the Arbitrator’s statement of relevant matters is in accordance with the evidence. In the circumstances I gratefully acknowledge and adopt that summary as found between those paragraphs earlier enumerated.

The general thrust of the worker’s evidence is that following the appointment of the MIS she formed an unfavourable impression of him, however held herself out as available for consultation. It is stated that there was no response to the initiative taken by her. The MIS’s conduct was such that she felt sidelined or ignored and a number of initiatives taken by the MIS are noted by the worker which, she states, caused her to feel that the MIS was being antagonistic, bullying and undermining. An incident of particular significance appears from the worker’s evidence to have occurred on 24 September 2007 when she discovered a record of a memorandum (email) having been sent by the MIS to the CSM on 13 September 2007. That memorandum, which is in evidence, detailed allegations made by the MIS of improper conduct on the part of the worker and another employee. The allegation concerned access to electronic records. The worker states that upon reading the email she was “appalled” and that she had then experienced a “gut wrenching” sensation. She felt her stomach lurch and had difficulty focusing on the wording in the email. She states that she felt physically sick and thought that she was about to vomit. The worker notes in her statement that the email in question bears the same date on which she had submitted a document to the CSM which sought to address communication difficulties she had experienced with the MIS. As noted above at [7] the worker raised the subject of the existence of this memorandum directly with the CSM.

The evidence of the MIS found in his statement dated 17 June 2008 is summarised by the Arbitrator between [48] and [52] of Reasons. I respectfully agree with the detail of that summary and gratefully adopt it for the purposes of this appeal. The general thrust of the MIS’s evidence is that he was unaware that there were any “issues” between himself and the worker and he asserts that he addressed her professionally and was not rude to her.

Records of the appellant which are before the Commission establish that on 24 September 2007 steps were taken to brief PwC concerning an external investigation of the allegations which were contained in the memorandum created by the MIS on 13 September 2007. That organisation was also invited to give a quotation as to the cost of such investigation. The evidence establishes that the appointment of PwC was approved by management on 28 September 2007. Documents held by PwC include a memorandum dated 18 September 2007 from the CSM to Manager H.R., and General Counsel, concerning investigation of the MIS’s memos.

On the date that PwC were appointed the worker commenced annual leave and travelled overseas. This had been pre-arranged. The worker was to return to her duties on 19 October 2007 however the evidence establishes that she did not, by reason of illness, return immediately. It is clear on the evidence that she returned to work no later than 25 October 2007 and on that day was interviewed by PwC in relation to the subject inquiry. It was then established by the worker that documents she had compiled for the purpose of presenting her side of the story concerning the allegations had not been forwarded to PwC. There was no dispute with respect to this matter and it was accepted by the appellant’s general counsel that a “clerical error” had prevented the forwarding of those documents. The evidence establishes that the worker ceased work on 27 October 2007 by reason of alleged incapacity and has not worked since.

The worker first sought treatment with respect to her symptoms arising from the alleged psychological injury on 29 October 2007 when she consulted her general practitioner Associate Professor Marilyn McMurchie. History recorded by Dr McMurchie on that occasion was “insomnia 6 months with early morning waking”. The worker relied upon a report of Dr McMurchie dated 14 April 2008 which recorded the worker’s attendance on 29 October 2007 and that the worker presented in a “distressed state with a complex history of workplace events which had resulted in worsening anxiety and associated insomnia with poor concentration and rumination”. It was also recorded that the worker felt “frightened being away from her home”. That practitioner diagnosed a major depressive disorder, reactive to her situation and attributed her condition to “the work situation”.

The parties have tendered a number of reports from medical practitioners, psychologists and a rehabilitation consultant. Those practitioners include Dr Lana Kossoff (psychiatrist), Dr Bruce Westmore (psychiatrist), Dr Louise Crowle (occupational physician), Ms Gillian Llyod (psychologist), Ms Sallie Strickland (rehabilitation consultant), Professor Kay Willhelm (psychiatrist) and Mr Thomas O’Neill (psychologist). The contents of the various reports has been thoroughly summarised by the Arbitrator between [56] and [71] of Reasons. Again I gratefully adopt the summary appearing in the Arbitrator’s determination as being a fair summary of that evidence.

It is not in dispute between the parties that the worker has received a psychological injury arising out of or in the course of her employment with the appellant. The substantial issue which was raised before the Arbitrator concerned identification of the timing of such injury. The importance of the timing of injury arises by reason of the suggested operation of the provisions of section 11A of the 1987 Act. In the circumstances the material recorded in the various medical reports is of particular significance and it is proposed to refer to relevant detail in the course of discussion concerning the issues raised on this appeal.

DISCUSSION AND FINDINGS

The first three grounds relied on by the appellant challenge the Arbitrator’s finding that the worker suffered psychological injury “prior to October 2007” (Ground 1); the finding that the worker suffered psychological injury as a result of the “nature and conditions of her employment” in the “six months prior to her being certified unfit” in October 2007 and the finding that the worker suffered sleeplessness, anxiety, weight loss and lack of energy and that “these demonstrated physiological changes sufficient to show on the balance of probabilities that psychological injury has occurred from about mid 2007…”.

The Arbitrator between [72] and [99] of Reasons has expressed a careful and detailed analysis of both the lay and medical evidence which was before the Commission. Particular attention is given in the course of reasons to the numerous complaints made by the worker concerning the conduct of the MIS. The Arbitrator excluded a number of matters raised by the worker as being not of sufficient relevance to take into consideration (at [96] of Reasons). The Arbitrator has concluded that the behaviour of the MIS “can be seen to be intimidating and undermining” (at [98] of Reasons). The Arbitrator had earlier concluded that there was substance to a number of the complaints raised by the worker concerning the conduct of the MIS.

The question as to whether the MIS’s conduct had so affected the worker that it could be said that she had suffered injury within the meaning of the 1987 Act during the “six months” preceding treatment of the worker by Dr McMurchie is addressed at [101] to [103] of Reasons. At [101] the Arbitrator summarises the expert evidence with particular emphasis upon relevant history of complaints and symptoms during those months. It is there stated:

“Dr McMurchie refers to insomnia over six months prior to her presenting on the 29 October 2007. Little weight can be placed on that comment on its own. However [the worker] refers to the ‘personality issue’ between herself and another staff member. Her language is very emotive however on the whole it is supportive of [the worker] feeling deliberately undermined and that this has been going on for some time. Dr Kossoff who is relied on by the Respondent also refers to problems sleeping and that her psychological problems commenced in April or May. Dr Kossoff also reports that [the worker] felt exhausted, lost weight and experienced nausea as well as suffering severe anxiety. Although Dr Kossoff expresses the view that it is possible s.11A is applicable she acknowledges that [the worker] developed an Adjustment Disorder in the context of the nature and conditions of her employment prior to the disciplinary procedures and continued in her full time role despite these symptoms. Dr Wilhelm suggest[s[ that her problems stem from an interpersonal situation and Dr Westmore refers to the events referred to above and accepts that her psychological symptoms commenced from May 2007 when she was having trouble sleeping. Dr Westmore also refers to [the worker] feeling tired and anxious, that she lost weight and had no energy. Dr Westmore accepts that her depressive illness and discrete anxiety disorder are related to workplace difficulties. Sally Strickland also accepts that [the worker’s] injury developed over a period of about 6 months and resulted from a number of issues. Dr O’Neill accepts that [the worker] became psychologically unwell by late October 2007 but in his view the primary catalyst were the events from when [the worker] found the memo alleging she had breached professional conduct. He does accept some pre-existing anxiety and depression proneness prior to that. Ms Lloyd appears to accept that it is the discovery of the memo which caused the stress, but she doesn’t appear to have taken a history of events prior to that incident.”

The Arbitrator at [102] proceeds to address argument as advanced by the appellant founded upon the proposition that there had been no treatment, incapacity or diagnosis made prior to October 2007. The appellant’s argument was rejected by the Arbitrator having regard to the state of the authorities as cited at that paragraph and having regard to her conclusion that, prior to October 2007, the worker had suffered from anxiety, weight loss, sleeplessness and lack of energy. It was found such symptoms were evidence of a physiological manifestation of a psychological injury.

As stated above the appellant seeks on this appeal to agitate yet again those arguments which were raised before the Arbitrator. The appellant’s approach to the defence of this claim is founded upon an argument that there was no injury suffered prior to, at the earliest, 24 September 2007 being the date the worker found the MIS’s memorandum dated 13 September 2007. It is the appellant’s argument that the evidence does not establish that the worker’s nervous system had been so affected that it may be said “that a physiological effect and not a mere emotional impulse is produced” see Anderson Meat Packing Company Pty Ltd v Giacomantonio [1973] WCR 3 (per Jacobs and Hope JJA at 7) (‘Anderson’).

The appellant seeks to reinforce its argument by reference to that line of cases which endorses views expressed by the majority in Anderson. Those cases referred to include Austin v Director General of Education (1994) 10 NSWCCR 373 (‘Austin’) and Zinc Corporation Ltd v Scarce (1995) 12 NSWCCR 566 (‘Scarce’).

In the present matter the Arbitrator has found as a matter of fact that the worker suffered physiological effects as a result of the circumstances of her employment as summarised by her in the course of Reasons. Those effects have been described as noted in [49] above and those findings are supported by the medical evidence. The fact that that medical evidence is founded upon histories taken in and after October 2007 is not to the point. The Arbitrator has accepted both lay and medical evidence concerning the symptoms suffered by the worker during that period of months in 2007 following the employment of the MIS and has concluded that injury within the meaning of the Act has been received. That is a conclusion with which I respectfully agree and I reject the appellant’s argument raised challenging that aspect of the Arbitrator’s reasoning process.

The “grounds” enumerated 4, 6 and 7 challenge the Arbitrator’s findings with respect to those matters argued on behalf of the appellant concerning the proper application of section 11A of the 1987 Act. Complaint is made (at 4) that the Arbitrator “failed” to find that a psychological injury was the result of actions taken or proposed to be taken by or on behalf of the employer with respect to discipline in October 2007. The Arbitrator’s finding as stated at [110] of Reasons is in the following terms:

“…I accept that the discovery of the memo and the subsequent action of the employer triggered her psychological condition which was caused by the cumulative effect of her dysfunctional relationship with [the MIS] and her perception that she was being harassed, intimidated and undermined.”

It should be noted that the appellant states (at page 12 of submissions in support of this appeal):

“It is not contested that the worker suffered psychological injury as a result of the steps taken to initiate disciplinary proceedings against her in September 2007.”

The appellant, having made the above mentioned concession, relies upon the provisions of section 11A as being a bar to recovery by the worker of benefits in respect of any proven incapacity. The worker has not seriously challenged the proposition that the investigation process undertaken by PwC falls within the statutory description of “…action taken or proposed to be taken…with respect to …discipline…” as appears in section 11A. It is her case that the injury had been received earlier than such action and disputes that such action was, in all the circumstances, “reasonable”.

There can be little doubt on the evidence that the worker’s discovery of the MIS’s memo on 24 September 2007 was of particular significance concerning a heightening and exacerbation of any anxiety and associated symptoms earlier experienced. I have already expressed my agreement with the Arbitrator that injury within the meaning of the 1987 Act had occurred prior to that date. However I am unable to accept the Arbitrator’s analysis of the evidence and conclusions as noted in [53] above. There is little doubt that the discovery of the memo was a significant factor, being an element of the worker’s employment conditions, which contributed to the causation of her psychological injury. The Arbitrator’s use of the term “triggered” does not address the fundamental question of causation.

I consider that the evidence clearly establishes that the discovery by the worker of the MIS’s memo was a causative factor, along with the prolonged interpersonal difficulties experienced with the MIS during the antecedent months, of the psychological injury suffered by the worker which resulted in incapacity from late October 2007 and thereafter.

The evidence establishes that the MIS’s communication to the CSM had been sent by email on 13 September 2007. There is no evidence that any steps had been taken by the employer with respect to the content of that memorandum prior to its contents coming to the notice of the worker other than the suggested communication between the CSM and other senior staff. As noted above the worker first became aware of the existence of the memorandum when she came across it in a file to which staff generally had access. It is, in my view, of significance that once the worker conveyed to the employer her knowledge of the existence of that memorandum steps were immediately taken to brief PwC. It is the appellant’s case that the MIS’s memorandum and the worker’s discovery of its contents is in some way part and parcel of the disciplinary action relied upon as founding the defence raised pursuant to section 11A. In support of that argument the appellant relies upon Yeo v Western Sydney Area Health Service t/as Cumberland Hospital [1999] NSWCC 1 (‘Yeo’) where it was stated by Neilson J at [48]:

“The words in s11A(1)(b) which refer to a number of categories should include all that is reasonably necessary or incidental to each of the activities referred to in it.”

In the matter of Yeo the claimant became psychiatrically disturbed at or shortly after the time details of a complaint by a third party concerning his behaviour were conveyed to him by his superior at the workplace. The communication of that complaint was found to be part of the “disciplinary process” and was included in the expression “action…with respect to discipline” as it appears in section 11A. On the present facts there has been no relevant “communication” by the employer to the worker of the contents of the MIS’s memorandum. It was found, it seems, by chance by the worker herself. At that time there was no disciplinary process in place. I infer that the reference of the matter to PwC took place by way of response to the worker’s communication outlining her serious concern about the contents of the document. The present facts are distinguishable from those of Yeo and I conclude that the creation of that document and the worker’s discovery of it does not form part of any disciplinary action taken or proposed to be taken by the appellant. If I am wrong in so concluding I note my further conclusion that the discovery of the memorandum by the worker occurred as a result of a failure on the part of the appellant to act reasonably in relation to the MIS’s original communication made on 13 September 2007. In those circumstances the worker’s acquisition of knowledge of the contents of the memorandum and its immediate and ongoing consequences so far as her mental health is concerned occurred not wholly or predominately as a result of reasonable action with respect to discipline.

It may be seen that, upon review of the evidence, I have reached a conclusion that the Arbitrator has erred in her approach to the evidence concerning events which occurred on 24 September 2007 at the worker’s place of employment. The consequence of my expressed difference of view is addressed below.

The appellant’s “ground” number “5” states:

“Failure to find that the workplace interactions between mid 2007 and October 2007 may have contained events which predisposed the worker to later injury that did not themselves constitute injury.”

I have dealt with the Arbitrator’s findings with respect to the worker’s allegation of injury having occurred prior to discovery of the MIS’s memorandum above. The appellant’s complaint as noted above cannot constitute a ground of appeal. I imply that the complaint suggests error on the part of the Arbitrator in the process of her determination of relevant facts. As stated I agree with the Arbitrator’s conclusions and the appellant’s suggestion of error is rejected.

The appellant’s “grounds” numbered 8-15 inclusive set forth complaints concerning the suggested failure on the part of the Arbitrator to make certain findings. Those matters enumerated cannot be characterised as grounds of appeal. The matters raised in those paragraphs appear to challenge factual findings made by the Arbitrator with respect to the worker’s claim pursuant to section 38 (and in some respects section 40) as well as challenge to the manner in which relevant principle has been applied.

It is, in my view, important to examine the Arbitrator’s findings with respect to incapacity before any attempt is made to determine the merits or otherwise of those complaints raised by the appellant concerning the Arbitrator’s reasoning process which led to her entering an award in favour of the worker pursuant to section 38.

The question of incapacity is, to an extent, dealt with by the Arbitrator between [113] and [119]. The Arbitrator summarises the medical evidence before her which addressed the question of incapacity. I respectfully agree with the summary made by the Arbitrator of that evidence and gratefully adopt her analysis as stated in the course of Reasons. It is noted by the Arbitrator that the worker was first certified as being fit for suitable duties on 25 February 2008. That certification was expressed by Dr McMurchie. The Arbitrator proceeded (at [118] of Reasons) to find that “…there is no evidence before me that [the worker] was other than totally incapacitated” during the period 27 October 2007 to 25 February 2008. That is a conclusion with which I agree and I note that there has been no serious challenge raised by the appellant either before the Arbitrator or on this appeal concerning that question.

The Arbitrator proceeds to address the question of the worker’s entitlement or otherwise to weekly benefits pursuant to section 38 of the 1987 Act. This exercise is pursued by the Arbitrator without there being an express finding as to the existence or otherwise of incapacity beyond 25 February 2008 nor as to the character of any such incapacity. The fact that the evidence is examined by her in the context of the worker’s claim belatedly made in respect of an entitlement pursuant to section 38, implies necessarily that she has concluded that the worker was from 25 February 2008 partially incapacitated. It should again be noted that the appellant has not either before the Arbitrator or on this appeal argued that the worker had recovered from the incapacitating effects of her psychological injury nor, in particular, has it been suggested she has not suffered ongoing partial incapacity. Having regard to the state of the medical evidence concerning her capacity for work it is reasonable to conclude that the worker has been partially incapacitated since 26 February 2008 and I so find.

The Arbitrator, following a detailed discussion of the evidence relevant to the worker’s claim pursuant to section 38 concluded (at [133] of Reasons) that the worker “…was entitled to payment pursuant to s38 for the period 26 February 2008 to 25 February 2009 at total of 52 weeks.”

The worker in her notice of opposition to this appeal seeks to support the Arbitrator’s conclusion concerning entitlement pursuant to section 38 however there is an acknowledgement by her in the course of submissions of the existence of conflict of authority to be found when contrasting the decisions of Eyeington v New England Leather Pty Ltd (Compensation Court 2719/96 Duck J, 25 October 1996, unreported) (‘Eyeington’) and Aughterlony v Hydrotech Scientific Services 15 NSWCCR 587 (‘Aughterlony’), relevant to quantum of entitlement under that section.

A worker’s entitlement to “special initial payments” whilst partially incapacitated is regulated by the provisions of section 38 and section 38A of the 1987 Act. The basis of such entitlement is prescribed by section 38(1) which provides:

“(1) Entitlement. If:
(a)a worker is partially incapacitated for work as a result of an injury, and

(b) the worker is not suitably employed during any period of that partial incapacity for work,
the worker is to be compensated in accordance with this section during each such period as if the worker’s incapacity for work were total.”

The evidence of Dr McMurchie is that the worker has, since late February 2008, been fit for suitable duties, working on restricted hours working from home. Dr McMurchie observes in her report that, following consultation with Ms Strickland from Procare, part-time work from home was a reasonable avenue to be explored but that such was not accepted by the appellant. The evidence establishes that the appellant has at relevant times offered, what it states to be, suitable duties to be performed at the appellant’s premises. The worker has declined to accept such offer.

Given the opposing stance adopted by the parties with respect to a return to work on suitable duties an assessment and recommendation by the Registrar of the Commission was sought pursuant to section 307 of the 1998 Act. That application was heard by Mr John Cahill, delegate of the Registrar. Mr Cahill’s recommendation was published on 9 July 2008. That publication followed the preparation of a report by Dr Louise Crowle whose report dated 18 June 2008 was provided to Mr Cahill and the parties. Dr Crowle stated, in part, in her report:

“I am not convinced that a period working from home after some eight months off work will positively facilitate [the worker’s] upgraded return to work at [the appellant]. Additionally the employer did not identify suitable and meaningful work for [the worker] that could be performed at home…”.

Mr Cahill’s recommendation was as follows:

“The Registrar Recommends:
1.That working from home is not to form part of [the worker’s] return-to-work plan both now and in the future.
2.That [the appellant is] to implement arrangements to accommodate [the worker’s] workstation location in her return to work on different floor away from the IT area (and away from where current direct line manager is located) and if required by [the worker] on different floor to HR.
3.That [the appellant], in consultation with [the worker] and her nominated treating doctor, Dr. McMurchie, facilitate a graded return to work as follows:
(a)   [the worker] within 14 days of this recommendation being fully briefed on all employer projects to fully understand current status.
(b)   [the worker] within 7 days of the event in (a) above to attend project team meetings and to commence consultation with other staff to fully understand current project status, issues, etc.
(c)   [the worker] within 7 days of the event in (b) above to confirm future priorities and actions with Manager Information Systems for ongoing progression to her pre-injury position.

The Registrar orders:
4. That the Respondent pay the Applicant’s costs as agreed or assessed.”

The recommendation made by the Registrar as set out above was amended following referral of the matter to an arbitrator of the Commission. It appears that that amendment was made by consent and a Certificate of Determination issued on 26 September 2008. That Certificate included the following notation:

“1. That the Registrar’s recommendations of 9 July 2008 be amended to provide:
(a)That working from home is not to form part of [the worker’s] return to work plan both now and in the future.

(b)That mediation be undertaken between [the worker], [the CSM] and [the MIS].”

Mediation was conducted by the same Arbitrator who ultimately determined the present dispute. That mediation concluded on 26 September 2008. No resolution of the dispute concerning the worker’s return to work was achieved.

The appellant argued before the Arbitrator that the outcome of the workplace dispute proceedings conducted before Mr Cahill and his ultimate recommendations some how bound the Arbitrator to reach a similar conclusion as Mr Cahill concerning the inappropriate limitation imposed on return to work being that such work be performed at the worker’s home. That argument was rejected by the Arbitrator (at [120] of Reasons). I consider that such rejection was correct. There had been no final determination of any issue in dispute between the parties made by Mr Cahill and the appellant’s argument, which appears to be founded upon the principles of stare decisis, has no force. The question remains as to whether the Arbitrator’s conclusion that the worker was entitled to the benefit of section 38 was correct. The Arbitrator rejected the appellant’s argument that the worker was not “ready willing and able” to accept an offer of suitable employment and also rejected the argument advanced by the appellant that there was no “mutuality” between the parties concerning the worker’s resumption of work performing suitable duties.

That the worker at relevant times was partially incapacitated for work as a result of the subject injury and was not suitably employed in terms of section 38(1) is not in issue between the parties. The worker is only entitled to the benefit of that provision if compliance with section 38(4) is established. That subsection provides:

“(4) Worker to seek suitable employment. Compensation is not payable to a worker in accordance with this section during any period unless the worker is seeking suitable employment during that period (as determined in accordance with section 38A).”

Section 38A(2)(a) provides that a worker is not to be regarded as seeking suitable employment unless the worker is ready willing and able to accept an offer of suitable employment from the employer. That subsection makes provision for other requirements of the worker to found entitlement to benefits pursuant to section 38. The Arbitrator deals with this question at [124] of Reasons. Reference is made by the Arbitrator to the evidence of Dr McMurchie concerning part-time work to be performed at home, the refusal of the appellant to accept “this way forward”, correspondence from the worker’s solicitors referring to the worker’s certification as being fit for part-time work from home and seeking consideration of her request, a medical certificate dated 29 February 2008 and then proceeds to find that the worker “is ready willing and able to accept an offer of suitable employment.”

The appellant asserts that it has at all relevant times been willing to make available work within the worker’s capacity as certified however that such work should be performed at its corporate headquarters. It has expressly refused to afford the worker the opportunity of working at home. The questions arise as to whether the offer of work made by the employer was in respect of “suitable employment” and if so whether the worker was ready willing and able to accept such an offer. This question has not been addressed by the Arbitrator and in the circumstances a review of the relevant facts and principles is required.

The evidence of Dr McMurchie, Ms Lloyd and Ms Strickland support the worker’s proposition that suitable work should be resumed at her home, not the workplace. Dr Westmore in his report of 21 July 2008 expressed concern with respect to the worker’s prognosis “…particularly in relation to her ability to return to the workplace with this particular employer.”

The practitioners Mr O’Neill, Ms Crowle and Dr Westmore consider part-time employment to be within the capacity of the worker without the precondition that such be performed at her home. Both Mr O’Neill and Ms Crowle express the view that such limitation, that is working from home, was not in the interests of the worker’s rehabilitation. Dr Kossoff in her report dated 15 July 2008 states:

“Given the outstanding issues occurring in the workplace, which do require mediation and address (I understand that [the worker] has received documentation from the Commission regarding mediation which she is happy to attend), I believe she is incapable to return to her substantive position as Chief Information Officer at [the appellant]. I do believe however that if a satisfactory outcome regarding the allegations and issues raised occurs, and an appropriate return to work plan is finalised, that [the worker] would be fit to return to her pre-injury duties initially two days per week (she is probably going to find it difficult to work with the MIS). I understand from a report written by Dr Louise Crowle, Occupational Physician, in discussions with the employer, that the employer was prepared to be flexible regarding timeframes of upgrade or working activities, including a mediation process as re-establishing working relationships with colleagues. With respect to the physical environment, the employer had a number of possible options of workstation location which could include accommodating [the worker] in a workstation on different floors away from the IT area. This flexible attitude of the employer should be of benefit in assisting the return to work process. If there is successful reintegration into the workplace, I believe that she would be fit to resume her full time substantive duties within three months of the commencement of the return to work process.”

Having regard to the totality of the evidence I am inclined to accept the view as expressed by those practitioners who consider that an appropriate return to work regime would involve the worker’s attendance at her workplace. The matters addressed by Dr Kossoff in her report as noted above indicate that flexibility on the part of the appellant concerning arrangements at the workplace would facilitate a “reintegration”. It may be seen that I have reached a view similar to that expressed by Mr Cahill in his recommendation when dealing with the Workplace dispute in September 2008. I conclude that the work offered by the appellant to the worker is such that it is “suitable employment” having regard to the nature of the worker’s incapacity and all relevant circumstances. That she has been unwilling to accept that work is patently clear on the evidence. Such unwillingness to accept an offer of such suitable employment disentitles the worker to the benefit of the operation of section 38.

It may be seen that I have reached a conclusion that the Arbitrator has erred in finding that the worker is entitled to payment of compensation in accordance with the provisions of section 38. In the circumstances the Arbitrator’s orders founded upon her finding require revocation. It is thus unnecessary to determine those questions which relate to the timing and giving of notice by the worker to the appellant concerning termination of her employment contract upon the basis of suggested repudiation. It is unnecessary to consider the detail of the fresh evidence that has been admitted at the request of each party on this appeal. I consider it appropriate however to make the observation that the probabilities are that the worker’s correspondence sent by way of email on 14 November 2008 was effectively communicated on that date to the appellant. I make that observation having regard to the content of paragraphs 2, 3 and 5 of the worker’s statement dated 24 July 2009. I make the further observation that, should I be wrong concerning my earlier expressed view concerning the relevance of section 38 to the worker’s entitlement to weekly benefits, termination of her contract of employment, which negates any arguable mutuality, in November 2008, has the consequence of barring any entitlement pursuant to that section as from the date of termination.

The conclusion which I have reached concerning the worker’s claim brought pursuant to section 38 has the consequence that there is no need to consider the conflict between the decisions of Eyeington and Aughterlony. I consider it appropriate to note in passing that the conflict between those authorities has been the subject of my consideration in a recent determination on appeal being Galiatsatos v The Iron Bark Restaurant and Café [2009] NSWWCCPD 44. In that matter I expressed preference for the reasoning of his Honour Judge Duck in Eyeington concerning the proper construction and application of section 38(3) of the 1987 Act (at [26]).

The Court of Appeal in Chubb Security Australia Pty Limited v Trevarrow (2004) 5 DDCR 1 considered the legislative intention behind section 352 of the 1998 Act and has expressed the view that should an appeal be upheld it is preferable, if possible, that the Presidential member finally determine the matter (per Santow JA at [28] and [29]).

In the circumstances of the present case I consider it appropriate to redetermine on this appeal the entitlement, if any, the worker may have to weekly compensation by reason of past and continuing partial incapacity. That redetermination appears below.

The appellant’s “grounds” as stated between those numbered 13 to 21 inclusive do not constitute grounds of appeal but rather complaints concerning findings or complaints concerning the Arbitrator’s failure to make certain findings. What is clear is that the appellant is challenging the Arbitrator’s reasoning process concerning the appropriate application of the provisions of section 40 of the 1987 Act to facts which the appellant argues should have been found and determined to be relevant to questions raised by that section. As earlier stated there is no submission put that the worker has not suffered partial incapacity since late February 2008. In the circumstances it is proposed to review the evidence with the object of redetermining the question as to whether the worker has an entitlement to weekly compensation by reason of partial incapacity since that time.

Redetermination of section 40 entitlement

The need for redetermination has arisen given my earlier finding that the worker has failed to make out an entitlement pursuant to section 38. Accordingly it is necessary to determine the quantum of any entitlement to weekly payments pursuant to section 40 from 26 February 2009 to date. The Arbitrator has (at [140] – [157] of Reasons) determined the worker’s entitlement pursuant to section 40 as from 26 February 2009. The Arbitrator has, correctly, adopted the reasoning in Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (Mitchell) when approaching that task of assessment. It is proposed in this redetermination to address the evidence with a view to determining entitlement in accordance with the five steps enunciated in Mitchell. That approach will necessarily constitute a review of the Arbitrator’s assessment of entitlement as made in her determination in respect of the period dating from 26 February 2008.

In determining entitlement under section 40 it necessary firstly to determine the level of the worker’s probable earnings had she remained employed with the appellant or in some similar employment (section 40(2)(a)). The worker’s pre-injury earnings were substantial. As observed by the Arbitrator the evidence establishes that her pre-injury earnings exceeded $2,000.00 per week. Having regard to the statutory cap prescribed by section 40(2)(a) probable earnings over the relevant period I find to be:

26 February 2008 – 31 March 2008       $1,563.50
1 April 2008 – 30 September 2008         $1,594.00
1 October 2008 – 31 March 2009           $1,621.60
1 April 2009 to date  $1,654.40

The second step to be taken in determining any entitlement pursuant to section 40 is to assess, on the present facts, the worker’s ability to earn in some suitable employment since 26 February 2008. As noted above at [32] the worker has challenged the Arbitrator’s finding made in respect of section 40 entitlement. This challenge has been raised without seeking leave pursuant to section 352 of the 1998 Act to bring an appeal. The appellant in submissions filed in reply to the worker’s notice of opposition to the appeal suggests that the Commission has no power or jurisdiction to make orders as sought by the worker “in the absence of an appeal”. I reject the appellant’s submission concerning “power and jurisdiction” and note that the need to review the Arbitrator’s determination has arisen by reason of the need to revoke the order made in respect of section 38 entitlement. It is in my view appropriate on this review to deal with all matters which remain in dispute between the parties and which have been addressed in argument.

The worker has challenged the Arbitrator’s manner of determining the worker’s ability to earn in suitable employment. The Arbitrator’s approach was to survey the evidence concerning the range of earnings available to a worker with similar qualifications as the worker, to average those earnings, then to calculate the appropriate hourly rate and to multiply that hourly rate by 20 (I note that the multiplier is said to be 30 at [152] of Reasons however calculation makes clear that that was a typographical error and that the multiplier was in fact 20 when the Arbitrator arrived at the resultant figure representing earning capacity of $1,346.15 per week).

The worker submits that such approach was “unrealistic and runs contrary to the facts of the matter”. The submission is put that the worker has been unable to find such employment “which is indicative of the fact that such work is not available”. The worker proceeds to argue that a “more understandable approach” would be acceptance that the worker may be able to “engage in low level clerical type of employment and perhaps earn an amount up to average weekly earnings in the order of $800 to $900 per week”.

The appellant’s submission concerning entitlement pursuant to section 40 is in the following terms:

“SECTION 40

If (contrary to the principal submissions made for the employer that section 11A applies), an award of weekly compensation should be made, any award would be under section 40. The evident capacity of the worker (see above as adumbrated by her counsel), and her unreasonable refusal to attend the workplace, at least to discuss what job option were truly available, supports a section 40 payment which is reduced after the exercise of the discretion under section 40 (see section 40 (2A)). After her resignation in November 2008, the Applicant was able to earn more than the statutory maximum. She had improved, and demonstrated a capacity for searching for work reflective of nil economic loss.”

I conclude that the Arbitrator’s approach to the question of “ability to earn” was inappropriate in the circumstances and hence erroneous. It is thus necessary to look at all relevant factual circumstances to determine this question. The worker is highly qualified in her field however it is my view that it would be inappropriate to calculate her ability to earn in suitable employment with reference to an hourly rate which is equivalent to that of her pre-injury earnings. I also consider it inappropriate in all the circumstances to adopt the Arbitrator’s approach of averaging fulltime earnings of various positions to determine an appropriate hourly rate. I take this view given that such earnings are available in an industry which has a reasonably high demand for “labour” but such demand is founded upon an assumption that those engaged in the industry are capable of fulltime and extended hours in the workplace. That was the unchallenged evidence of the applicant with respect to her pre-injury work regime.

I consider a more realistic approach to determination of the question of the worker’s ability to earn in suitable employment is to acknowledge that her skills in the field of information technology are significant but that her inability to work full-time seriously restricts her earning opportunity. It may reasonably be expected that the worker could secure contract work from time to time performing less demanding tasks within the field of her expertise than those required of her in a fulltime appointment. It is likely that the availability of such work would vary from time to time and that rates of pay would also vary dependent upon the sophistication of the task required of the worker in that part-time contract work. Doing the best I can with the little evidence which is before the Commission on this question I consider that the worker has had the ability to earn since 27 February 2008 the sum of $50.00 per hour performing contract work. I consider it reasonable in all the circumstances to conclude that the probability is that the worker would be able to perform such work for a maximum of 20 hours per week. I find that the worker’s ability to earn in terms of section 40(2)(b) is $1,000.00 per week.

The third step in determining entitlement as outlined in Mitchell requires that the worker’s ability to earn be subtracted from the quantum of the worker’s probable earnings. That exercise demonstrates a differential at all times since February 2008 which exceeds the maximum statutory rate payable pursuant to section 37(1)(a) for a single worker without dependants. In the circumstances the worker’s prima facie entitlement to an award pursuant to section 40 is the sum of the statutory maximum weekly payment for such a worker.

The fourth step requires consideration of all circumstances to determine whether it is appropriate that the Commission’s discretion be exercised to reduce weekly entitlement as earlier calculated. The appellant’s argument with respect to this matter lacks, to some extent, clarity however it seems to be the appellant’s argument that the worker’s unreasonable rejection of suitable employment has consequences having regard to the provisions of section 40(2A) of the 1987 Act. That argument was advanced before the Arbitrator and appears in written submissions dated 27 March 2009 which were provided on the second day of hearing. The appellant’s argument appears to be founded upon the proposition that the worker, having resigned her position in November 2008 demonstrates “unreasonable rejection” of the appellant’s offer of suitable employment. There has been no submission advanced either before the Arbitrator or on this appeal that addresses the question of “calculation” of any entitlement pursuant to section 40 in circumstances where unreasonable refusal of suitable work is established.

I have earlier at [82] above observed that the worker’s resignation has the consequence that there cannot be said to be “mutuality” on the part of the worker and her employer concerning resumption of suitable work. It is clear on the evidence that the employment relationship between the parties had by November 2008 become fraught with dispute. It was the worker’s assertion at the time of her resignation that the conduct of the appellant had constituted repudiation of the employment contract. The onus is upon the appellant to establish those matters of fact raised for determination by the suggested application of section 40(2A) (see Rail Corporation of New South Wales v B [2009] NSWWCCPD 81 at [53]). The parties were in dispute with respect to a range of aspects of the employment relationship. So much is clear from the terms of the worker’s correspondence addressed to the appellant dated 13 November 2008. Whilst the Commission is not the appropriate forum to determine the matters in dispute raised and highlighted in that correspondence, I am not satisfied that there is any evidence which establishes that the worker’s election to terminate her contract of employment in November 2008 can in any way be construed as an unreasonable rejection of suitable work.

The appellant in written submission before the Arbitrator dated 11 February 2009 argued that there should be an exercise of discretion pursuant to section 40(1) to reduce any entitlement to weekly benefits that may be calculated. The argument is advanced that the “…applicant was facing two disciplinary warning letters” and that the worker had “…declined reasonable offers to resume work for [the appellant], and ultimately resigned her employment.” I have earlier found that the appellant’s offers concerning resumption of work were offers of “suitable employment” within the meaning of the Act. The consequence of the worker’s refusal to accept such offer has been addressed above. I do not consider, having regard to the nature of the dispute between the parties and the existence of conflicting medical opinion concerning the suitability of such employment that the worker’s rejection of such an offer should be a factor to be taken into account when exercising discretion as to quantum of entitlement to weekly benefits under section 40. I have addressed the subject of the worker’s resignation from her employment at [97] above. I am not satisfied that the existence of the industrial dispute between the parties leading to the worker’s termination of her employment constitutes a circumstance that is appropriately taken into account in exercising that discretion. I note in passing that the Arbitrator appears to have overlooked the arguments raised with respect to the discretionary aspect of section 40 when expressing her reasons for her determination (see Reasons [156]).

Having regard to the aforementioned calculations following application of the various steps enunciated in Mitchell the worker is, in my opinion, entitled to an award pursuant to section 40 as follows:

$367.70 from 26 February 2008 to 31 March 2008
$374.90 from 1 April 2008 to 30 September 2008
$381.40 from 1 October 2008 to 31 March 2009
$389.10 from 1 April 2009 to date and continuing.

It is to be noted that the Arbitrator’s determination made provision for payment of weekly payments in respect of total incapacity between 27 October 2007 and 25 February 2008. The appellant had paid provisional weekly benefits up to 15 February 2008 however it is not clear from the evidence as to the quantum of those payments. In the circumstances it is proposed to confirm that order but to note the appellant’s entitlement to credit in respect of payments made during that period.

The worker’s application before the Arbitrator was amended to make claim for medical expenses to which she is entitled pursuant to section 60 of the 1987 Act. The Arbitrator in her Reasons (at [158]) determined that the worker was so entitled however no order was made in the body of the Certificate of Determination. In the circumstances it is proposed to include such an order.

DECISION

Paragraphs two and three of the Arbitrator’s decision dated 12 May 2009 are revoked and the following orders are made in their place:

“2. The respondent is to pay the applicant weekly benefits pursuant to section 40 of the Workers Compensation Act 1987 as follows:
$367.70 from 26 February 2008 to 31 March 2008
$374.90 from 1 April 2008 to 30 September 2008
$381.40 from 1 October 2008 to 31 March 2009
$389.10 from 1 April 2009 to date and continuing

3. The respondent is to have credit in respect of payments of weekly benefits made during the period 27 October 2007 to 25 February 2008.”

Paragraphs one, four and five of the Arbitrator’s determination dated 12 May 2009 are confirmed.

The Arbitrator’s determination is to be further amended by the inclusion of the following order:

“6. Respondent to pay medical and hospital expenses (section 60) upon production of accounts or receipts.”

COSTS

Whilst the appellant has succeeded with respect to the question of the worker’s entitlement pursuant to section 38 of the 1987 Act, the worker has retained her award which provides for ongoing payment of weekly benefits. In the circumstances, in the exercise of the Commission’s discretion, I order that the appellant is to pay the worker’s costs of the appeal.

Kevin O’Grady
Deputy President
7 September 2009

I, MARIE JOHNS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF KEVIN O’GRADY, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE