ACM v Blacktown Anglican Child Care Centre Incorporated

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	ACM v Blacktown Anglican Child Care Centre Incorporated [2021] NSWPIC 469
APPLICANT:	ACM
RESPONDENT:	Blacktown Anglican Child Care Centre Incorporated
MEMBER:	Cameron Burge
DATE OF DECISION:	28 October 2021 (amended 1 November 2021)
CATCHWORDS:	WORKERS COMPENSATION - Psychological injury; claim for weekly benefits and medical expenses; no issue applicant suffered a work-related psychological injury; no issue applicant remains totally incapacitated for employment, or as to her pre-injury earnings; respondent raises defence under section 11A of the Workers Compensation Act 1987 and alleges the applicant’s injury was wholly or predominantly caused by its reasonable actions with regards to discipline; Held - the applicant’s injury was caused by a multitude of causal factors, including a dispute the subject of litigation in the Fair Work Commission, disciplinary matters raised after that dispute arose and an incident where two children collided in the classroom and one of them was injured; in any event, the respondent’s actions with respect to discipline upon which it relies were unreasonable; they included the provision of a final warning to the applicant only a few weeks before her last day at work which arose from an allegation made against her which was unsubstantiated, found to be unproven by the respondent and the relevant regulator and held by the respondent itself to have been actuated by the malice of a co-worker; respondent ordered to pay the applicant weekly compensation and her reasonably necessary medical and treatment expenses.
DETERMINATIONS MADE:	1. The applicant suffered a psychological injury in the course of her employment with the respondent, where they deemed date of injury of 16 March 2020. 2. The injury referred to in (1) above was not occasioned by the reasonable actions of the respondent with regards to discipline. 3. As a result of the injury referred to in paragraph 1 above, the applicant was and remains totally incapacitated for employment from 1 April 2020 to date and continuing. 4. At the date of injury, the applicant’s pre-injury average weekly earnings were $983.99 per week. 5. The respondent is to pay the applicant weekly compensation pursuant to section 36 of the Workers Compensation Act 1987 at the rate of $934.79 per week for the period 16 March 2020 to 14 June 2020. 6. The respondent is to pay the applicant weekly compensation pursuant to section 37 of the Workers Compensation Act 1987 as follows: (a) from 15 June 2020 to 31 March 2021 at the rate of $795.20 per week, and (b) from 1 April 2021 to date and continuing at the rate of $816 per week. 7. The respondent is to have credit for any weekly payments made to date. 8. The respondent is to pay the applicant's reasonably necessary medical and treatment expenses.

STATEMENT OF REASONS

BACKGROUND

The applicant was employed by the respondent since mid-2012 as a childcare worker. There was no issue she suffered a psychological injury in the course of her employment, with a deemed date of injury of 16 March 2020, when she last worked.
There is also no issue that the applicant was and remains incapacitated for employment, or as to her pre-injury average weekly earnings (PIAWE).
The respondent denies liability for the applicant's injury and alleges that it was wholly or predominantly caused by the respondent's reasonable actions with regards to discipline. For the reasons which follow, I reject the respondent's defence.

ISSUES FOR DETERMINATION

The parties agree that the only issue for determination remains whether the applicant's injury was wholly or predominantly caused by the respondent's reasonable actions with respect to discipline.

PROCEDURE BEFORE THE COMMISSION

The parties attended a hearing on 8 September 2021 and on 29 September 2021. I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.
At the hearing, Mr S Hickey of counsel instructed by Ms M Wang appeared for the applicant. Mr P Perry of counsel instructed by Ms L El-Khatib appeared for the respondent.

EVIDENCE

Documentary Evidence

The following documents were in evidence before the Commission and considered in making this determination:

(a) Application to Resolve a Dispute (the Application) and atached documents;
(b) Reply and attached documents;

(c) Applicant's Application to Admit Late Documents (AALD) dated 20 September 2021, and

(d) Applicant's Amended Wages Schedule dated 29 September 2021.

Oral Evidence

There was no oral evidence called at the hearing.

FINDINGS AND REASONS

Section 11A

An employer which seeks to make out a defence pursuant to section 11A of the Workers Compensation Act 1987 (the 1987 Act) carries the onus of establishing that defence: see Pirie v Franklins Ltd [2001] NSWCC 167 and Department of Education and Trainingv Sinclair [2005] NSWCA 465 (Sinclair).
In determining whether a defence under section 11A is successful, it must be kept in mind that there are two elements. The first is that the conduct relied upon by the respondent employer must have wholly or predominantly caused the injury in issue. The second limb requires that the conduct which wholly or predominantly caused the injury was reasonable. Only if both of these limbs are satisfied will the defence under section 11A succeed.
“Wholly” and "predominantly" are separate concepts, and a finding of one or the other must be considered. In Smith v Roads and Traffic Authority of NSW [2008] NSWWCCPD 130, the arbitrator made a finding that the subject injury was “wholly or predominantly" caused by action taken by the respondent employer. Snell ADP (as he then was) said at [62] that the concepts of “wholly” and “predominantly” are different, and if such findings were to be made, it needed to be one or the other.
The phrase “wholly or predominantly caused" has been held to mean “mainly or principally caused". The test of causation to be applied is that described in Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452 (Kooragang).
In cases such as the present, where a course of conduct is alleged to have given rise to the psychological injury, a respondent employer will usually need to have relied upon expert medical evidence to satisfy the presence of a causal connection (see Hamad v Q Catering Ltd [2017] NSWWCCPD 6 (Hamad)). In this matter, the respondent has provided medical evidence to this effect, and so does not fall foul of the problem which the employer in Hamad suffered from, namely an absence of expert opinion as to causation.
Nevertheless, the mere presence of medical evidence on the part of a respondent does not necessarily satisfy the wholly or predominantly element of the test under section 11A. What is required is a consideration of the evidence in full, both factual and medical.
In this matter, I am not satisfied on the balance of probabilities that the respondent's actions with respect to discipline were the predominant cause of the applicant's workplace psychological injury, let alone the whole cause.
In this matter, there is an important factual dispute between the parties. The respondent alleges that the applicant had been subject to several disciplinary actions before 2019, however, it was unable to produce any documentation to verify that this was the case in the face of the applicant denying any disciplinary issues until that time.
2019 is of significance in this matter as it was in that year the worker had a dispute with the respondent concerning the latter's refusal to pay her certain holiday pay leave entitlements. That dispute was not finalised at a mediation organised by the Fair Work Commission in October 2019, but remained an outstanding issue at least until 16 March 2020, by which time the worker was incapacitated for employment owing to the injury at issue.
According to the applicant, after the fair work dispute arose, several disciplinary allegations were made against her. She considered those allegations to be unfounded and that she was unfairly targeted as a result of having raised the question of being underpaid for public holidays.
During the course of the hearing, Mr Hickey made the quite appropriate concession that given the respondent's workplace entailed the supervision and care of children, it naturally had to take allegations raised against its employees seriously. That was an appropriate concession, however, it is not necessarily determinative of the success or otherwise of a defence under section 11A.
According to the worker, she felt she was being placed under increased scrutiny by the respondent which was looking for excuses to terminate her employment.
It is trite law to say that a worker's perceptions of real events may give rise to the basis for a work-related psychological injury. However, for the purposes of determining the success or otherwise of the reasonableness element of the defence under section 11A, the worker’s perceptions are irrelevant. Rather, what is necessary is an objective analysis of the facts relied upon by the respondent to establish its defence.
There was no issue the worker received notice of disciplinary action against her in November 2019. On 13 November 2019, she received a warning from the employer with respect to an allegation of hitting a child. She also received a verbal warning with regard to what she described as an incorrect allegation she had earlier on the same day appeared to have slapped the wrist of a child when lifting the child from a table onto which he had climbed.
In January 2020, the applicant received two warnings for leaving a room for one minute to dispose of dirty nappies, allegedly resulting in the child to supervisor ratio falling below the required level. It is alleged that the conduct giving rise to those allegations occurred on 13 January 2020. The applicant also received a further warning for the same issue.
The applicant then received a fourth warning which allegedly related to an incident which took place on 25 February 2020, when she was accused of inappropriate handling of a child. The worker denied that this incident took place, and alleged it was maliciously reported by her colleague.
Between 27 February 2020 and 12 March 2020, the respondent escalated the incident to multiple authorities and the applicant was stood down while investigations into it were conducted. On 12 March 2020, upon completion of those investigations, the applicant was allowed to resume working and, most importantly, the allegation was unsubstantiated.
On 16 March 2020, at approximately 5:45 pm, the applicant was supervising her class when two children accidentally ran into each other while playing. One of the children was bleeding. The applicant attended to the first aid of the child, at which time another staff member approached the applicant and took the child away to take photographs. That staff member was the same person who had previously reported the applicant in circumstances which she described as malicious. The applicant stated that she began to get anxious and thought she was going to get into trouble again, even though she had not done anything wrong. She then completed her shift and went home feeling stressed and anxious. She was unable to return to work and has not worked since.
Mr Hickey submitted that the events of 16 March 2020 plainly caused the applicant significant distress and were a catalyst for her injury, notwithstanding that they were not disciplinary in nature. I accept that submission. Moreover, I accept that in the applicant's mind, the build-up of stressors at work from the time when she complained at being underpaid were also relevant matters which caused her decompensation.
That is not to say that the disciplinary matters raised by the respondent were not in part causative of the applicant's problems. Plainly, they were. I am not, however, satisfied on the balance of probabilities that given the factual disputes and various issues which pertained to the applicant's workplace that those factors were the predominant or whole cause of the injury which the applicant suffered. This is particularly so when the catalyst for the applicant’s injury and the incapacity which resulted form it was the collision between two children in the classroom and the involvement of another staff member. Those matters can in no way be categorised as disciplinary in nature.
In any event, even if the disciplinary action taken by the respondent against the applicant was the whole or predominant cause of her injury, they can in no way be said to be reasonable.
As already noted, in order to successfully raise a defence under section 11A, the respondent must not only show the requisite cause of connection between its actions and the applicant's injury. It must also satisfy the Commission that its actions were reasonable.
The meaning of reasonableness was discussed by Geraghty J in Irwin v Director General of Education NSWCC 14068/97, 18 June 1998 (Irwin) where His Honour said:
"…The question of reasonableness is one of fact, weighing all the relevant factors. That test is less demanding than the test of necessity, but more demanding than the test of convenience. The test of reasonableness is objective and must waive the rights of employees against the object of the employment. Whether an action is reasonable should be attended, in all the circumstances, by questions of fairness."

In Commissioner of Police v Minahan [2003] NSWCA 239, Foster AJA (with whom SheIler and Santow JJA agreed) said:
“The words reasonable action, in a statute dealing with workers compensation rights of employees should be given a broad construction, unfettered by considerations as to whether the employee can or cannot also bring an action at common law against the employer, founded upon a breach of duty of care."
Reasonableness is judged having regard to fairness appropriate in the circumstances, including, what went before or after a particular action: see Nelder v Ausbowl Pty Ltd [1997] 15 NSWCCR 454. Essentially, what is required is to weigh up the actions objectively to determine their reasonableness or otherwise.
In this matter, the respondent's actions with regards to discipline which were causative of the applicant's injury were, in a significant part, extremely problematic.
The applicant was given a final written warning in early March 2020 after the incident on 25 February 2020 where she was accused of inappropriate handling of a child. In the Blacktown Anglican Child Care Centre Internal Investigation Summary, the respondent’s managers Kim and Lucy are noted as having decided to give the applicant a final written warning in relation to this alleged incident “on the ground that the accusation was malicious and that she is a long-term staff member who is committed to her position".
The final warning letter dated 10 March 2020 also states, “in light of all statements provided, it is unclear how the child was handled". Despite the respondent's own officers being of the view that the allegation against the applicant was malicious and the finding that the evidence disclosed it was unclear how the child was handled, a final warning was then issued to the applicant.
In my view, it is clearly unreasonable for an employer to issue a final warning to a worker when the alleged inappropriate conduct at the centre of an allegation the subject of that warning was not proven and indeed, the allegation was found by the employer itself to be founded on the malice of a co-worker.
I also note that on or about 12 March 2020, there was a meeting between the employer and the relevant investigator from the childcare authority where the applicant was advised by the investigator to the effect the alleged inappropriate conduct was not a serious issue and she could return to work. Despite this, the respondent had issued her a final warning before the regulators’ investigation had taken place and in circumstances where it had found that the allegation could not be substantiated. This egregiously issued final warning is of significance when one takes into account the applicant's statement where, at [28]. She says:
“On 10 March 2020, I received a final warning. I was told if I received any other warning, my employment would be terminated."
At [33] of her statement, the applicant says in relation to the incident on 16 March 2020 when the children collided in the classroom:
"While I was attending to first aid, another staff member approached and took the child away to take a photo. I then completed an incident report. This staff member was the same staff member responsible for my previous complaint. I started to get anxious as I thought I was going to get in trouble again even though I had not done anything wrong as accidents happen."
It can therefore be seen that the effect of the final warning provided to the applicant was to increase her anxiety. Then, on 16 March 2020 the colleague who the respondent's own officers had found had made a malicious allegation against her was involved in attending to the children in the workplace.
With respect to the respondent, it is completely inappropriate and unreasonable for an employer to base the issuing of a final warning and the accompanying threat to a worker’s employment on the basis of an allegation which it has found was malicious and could not be proven. It is almost incomprehensible that an employer would seek to allege that such disciplinary action could be said to be reasonable.
Associate Professor Robertson, IME for the respondent provided a report dated 31 March 2021. A/Prof Robertson was provided with a detailed history of the various matters said by the applicant to be causative of her issues, and made a primary finding that there was a multiplicity of causal factors at play. I accept that view, noting that the events of 16 March 2020 cannot be said to be disciplinary in nature, and they were plainly the catalyst for the applicant decompensating. Nevertheless, to the extent that disciplinary matters were a factor, I note that A/Prof Robertson considered that the events of 16 March 2020 were nevertheless the predominant cause.
Dr Allan, IME for the respondent provided a report dated 5 June 2020. In that report,
Dr Allan noted the events of 16 March 2020 caused the applicant to significantly worry about potentially losing her employment if any approved certification she had was to be rescinded following any potential investigation into those events against the background of the various warning she had received, including the unreasonable final warning from early March 2020. In my view, Dr Allan has not adequately taken into account the other matters which the applicant has indicated relevantly caused her injury. Quite appropriately, Dr Allan provides no opinion as to whether the respondent's actions relating to discipline were reasonable. As already noted, I find that they were not.
It follows from the above findings, that the respondent's defence fails. I prefer the view of
A/Prof Robertson that there were a multiplicity of factors which caused the applicant's decompensation, including but not limited to some disciplinary matters, the Fair Work Australia complaint and the matters which took place on 16 March 2020. However, in the event that the respondent's disciplinary actions could be said to be the predominant cause of the applicant's injury, I find that in any event that they were plainly unreasonable, in particular the issuing of a final warning based upon a specious and malicious allegation.

SUMMARY

It follows from these findings that I do not accept the applicant's injury was caused by the reasonable actions of the respondent in respect of discipline.
For the above reasons, the Commission will make orders for the payment of weekly benefits in accordance with the applicant's amended wages schedule, with the respondent to have credit for any payments made.

[2021] NSWPIC 469

28 October 2021 (amended 1 November 2021)