Aristocrat Technologies Australia Pty Ltd v Rashov

[2005] NSWWCCPD 66

WORKERS COMPENSATION COMMISSION

APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:Aristocrat Technologies Australia Pty Ltd v Raskov [2005] NSWWCCPD 66

APPELLANT:  Aristocrat Technologies Australia Pty Ltd

RESPONDENT:  Milka Raskov

INSURER:QBE Workers Compensation (NSW) Limited

FILE NUMBER:  WCC13792-03

DATE OF ARBITRATOR’S DECISION:          23 February 2004

DATE OF APPEAL DECISION:  14 July 2005

SUBJECT MATTER OF DECISION:                Psychological injury; Workers Compensation Act 1987 sections 11A(1), 35, 36, 37, 38, 40, 42, 60; retrenchment action not reasonable; error in calculation of weekly total and partial incapacity payments; and form of order to pay compensation for medical expenses

PRESIDENTIAL MEMBER:  Acting Deputy President Sassella

HEARING:On the papers

REPRESENTATION:  Appellant: Hunt & Hunt Lawyers

Respondent: Bryden’s Law Office

ORDERS MADE ON APPEAL:  The Arbitrator’s decision is revoked and the following decision is made in its place:

1. That the Appellant Employer pay the Respondent Worker pursuant to section 36 of the Workers Compensation Act 1987, $609.50 per week for the period from 2 November 2001 until 31 January 2002.

2. That the Appellant Employer pay the Respondent Worker pursuant to section 40 of the Workers Compensation Act 1987, $609.50 per week for the period from 1 February 2002 until 1 May 2002.

3. That the Appellant Employer pay the Respondent Worker pursuant to section 40 of the Workers Compensation Act 1987, $428.40 per week for the period from 2 May 2002 until 27 June 2002.

4. The Appellant Employer is to pay the Respondent Worker’s expenses under section 60 of the Workers Compensation Act 1987, on production of accounts or receipts, such expenses to include $644.00

for treatment expenses incurred with Ms Muller.

The Appellant Employer is to pay the Respondent Worker’s costs as agreed or assessed. 

BACKGROUND TO THE APPEAL

1. On 22 March 2004 Aristocrat Technologies Australia Pty Ltd (‘the Appellant Employer’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 23 February 2004.

1. The Respondent to the Appeal is Milka Raskov (‘the Respondent Worker’). 

1. The Respondent Worker was born in Australia on 20 June 1972.  She commenced work with the Appellant Employer on or about 1 October 1999.  She was employed as a senior secretary working directly for Mr N Hogg, the General Manager, Manufacturing.  The Appellant Employer manufactures gaming machines.  There were about 10 managers in the firm, each responsible for a different part of the production process. 

1. When the Respondent Worker commenced with the Appellant Employer, a firm of management consultants was setting up training courses for staff of the Appellant Employer.  These courses were preliminary courses leading to a ‘Leader Development’ course that was regarded as important if one was to be promoted.  The Respondent Worker completed several of the preliminary training courses. 

1. Between 27 February and 3 March 2000 the Respondent Worker attended a residential management team development program run by a psychologist and arranged by the Appellant Employer.  It was conducted at Berrida Manor in Bowral.  She was the only woman involved in a total of 16 participants.  The program was a workshop commencing each day at 8.00 am and ending as late as 10.30 pm each night.  The Respondent Worker has asserted that significant immature and harassing behaviour occurred during this period which caused her considerable upset.  The behaviour included one manager suggesting that the Respondent Worker and Procurement Manager, Mr R Van den Anker, appeared to be romantically involved when in a room together doing a two-person exercise as part of the program.  Some of the men were alleged to have tinkered with a results chart on display by making a set of peaks and troughs resemble a female anatomy.  One manager lowered his trousers and exposed his buttocks.  The Respondent Worker says that, when her embarrassment at these antics became obvious, another manager suggested to her that she had “loved it”.  The Respondent Worker’s upset was utilised by the workshop leader the next day as part of a class exercise.  While the manager who had lowered his trousers apologised, a number of others allegedly told the Respondent Worker that she should not have embarrassed him by raising the issue. 

1. The Respondent Worker’s supervisor, Mr Hogg, is alleged to have told her back at the workplace that such behaviour was not unusual in a male dominated workplace and that she brought some of the unwanted attention on herself by dressing in a more colourful way than other women.  The Respondent Worker also considers that she was treated differently by management after these events.  She was not consulted for her opinion, as she had been before the Bowral experience.  The Respondent Worker says she reported the Bowral incidents to a female human resources manager who said that she had seen incidents of a similar nature.  The Respondent Worker was not selected for the Leader Development course. 

1. The Respondent Worker describes a later event on 6 September 2001 when Mr G Dennis, the human resources manager, is said to have entered the Respondent Worker’s office and sworn at and threatened her because she was said to be giving advice to another employee about whether the other employee qualified for a redundancy package. 

1. On 1 November 2001 Mr Hogg interviewed the Respondent Worker and told her that he would have to “let her go” as she had done such a good job training her subordinate staff that there was no longer any need for her to do her job supervising these staff members.  She was required to finish work on that day.

1. The Respondent Worker approached an employment agency and was given temporary work with the State Rail Authority (State Rail) in February 2002.  She left after a time in June 2002, she says, because she was depressed.  She says she was also disturbed when an employee at State Rail commented on how she dressed.  She says that she was reminded of the advice she had received from Mr Hogg in 2000 about her dress as discussed in paragraph 6 above. 

1. On 21 May 2002 the Respondent Worker saw her general practitioner, Dr Seleki, because she was upset, anxious and depressed.  Dr Seleki referred her to Ms Danielle Muller, a psychologist, for counselling.  The Respondent Worker had four counselling sessions with Ms Muller, the last being on 6 June 2002. 

1. In September 2002 the Respondent Worker worked full-time for Howard Silver & Sons as a workflow co-ordinator.  She left after four weeks when her manager commented on her perfume and allegedly made inappropriate comments about the attractiveness of staff reporting to her.  On 8 October 2002 the Respondent Worker commenced working full-time for the NSW Police Service, a job that seems to have continued.

1. The Respondent Worker lodged a claim for weekly workers compensation payments. She sought total incapacity payments under section 37 of the Workers Compensation Act 1987 (the 1987 Act) for the period from 2 November 2001 to 31 January 2002 and partial incapacity payments under sections 38 and 40 of the 1987 Act for the period from 1 February 2002 to 27 June 2002. She sought $5,000 for medical expenses under section 60 of the 1987 Act. The Insurer, QBE Workers Compensation (NSW) Limited, declined liability on the basis that the Respondent Worker was suffering from a psychological injury which was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of the worker or the employment benefits to the worker. The insurer also later resisted a claim for weekly payments sought for a period after 27 June 2002. The Insurer relied on a report from Dr Prior, a Psychiatrist, stating that the Respondent Worker was fit for her pre-injury employment as from that date.

1. On 22 August 2003 the Respondent Worker lodged with the Commission an Application to Resolve a Dispute.  On 23 February 2004 an Arbitrator made a decision in the Respondent Worker’s favour.  The Appellant Employer now appeals against that decision.

THE DECISION UNDER REVIEW

1. The Certificate of Determination, dated 23 February 2004 records the Arbitrator’s orders as follows:

“In this matter an Arbitration was held on 5 February 2004.  The determination of the Commission in this matter is as follows:

1.That the Respondent pay the Applicant pursuant to section 36 of the Workers Compensation Act 1987, $1070.23 per week for the period 2 November 2001 to 31 January 2002.

2.That the Respondent pay the Applicant pursuant to section 40 of the Workers Compensation Act 1987, $871.70 per week for the period 1 February 2002 to 27 June 2002.

3.That pursuant to section 60 of the Workers Compensation Act 1987, the Respondent pay the Applicant’s medical expenses in relation to counselling up to the amount of $5,000 upon the production of any receipts, invoices and HIC notices.

4.That the Respondent pay the Applicant’s costs as agreed or assessed.”

1. The Arbitrator found the Respondent Worker’s version of events at Bowral credible and concluded that she was subject to a number of humiliating experiences in what was supposed to be a work-related training course.  He found that the Respondent Worker received an injury arising out of and in the course of employment which was caused by a combination of both the February 2000 training course event and the dismissal in November 2001.  The injury was a disease, adjustment disorder with depressed and anxious mood.  He found that the Respondent Worker was retrenched from her employment on 1 November 2001 and that the Appellant Employer had failed to prove that its actions in relation to the retrenchment were reasonable.  He found the Respondent Worker totally incapacitated for work as a result of her psychological injury for the period from 2 November 2001 to 31 January 2002 and that she was partially incapacitated for work as a result of her psychological injury for the period from 1 February 2002 to 27 June 2002.  He found the Respondent Worker’s average weekly earnings from 1 February 2002 to 27 June 2002 to be $198.53. 

ISSUES IN DISPUTE

1. The issues in dispute in the appeal are:

a)Did the Arbitrator err in suggesting that the Respondent Worker suffered an injury for which non-economic loss compensation was payable?

b)Did the Arbitrator err in making findings in relation to the Bowral training workshop for which there was no evidence?

c)Did the Arbitrator err in making findings in relation to conditions at work following the Bowral training workshop for which there was no evidence?

d)Did the Arbitrator err in rejecting or ignoring certain evidence relating to the events at the Bowral training workshop and making findings inconsistent with the evidence that was rejected?

e)Did the Arbitrator err in suggesting that Mr Hogg made comments in his written statement which he did not make?

f)Did the Arbitrator err in making findings based on the absence of a written statement by a certain manager and drawing inferences from that lack of a statement?

g)Did the Arbitrator err in finding that the events at Bowral contributed in part to the Respondent Worker’s psychological injury?

h)Did the Arbitrator err in finding that the Appellant Employer did not act reasonably in terminating the Respondent Worker’s employment?

1. Did the Arbitrator err in finding that the Respondent Worker’s position was not made redundant by the Appellant Employer and that it was occupied on and after 1 November 2001 by another worker?

j)Did the Arbitrator err in awarding weekly payments based on total incapacity from 2 November 2001 until 31 January 2002 when the Respondent Worker went on a holiday over the Christmas period in 2001?

k)Did the Arbitrator err in finding that the Respondent Worker was partially incapacitated for work after she commenced working for State Rail?

l)Did the Arbitrator err in not finding that the cause of the Respondent Worker leaving State Rail was an event that occurred during her employment at State Rail?

m)Did the Arbitrator err in finding that the Respondent Worker was as at early June 2002 not fit to return to work such as she had done before she was retrenched by the Appellant Employer?

n)Did the Arbitrator err in assessing the level of incapacity payments to be paid to the Respondent Worker?

o)Did the Arbitrator err in the form of the award of compensation for medical expenses?

ON THE PAPERS REVIEW

1. Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (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.”

2. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by both parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances. 

LEAVE

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

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

1. As the Appellant Employer argues that it is not liable to make any payment of compensation to the Respondent Worker there is compliance with section 352(2)(b) of the 1998 Act.  The amount of compensation at risk for the Respondent Worker is at least $5,000 so there is compliance with section 352(2)(a) of the 1998 Act.  The Arbitrator’s decision involves compensation greater than $5,000 payable to the Respondent Worker in weekly payments. 

1. I therefore grant the Appellant Employer leave to appeal.

EVIDENCE AND SUBMISSIONS

1. The Appellant Employer made the following submissions in support of the ‘Appeal Against [the] Decision of [the] Arbitrator’.  The Respondent Worker’s responses are noted following the Appellant Employer’s submissions.

1. The Appellant Employer submitted that the Arbitrator erred in suggesting in his reasons for decision that the Respondent Worker had sought compensation for non-economic loss (Submission 1).  The Respondent Worker suggests that this was a typographical error on the Arbitrator’s part.

1. The Arbitrator found that there was no clear distinction at Bowral between working sessions and male dominated social sessions that may have evolved later in the evenings.  The Appellant Employer submits that there was no evidence justifying such a finding (Submission 2).  The Appellant Employer refers to Mr Van den Anker’s statement dated 4 June 2002 in which he said that alcohol was not consumed during the sessions themselves but only late in the evening.  The Appellant Employer refers also to the Respondent Worker’s evidence that alcohol was not served until after 6.00 pm.  The Respondent Worker’s response to this submission was that the Arbitrator had ample evidence to make the finding he did.  This was found in paragraphs 17 to 26 of the Respondent Worker’s statement dated 4 March 2004. 

1. There was some additional evidence in the affidavit of Mr A Breese dated 21 May 2002.  In paragraph 6, referring to the final evening of the workshop at Bowral, he stated that some participants were consuming alcohol at this session, though not excessively.  I note also that the Arbitrator did not concentrate on the matter of alcohol consumption in his reasoning.  He referred to “male dominated social sessions that evolved”, a description that refers to a wider range of activities than merely drinking. 

1. The Arbitrator found that Mr Van den Anker did not deny the Respondent Worker’s allegations that Mr Morris had said that the Respondent Worker and Mr Van den Anker appeared to be romantically involved when in a room together doing a two-person exercise as part of the program.  The Arbitrator stated that Mr Van den Anker could not recall Mr Morris saying such words.  This is in fact what Mr Van den Anker said in his affidavit dated 4 June 2002.  The Appellant Employer submitted that Mr Morris’s affidavit evidence, in which he flatly denied making these statements, meant that there was evidence that the remarks were denied (Submission 3).  The Respondent Worker’s response is that the Arbitrator’s description of the evidence before him on this point was accurate.

1. The Arbitrator stated that he was unable to make a finding that Mr Van den Anker had later made comforting remarks to the Respondent Worker.  These remarks were mentioned in the Respondent Worker’s evidence where she said that, after Mr Morris had uttered remarks that embarrassed her, Mr Van den Anker had suggested she ignore Mr Morris because he was drunk and would not remember what he had said.  The Appellant Employer submitted that the Arbitrator provided no basis for this and rejected Mr Van den Anker’s evidence without reason (Submission 4). 

1. I note that this is a curious submission.  The Respondent Worker’s evidence suggests a gesture of kindness to her on the part of Van den Anker.  However, Mr Van den Anker refers to no such comments in his affidavit because he denies that Mr Morris was inebriated.  The Arbitrator’s lack of any finding on this point appears to affect each party equally.

1. The Arbitrator noted that Mr Hilton, the staff member at the Bowral workshop who had lowered his trousers, was not called to give evidence and provided no written statement.  He applied the principle in Jones v Dunkel (1959) 101 CLR 298 (Jones v Dunkel) to hold that the Respondent Worker’s version of that event was to be accepted.  He described the principle as being “that an unexplained failure by a party to call a witness may, in appropriate circumstances, … lead to an inference that the evidence of that witness would not have assisted that party’s case.”  There were differences between the Appellant Employer’s witnesses and the Respondent Worker regarding this event.  The Respondent Worker said that she saw Mr Hilton’s pubic hair and that he performed the act three times.  The Appellant Employer’s witnesses said that he was facing the wall during the event and that he did the act only once.  The Arbitrator said, in any event, that, “even accepting the versions presented by Mr Beese and Mr Van den Anker, that should not diminish the fact that this must have been a very distressing incident for a woman to be exposed to, particularly if she was surrounded that night by a male dominated event where alcohol was being consumed.” 

1. The Appellant Employer submitted that there was plenty of evidence before the Arbitrator from witnesses other than Mr Hilton and that, reasoning from the absence of evidence from Mr Hilton, the Arbitrator had committed error in accepting the Respondent Worker’s version in its entirety.  The submission was that the Arbitrator could in fact do no more under Jones v Dunkel (paragraph 30 above) than conclude that Mr Hilton’s evidence would not have assisted the Appellant Employer (Submission 5).  The Respondent Worker’s response was that the Arbitrator was legally justified in concluding that any evidence from Mr Hilton would not have assisted the Appellant Employer. 

1. The Arbitrator considered the role of Mr A Beese, the Plant Manager, in the aftermath of the ‘trousers incident’ at Bowral.  He found that Mr Beese lacked sensitivity and empathy because, although he asked the Respondent Worker if she was “OK”, he described her demeanour after the incident as seemingly “preoccupied with something”.  This was in the context of the two of them playing pool together with several others.  The submission was that the Arbitrator ignored the evidence that Mr Beese asked if the Respondent Worker was OK in assuming that Mr Beese lacked sensitivity and empathy (Submission 6).  The Respondent Worker’s response was that Mr Beese had not mentioned that, when he spoke with the Respondent Worker.  Her uncontradicted evidence is that she was having difficulty holding back tears.

1. The Arbitrator found that the Appellant Employer provided no evidence regarding the Respondent Worker’s alleged discussion with Mr Hogg on 6 March 2000.  The Arbitrator accepted the Respondent Worker’s version of this event.  On this occasion Mr Hogg is alleged to have said, regarding the Bowral events, that “[y]ou cannot control the actions of others.  You can only control your own actions”.  He is said to have suggested to the Respondent Worker that, if she did not want to invite that sort of behaviour again, she should consider changing her own behaviour as regards dress in order to deter men.  He is said to have suggested that she dressed differently from other women in the office and drew attention to herself.  The Appellant Employer submitted that, in stating that it provided no evidence on this matter, the Arbitrator failed to address paragraphs 26 to 30 of Mr Hogg’s affidavit in which he denied any recollection of such a conversation or of such statements (Submission 7).  The Respondent Worker suggested that the Appellant Employer’s failure to call Mr Hogg to give evidence on this matter at the arbitration meant that the Arbitrator was justified in finding that Mr Hogg’s evidence would not have assisted the Appellant Employer’s case.

1. The Arbitrator found that the Respondent Worker’s psychological injury resulted partly from the Bowral incidents and partly from the Respondent Worker’s retrenchment.  The submission was that the Arbitrator erred in finding that the Bowral incidents contributed to any psychological condition.  This was because the Respondent Worker was able to continue working without complaint after the events in March 2000 until November 2001 (Submission 8).  The Respondent Worker’s response was that she tried to put the Bowral events out of her mind while she continued working for the Appellant Employer.  After her employment ended she became very upset and memories of the Bowral events surfaced.  She was unable to work until February 2002 and she then left that employment because of her depression.  It was after that that she pursued medical help.

1. The Arbitrator interpreted Mr Hogg’s alleged conversation with the Respondent Worker on 6 March 2000 as carrying the “insensitive implication that, ‘you asked for it.’”  The Arbitrator considered that this would raise the Respondent Worker’s stress level.  The Appellant Employer submits that nowhere in Mr Hogg’s statement was such a comment made (Submission 9).  There is no response to this in the Respondent Worker’s submissions to the Commission.

1. Dr Prior in his report dated 28 June 2002 considered that the Respondent Worker had developed a psychological disease, adjustment disorder with depressed and anxious mood, as a result of her “sacking”.  The date of onset was shortly after the sacking.  He stated that the other incidents prior to the sacking did not produce any psychiatric illness.  The Arbitrator preferred the evidence of psychologist, Ms Muller, to that of Dr Prior on the basis that Dr Prior did not adequately explain why he did not regard the incidents at work dating from early 2000 as contributing to her disease.  Ms Muller saw the Bowral and other earlier incidents as productive of unresolved stress which manifested itself after her termination.  The Appellant Employer submitted that Dr Prior had explained why he came to the conclusion that he did.  He had noted the Respondent Worker’s statements that she had no psychological symptoms other than immediate distress following the Bowral incident.  She told Dr Prior that she did not experience psychological symptoms in response to the altercations with Mr Dennis.  She stated that her termination had been the stressor.  The Appellant Employer also argued that Ms Muller had not propounded the notion that unresolved stress manifested itself after the Respondent Worker was terminated along with several other criticisms of the reasoning and the history presented in Ms Muller’s report.  This was Submission 10.  The Respondent Worker responded that it was permissible for the Arbitrator to decide as he did on the available evidence.

1. The Arbitrator considered whether the Appellant Employer’s retrenchment of the Respondent Worker was reasonable.  To this end he considered a number of facets in the process leading to communication of the news of her retrenchment to the Respondent Worker.  The Appellant Employer suggested that the Arbitrator erred in taking into account behind-the-scenes decision-making processes of which the Respondent Worker was unaware in finding that the retrenchment was unreasonable.  The Appellant Employer submitted that actions of which the Respondent Worker was unaware are incapable of causing a stress condition (Submission 11).  The Respondent Worker responded that there was ample evidence that the Appellant Employer adopted a rather disingenuous approach to terminating the Respondent Worker’s employment and that this was inappropriate.

1. The Arbitrator found that clause 7.1 of the employment agreement between the Appellant Employer and the Respondent Worker applied to her termination and that she was entitled to a month’s notice of dismissal, an entitlement denied her when she was summarily dismissed.  The Appellant Employer submitted that the Arbitrator erred in ignoring material the Appellant Employer had provided explaining the respective rights of the parties in a redundancy situation (Submission 12). 

1. The Arbitrator found that the Respondent Worker’s position was not in fact declared redundant and was occupied by another worker.  The Appellant Employer submitted that this finding was inconsistent with evidence from the Respondent Worker herself (Submission 13).  There is no direct response from the Appellant Employer to this submission.

1. The Arbitrator found that the Respondent Worker was totally incapacitated for work from 2 November 2001 until 31 January 2002.  In identifying the weekly compensation due to the Respondent Worker for that period the Arbitrator did not deduct an amount to reflect the fact that the Respondent Worker took holidays in Coffs Harbour over the Christmas period.  The Appellant Employer submitted that the Arbitrator erred in failing to make such a deduction (Submission 14).  The Respondent Worker responded that there was nothing significant in the Coffs Harbour holiday as regards compensation for total incapacity and that, in any case, that holiday was recuperative.

1. The Arbitrator found that the Respondent Worker was partially incapacitated for work from the date when she joined State Rail in February 2002.  This was instead of finding that she was no longer incapacitated at all for work.  The reason was that the State Rail work was easier than the work for the Appellant Employer.  The Appellant Employer submitted that the test for incapacity is only whether the worker has no capacity to earn in the workforce.  Even if her employment for State Rail was less mentally taxing, it was employment she was capable of performing.  She was not, therefore, incapacitated (Submission 15).  The Respondent Worker responded that the State Rail work attracted lower pay than the work for the Appellant Employer had done.  The Respondent Worker explained also that she was restricted to a less mentally taxing temporary job because of her psychiatric injury. 

1. The Appellant Employer argued in submissions that the Respondent Worker left State Rail because she suffered an anxiety attack after a colleague there commented positively on her dress.  This suggested the possibility that psychiatric disease may have emanated from the State Rail employment rather than the employment with the Appellant Employer.  The Appellant Employer noted that the Respondent Worker sought medical assistance only after the incident at State Rail.  It was submitted that the Arbitrator had improperly failed to consider a break in the chain of causation (Submission 16).  The Respondent Worker responded that her evidence concerning a severe anxiety attack during her employment with State Rail could be seen as a manifestation of the pre-existing psychiatric condition resulting from her employment by the Appellant Employer.  There was said to be no break in causation.  The Respondent Worker noted that there was no medical evidence to suggest that her condition worsened during her State Rail employment.

1. The Appellant Employer argued that the Arbitrator used Ms Muller’s report to find that the Respondent Worker as at early June 2002 was restricted in her capacity to work by her depression and so could not do the same work as she had done for the Appellant Employer between 1999 and 2001.  The Appellant Employer submitted that Ms Muller did not say this in her report (Submission 17).  The Respondent Worker responded that the Arbitrator did not cite Ms Muller’s report as authority for a finding of partial incapacity for work early in June 2002.  The Arbitrator relied on the medical history that the Respondent Worker gave to Ms Muller. 

1. The Appellant Employer criticised the Arbitrator’s calculation of partial incapacity payments given that no payslips from State Rail were in evidence.  There was a wages schedule in evidence which, it was submitted, should have been used (Submission 18).  The Respondent Worker asserted that there was no problem with the arithmetic involved in the Arbitrator’s decision and that the Respondent Worker was entitled to prove her earnings in the manner she did at the arbitration. 

1. The Appellant Employer submitted that the Arbitrator had awarded up to $5,000 in respect of medical expenses without any evidence in support (Submission 19).  It was submitted that at the arbitration only $644 in medical expenses had been proved.  The Respondent Worker responded that such an award is not unusual.  The actual terms of the award were that the Respondent Worker could have compensation for medical expenses related to counselling up to the amount of $5,000 upon production of receipts, invoices and HIC notices.

DISCUSSION AND FINDINGS

Did the Arbitrator err in suggesting that the Respondent Worker suffered an injury for which non-economic loss compensation was payable?

1. The Arbitrator did appear to err in law in making this statement.  However, the Respondent Worker was correct in suggesting that it was a typographical error.  The Arbitrator was summarising the heads of compensation claimed by the Respondent Worker.  These were weekly payments based on incapacity for work and compensation for reasonable medical expenses.  The Arbitrator appears to have referred to non-economic loss when he meant to refer to medical expenses.  Non-economic loss compensation relates to such matters as compensation for permanent impairment (section 67 of the 1987 Act) and pain and suffering (section 67 of the 1987 Act).  In any event the Arbitrator made no award in respect of non-economic loss so this error in law had no adverse effect on the Appellant Employer as regards the compensation it was required to pay.  There is therefore no basis for me to interfere with the Arbitrator’s decision on the basis of this error.  As Deputy President Fleming said in Mayne Health Group t/as Nepean Private Hospital v Sarah Sandford [2002] NSW WCC PD 6 (Mayne) at paragraph 30, it is not accepted that an appeal will be successful where there is an error of law, error of fact or error in the exercise of a discretion unless that error ultimately affects the fairness and lawfulness of the decision and the proper exercise of the Arbitrator’s powers. There is nothing in the Arbitrator’s error here to permit me to hold that there was an error that affected the fairness and lawfulness of the decision and the proper exercise of the Arbitrator’s powers. This disposes of Submission 1 (paragraph 24 above).

Did the Arbitrator err in making findings in relation to the Bowral training workshop for which there was no evidence?

1. This relates to Submission 2 in paragraph 25 above.  The findings in question are that there was no clear distinction between the working sessions at Bowral and the male dominated social sessions occurring later in the evenings.  The evidence described in paragraph 25 above suggests that alcohol was freely available after 6.00 pm each night.  It was common ground that the group worked on until 10.30 pm.  There was a four and a half hour period in which alcohol was available during working sessions.  To the extent that the Arbitrator’s findings were based on the availability of alcohol during evening sessions his findings were soundly based.  However, as I noted in paragraph 26 above, the Arbitrator based his findings on more than the availability and consumption of alcohol.  He described the social sessions as male dominated.  Given the descriptions by various witnesses of what occurred on the night of 29 February 2000 (especially that described in paragraph 30 above) the Arbitrator was justified in finding that there was a male dominated social culture at play during this workshop.  He did not err in fact in making these findings.

Did the Arbitrator err in making findings in relation to conditions at work following the Bowral training workshop for which there was no evidence?

1. This relates to Submission 9 at paragraph 35 above.  Mr Hogg denied in his affidavit that he discussed the Bowral events with the Respondent Worker after they both returned to routine work in Sydney and that he had inferred that she had “asked for it”.  The Arbitrator considered the Respondent Worker’s evidence credible overall and relied on the Respondent Worker’s evidence to make this comment.  I see no error in the Arbitrator’s comments.  He was not making a direct finding when he referred to this aspect of the Respondent Worker’s evidence.  He referred to this matter as one of a number of indicators that, after the Bowral events, the Appellant Employer tended to minimise what had occurred there and expressed no contrition.  This characterisation was justified on the evidence.  I note also that, although the Appellant Employer’s representative at the arbitration examined the Respondent Worker, he did not seek to impeach her evidence on this point.  I am satisfied that the Arbitrator made no error of fact. 

Did the Arbitrator err in rejecting or ignoring certain evidence relating to the events at the Bowral training workshop and making findings inconsistent with the evidence that was rejected?

1. This relates to Submissions 3 (at paragraph 27 above), 4 (at paragraph 28 above), and 7 (at paragraph 33 above).  The first of these submissions was the Appellant Employer’s suggestion that Mr Van den Anker had denied in his written statement that Mr Morris had used words suggesting that he and the Respondent Worker had been found in a compromising romantic position during a work session at Bowral.  The Arbitrator found that Mr Van den Anker did not flatly deny this but that he did not recall it.  Paragraph 8 of Mr Van den Anker’s statement includes the words, “At no time at all do I recall Mr Morris saying anything to Ms Raskov and myself words to the effect of … ‘You two look cosy on the couch.  I do not mean to interrupt an interlude.’”.  The Arbitrator’s characterisation of the situation was not affected by error.

1. Submission 4 is difficult to deal with.  As I said above in paragraph 29, there is little advantage to either party in a finding in either direction regarding whether Mr Van den Anker made this comment.  However, the Arbitrator decided to accept the Respondent Worker’s version of most events and she said that Mr Van den Anker had suggested she ignore Mr Morris because he was drunk and would not remember what he had said. 

1. In Mayne (paragraph 46 above) the finding by an Arbitrator that a party’s evidence was credible was discussed at paragraphs 27, 29 and 40. The principles enunciated there were that restraint should be exercised by an appellate “court” in interfering with findings of a “trial judge” that are based on the acceptance of a witness’ credit. The key issue was said to be that the Arbitrator has had the benefit of seeing and hearing the witness and coming to a view as to his or her credibility and truthfulness. The Arbitrator has also had the opportunity to reflect upon the evidence prior to coming to a decision. This may give the Arbitrator a considerable advantage. I think it likely that the Respondent Worker was correct in her evidence that Mr Van den Anker made the remarks. This leads to a conclusion that has mixed results. It means that I consider on balance that Mr Morris did in fact make the offensive remarks but that Mr Van den Anker made an attempt to reassure the Respondent Worker by his remarks. While my conclusions differ from the Arbitrator’s I do not see any consequences flowing from this difference as regards the integrity of the Arbitrator’s ultimate decision.

1. Submission 7, relating to the remarks Mr Hogg is alleged to have made to the Respondent Worker after they returned to the workplace referring to her manner of dress, involved the Arbitrator in accepting the Respondent Worker’s evidence in preference to that of Mr Hogg.  The Appellant Employer put this down to Mr Hogg not having been called to give evidence at the arbitration.  This may be correct in part.  However, it is also the case that the Respondent Worker’s evidence on this point was not challenged at the arbitration.  I see no error in the Arbitrator’s findings on this point.

Did the Arbitrator err in making findings based on the absence of a written statement by a certain manager and drawing inferences from that lack of a statement?

1. This relates to Submission 5 at paragraphs 30 and 31 above.  The Jones v Dunkel (paragraph 30 above) point made by the Appellant Employer at paragraph 31 above is probably technically correct in that the principle from Jones v Dunkel is that the unexplained failure by a party to provide evidence from a person who could have given evidence permits an inference that nothing in the evidence would have assisted the party’s case.  It cannot be inferred that the evidence would have been damaging to the party’s case. 

1. A problem for the Appellant Employer in relation to the Bowral incident was that Mr Hilton, the man who had lowered his trousers, did not provide evidence.  From this the Arbitrator decided that the Respondent Worker’s version of the event was to be preferred.  There were fairly consistent accounts of the event given in affidavit evidence by the Appellant Employer’s staff who attended the Bowral workshop.  However, where there is evidence from several witnesses and one of these (the minority witness) departs in his or her evidence from a number of the others, Jones v Dunkel can be invoked such that failure by a knowledgeable party to give evidence can be a basis for preferring the evidence of the minority witness. 

1. There was no error in the Arbitrator’s findings impugned by the Appellant Employer in Submission 5.  The Arbitrator correctly stated the principle in Jones v Dunkel (paragraph 30 above).  He explained why he preferred the evidence of the Respondent Worker overall.  It is also the case that the Respondent Worker’s account of what occurred at Bowral was not challenged when she was examined by the Appellant Employer’s representative at the arbitration.

Did the Arbitrator err in finding that the events at Bowral contributed in part to the Respondent Worker’s psychological injury?

1. This relates to Submissions 8 (paragraph 34 above) and 10 (paragraph 36 above).  It is necessary to consider the expert evidence from Dr Prior, Dr Seleki and Ms Muller, and the lay evidence on this point. 

1. The Respondent Worker’s statement dated 4 March 2003 said the following as regards the events at Bowral and how they contributed to her psychological disease.  At paragraph 55 the Respondent Worker stated that, after she lost her job, her partner of 11 years asked her why she had lost her job.  She thought about it and told him about what had occurred at Bowral.  She said she had kept this from him until then so as not to upset him.  However, when she raised it with him it brought back memories which she had tried to suppress.  In later paragraphs she said that in the ensuing weeks she became more and more upset and depressed and she could no longer suppress the events at Bowral.  The Respondent Worker repeated this evidence at the arbitration.  It was not challenged in her examination by the Appellant Employer’s representative.

1. In the Respondent Worker’s “Self Report Structured History”, dated 3 June 2002 and apparently prepared for her psychologist, she was asked “What would you like to achieve by coming to see a psychologist?”  She answered, “Deal with and achieve closure to the incidents outlined in my affidavit, specifically the manager exposing himself to me and why I didn’t tell Craig [her partner] and the manager threatening me and again why I didn’t tell Craig.  (I usually discuss everything with him.)”

1. In an affidavit dated 12 June 2002 Mr G Dennis, the Appellant Employer’s Human Resources Manager, wrote that he had attended various workshops and courses where participants had been required to stay overnight.  He had witnessed the Respondent Worker at a number of these workshops.  On all but a few occasions, he said, the Respondent Worker had fully participated in all work-related and social activities with other participants.  He said these workshops were held between 7 and 9 May 2002 (after the Respondent Worker had left the Appellant Employer’s employment), on 12 and 13 June [no year given] at Coogee and on 27 and 28 September 2002 at Bowral.  He may have meant to refer to the same dates in 2001, given the date of his affidavit.  He proceeded to state that he had seen the Respondent Worker consume alcohol at these workshops with other participants and participate in other activities during after-hours sessions.  None of the other affidavits by the Appellant Employer’s managers contained anything of interest in relation to the Respondent Worker’s apparent psychological state between March 2000 and November 2001.  In considering Mr Dennis’ remarks it should be noted that the Respondent Worker’s unchallenged evidence in paragraph 39 of her affidavit was that she continued working for the Appellant Employer after the Bowral incident and tried to put the events of Bowral out of her mind. 

1. Dr Seleki provided a single page report to the Respondent Worker’s solicitor dated 30 September 2002.  He first saw the Respondent Worker on 21 May 2002 when she complained that she was anxious and depressed due to inappropriate workplace behaviour which had occurred “several months prior” and she had not worked since.  As the Respondent Worker did not elaborate on the inappropriate workplace behaviour he referred her to Ms Muller for psychological assessment and counselling.  He saw her next on 11 June 2002 and she was suffering from anxiety and depression.  He said he was unable to comment as to the nature and conditions of employment as a substantial contributing factor to the Respondent Worker’s condition.

1. Ms Muller’s clinical notes indicate that the Respondent Worker saw her on 28 May 2002.  The notes suggest that at these sessions the Respondent Worker identified the dismissal as the primary reason for her medical condition.  However, in discussing the reasons for her dismissal, she referred to the industry being male dominated and to the Bowral events which, she told Ms Muller, produced immediate distress which was reinforced by the discussion she said she had with Mr Hogg back at work.  This was the discussion in which she interpreted him as suggesting that she was to blame for her problem because she wore provocative clothing.  Her recorded remarks give a general impression that she was not supported back in the workplace as she had expected to be.  She referred also to the alleged altercation she had with Mr Dennis.  However, for present purposes, these later events are less relevant in relation to the Bowral events.  Ms Muller’s clinical notes for 30 May and 3 and 6 June 2002 indicate that the emphasis in the psychological counselling was on the problems the Respondent Worker had at the time and how they were manifested.  The emphasis was on clinical treatment of those problems with, apparently, some early success. 

1. On 6 June 2002 Ms Muller sent a report to Dr Seleki in which she wrote that the Respondent Worker reported that “her current emotional difficulties developed after she was dismissed unfairly in November 2001. … I believe that you are aware of the facts leading to this dismissal and therefore I won’t elaborate here”.  Ms Muller reported further that the Respondent Worker had said that the pressure of her upcoming unfair dismissal court case and the emotional distress she had been experiencing since the dismissal had impacted negatively on her de facto relationship of nine years.  This was a short report but it identified a number of matters, including those occurring at work before her dismissal, as factors contributing to the Respondent Worker’s psychological condition.

1. On 3 October 2002 Ms Muller wrote a full report.  On page 2 of the report Ms Muller presented a history of the complaint as recounted to her.  She reported that the Respondent Worker said that she was dismissed on 1 November 2001.  She did not believe that the reasons given for the dismissal were valid and suggested that earlier events had a bearing on the dismissal.  These included the Bowral workshop, the lack of management support accorded her after her return to the workplace and her altercation with Mr Dennis in October 2001.  Ms Muller noted that the psychological symptoms had their onset after the dismissal.  Ms Muller’s opinion was that “it would appear that Ms Raskov’s emotional distress developed at least in part in response to the events at work described above and her subsequent dismissal.” 

1. Psychiatrist Dr Prior saw the Respondent Worker on 27 June 2002 and his report was dated 28 June 2002.  He took a history in which the Respondent Worker reported being sacked in November 2001.  She said that she believed the sacking to be related to events at the Bowral workshop in February a year and a half earlier.  Dr Prior’s history was that the Respondent Worker “denied psychological symptoms other than an immediate ‘distress’ following the workshop incident.  She stated that she ‘put it to the back of my mind’”.  She stated that she did not experience psychological symptoms in response to her altercations with the Human Resources Manager when he commenced work, and after the altercation they had in September 2001.  There follows a detailed account of her problems within a week of the sacking and in the months following.  These included lability of mood, irritability, outbursts of anger and periods of frustration and misery.  Her symptoms had become more pronounced in the weeks before she saw Dr Prior because of the upcoming unfair dismissal case.  Dr Prior diagnosed adjustment disorder with depressed and anxious mood which he believed she had had since shortly after her sacking and which was still present.  He did not see that there had been an aggravation of any pre-existing condition.  Dr Prior provided an opinion on the causation of the psychiatric disease.  He regarded the sacking as the cause of the adjustment disorder.  He said that the other incidents prior to the sacking did not produce any psychiatric illness.  Possible factors perpetuating the adjustment disorder were the stress involved in her two legal cases and the recent death of her father.  He considered her fit for her pre-injury work duties.  He saw a good prognosis for recovery from the adjustment disorder once she found appropriate work and concluded her legal cases. 

1. There is little to be derived from Dr Seleki’s short report.  Dr Prior’s report is thorough in its history and in the transparency of his reasoning.  He considered the events in question and concluded that it was the termination of the Respondent Worker’s employment that produced the adjustment disorder. 

1. Ms Muller, the treating psychologist, disagreed with Dr Prior and saw the Bowral incidents as contributing to the Respondent Worker’s later psychological problems.  It is often preferable to accept the evidence of a treating expert over that of an expert whose services have been secured only for a forensic purpose.  The treating expert will usually, as here, have seen the Respondent Worker on a number of occasions and had the opportunity to delve deeper into the patient’s history. 

1. The Arbitrator preferred Ms Muller’s evidence to that of Dr Prior.  This was open to him on the evidence and he committed no error of law or fact in preferring Ms Muller’s opinion.  I therefore find also that the Arbitrator did not err in law or fact in holding that a combination of the events in Bowral and the later dismissal made a substantial contribution to the onset of the Respondent Worker’s psychological injury. 

Did the Arbitrator err in finding that the Appellant Employer did not act reasonably in terminating the Respondent Worker’s employment?

1. This relates to Submissions 11 and 12 in paragraphs 37 and 38 above.  It is necessary to consider the evidence regarding the termination of employment.  The Respondent Worker’s evidence was that her knowledge of the event commenced only on 1 November 2001 when Mr Hogg met with the Respondent Worker at about 3.00 pm and told her that he would have to “let [her] go”.  He proceeded to say that she had done such a great job building an administrative team and making them self-sufficient that she had in effect brought about the loss of her job.  The team no longer required a leader.  He said it was no reflection on her and her contribution to the organisation.  The Respondent Worker’s evidence was that she queried this decision given that another person was in her normal job and serving a probation period.  She said that Mr Hogg did not respond. 

1. The Respondent Worker’s evidence at the arbitration was that she had no advance notice that her employment was to be terminated on 1 November 2001.  She was required to leave the job on that day. 

1. The evidence from managers working for the Appellant Employer was as follows.  Mr Dennis in his affidavit dated 12 June 2002 offered the following explanation.  The Respondent Worker had been hired to perform the following duties as a Senior Secretary:

·     Diary management for General Manager, Manufacturing

·     Co-ordination of meeting schedules

·     Car parking services and site parking

·     Oversee mail services

·     Oversee canteens

·     Management of petty cash

·     Organisation of offsite training program venues for management team

·     Organisation of functions

·     Co-ordination of monthly staff functions

·     Email announcements to Rosebery staff

Over time the car parking, petty cash, staff function co-ordination and email announcements were said to have been given over to a receptionist and, in one case, to another named employee.

1. Mr Dennis said that as time progressed the Respondent Worker hired additional staff to perform these duties under the Respondent Worker’s supervision or allocated them to other staff.  A Ms Fadda was employed in March 2001 to act as Mr Hogg’s personal assistant and to assist the Respondent Worker with various other duties.  Ms Fadda was made full-time and permanent in July 2001, subject to a three-month probationary period. 

1. In or about October 2001 Mr Hogg convened a meeting of senior managers not including the Respondent Worker to ascertain the level of administrative support required by the company.  There was a consensus that most managers were doing their own administrative work.  Mr Dennis looked for alternative work for the Respondent Worker within the company but could identify only a temporary position at junior secretarial level, a position regarded as not suitable for her.  Mr Dennis stated that he told the Respondent Worker of the situation.  He stated that the Respondent Worker responded that he should find her an appropriate role regardless of how it might affect other employees.  Mr Dennis said that he explained to the Respondent Worker that he could not terminate others who were working in jobs that were not redundant.  His evidence was that he told her that her position was no longer required and that others could not lose their jobs because of that.  Mr Dennis emphasised in his affidavit that Ms Fadda’s role as Mr Hogg’s personal assistant was not redundant but that the Respondent Worker’s supervisory position was redundant in 2001.  He said that the roles performed by both women were totally different and that no one had been employed to replace the Respondent Worker after she was terminated.  He did identify another temporary position occupied by Ms Frowde which was temporary and very junior, the inference being that it was not a job suitable for the Respondent Worker.  Mr Dennis stated that he had a meeting scheduled with the Respondent Worker at 5.30 pm on 1 November 2001 but that she did not attend it. 

1. Mr Hogg’s affidavit dated 13 June 2002 provided another account in which there was no mention of Mr Dennis’s involvement.  He said the Respondent Worker was employed in the position of Manufacturing Support.  Her duties included administrative support to the management’s third tier and the establishment and supervision of an administrative team within the Manufacturing department of the Rosebery office.  She was responsible for employing administrative staff as required.  She employed Ms Fadda in March 2001.  As required, the Respondent Worker undertook such tasks as contract management of plant and equipment and establishment of a central filing system.  He said that the Respondent Worker eventually delegated many of the responsibilities he had given her to the extent that she became a supervisor of an administrative team.  He then stated that “[a]s part of reviewing costs of operations and the need to constantly monitor and reduce these costs, [he] determined shortly prior to meeting with Ms Raskov on 1 November 2001, that Aristocrat would not require any function mainly carrying out supervisory tasks of other administrative employees.”  The other employees were able to carry out their duties on a fairly autonomous basis without the need for constant supervision. 

1. Mr Hogg said that, after considering the need to restructure the administrative team, he requested that the Respondent Worker meet with him on 1 November 2001.  He said that he intended to tell her of his decision that an employee engaging in a supervisory function was not required.  His evidence was that he did not intend to terminate the Respondent Worker or to discuss termination at that meeting.  He said he “wanted to discuss th[e issue of there being no requirement for a supervisor] with Ms Raskov and listen to any ideas that she had to overcome the need to have a full-time supervisory position and also to explore with her other areas that she may be able to concentrate [on] in performing her duties.”  He said that it was the Respondent Worker who initiated the question of termination.  (How the Respondent Worker did this was not explained.) 

1. He described the meeting on 1 November 2001 by stating that he informed the Respondent Worker that the performance of what had become substantially a supervisory function was not required because the team she created had become self-sufficient.  The Respondent Worker is said to have asked why her position was no longer required.  Mr Hogg stated in evidence that he responded by saying that he would attempt to find her an alternative position within the company.  He said that he emphasised that the decision was not a reflection on the quality of her work.  Mr Hogg then referred to the termination letter attached to the affidavit.  He wrote that he did not give the Respondent Worker the letter at that time as he wanted to examine other employment options for her.  He then wrote that after the meeting he made enquiries about possible alternatives before giving her the letter of termination. 

1. In neither affidavit was it expressly stated that the Respondent Worker was given until the end of the day to pack up her things.  This was her uncontradicted evidence at the arbitration. 

1. A related matter is whether the Respondent Worker was dismissed under her contract of employment or as a redundant worker under the Employment Protection Act 1982 (“the 1982 Act”). The employment contract deals with termination of services in clause 7. Clause 7.1 permits either party to terminate the agreement at any time by giving the other party one month’s notice in writing (clause 7.1). The Appellant Employer reserved the right to “pay … an amount equivalent to … remuneration that would have been earned during the … notice period, in lieu of requiring [the Respondent Worker] to continue to carry out [her] duties during that period.”

1. Clause 7.2 permitted the Appellant Employer to terminate a worker’s employment with immediate effect where the worker had breached the employment contract, or engaged in misconduct, or engaged in illegality, or misappropriated property of the Appellant Employer, or been convicted of a criminal offence, or been convicted of a gaming offence, or become mentally or physically incapable of performing duties, or been repeatedly absent from work, or become a person whose affairs are under administration under mental health laws.  Clause 7.3 permitted the Appellant Employer to terminate immediately if a worker’s employment threatened the Appellant Employer’s ongoing capacity to hold a gaming licence. 

1. The Arbitrator decided that clause 7.1 applied because the Respondent Worker was terminated for a reason other than the reasons listed in clause 7.2 and, I would add, clause 7.3.  The Appellant Employer considers that clause 7.1 does not apply where a termination occurs because of a redundancy.  I do not accept this argument.  There is nothing in clause 7.1 that excludes it from operating in the case of redundancy so, at least on its face, clause 7.1 applies.  The Appellant Employer considers that the 1982 Act applies in a redundancy situation to the exclusion of a clause such as clause 7.1.  No authority was offered for that proposition.  I have read the material the Appellant Employer submitted on the operation of the 1982 Act.  That material concentrates on the minimum entitlements due to a worker who is declared redundant.  It appears from the evidence that the Appellant Employer abided by these requirements.  The material provided by the Appellant Employer indicates that there is nothing to prevent an employer from extending greater benefits to a redundant employee where the relevant award or agreement so stipulates. 

1. In section 7 of the 1982 Act there is a requirement that, subject to section 9, an employer shall not terminate the employment of any employee unless the employer has, at least 7 days before notice of the termination is given to the employee, served on the Industrial Registrar a notice of intention to terminate the employment.  Alternatively, where notice of the termination is not given to the employee, the Industrial Registrar must be notified before the termination of the employment.  Under section 9 the requirements in section 7 do not apply if there are fewer than 15 employees.  It would appear that the Appellant Employer employs at least 15 workers as it was prepared to state that it acted under the 1982 Act.  The submissions from the Appellant Employer suggested that it had complied fully with the requirements in the 1982 Act.  To have done so the Appellant Employer would have had to serve notice on the Industrial Registrar before moving to terminate the services of the Respondent Worker. 

1. I find that both the 1982 Act and clause 7.1 of the employment contract applied to the decision to declare the Respondent Worker’s position redundant.  The two sets of provisions can stand together and are not inconsistent. 

1. Section 11A of the 1987 Act and the decision of Neilson J in the Compensation Court of New South Wales in Pirie v Franklins Ltd (2001) 22 NSWCCR 346 (Pirie) are relevant in considering whether the Appellant Employer acted reasonably in terminating the Respondent Worker’s employment. Section 11A(1) of the 1987 Act provides that no compensation is payable under the 1987 Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers, or provision of employment benefits to workers. In the Pirie case it was held that an employer who pleads the defence under section 11A(1) of the 1987 Act, that is that the worker’s psychological injury was wholly or predominantly caused by reasonable action taken by the employer with respect to retrenchment, has the onus of proving the action taken was reasonable. The question of reasonableness or fairness involves a consideration of all relevant factors. The test is objective, weighing the rights of employees against the objective of employment. The provision looks at the process of retrenchment rather than the act of retrenchment per se.  In considering the reasonableness of the process of retrenchment, the following factors may be relevant:

·     consultation, particularly with a very senior employee, about the proposed retrenchment before taking the action to enable the employee to have some input in the final decision;

·     provision of adequate notice of the proposed retrenchment, having regard to the employee’s seniority, level of responsibility and the availability of alternative work at that level;

·     provision of counselling services; and

·     provision of help in finding alternative employment for the retrenched employee.

1. In the current case the factors identified in the Pirie case (paragraph 82) were largely absent.  There was, on the evidence of Messrs Dennis and Hogg, only the most superficial consultation with the Respondent Worker before she was given the redundancy letter.  The fact that a letter had been prepared in advance of Mr Hogg’s discussion with her suggests that redundancy was probably preordained.  While I accept that the Respondent Worker was not a long-serving senior executive, such as Mr Pirie had been, and that a lesser obligation to consult might have applied in this case, there was still an obligation to engage in a more open and more exhaustive consultation process than occurred here.

1. There was little or no notice given to the Respondent Worker.  There were no counselling services offered to the Respondent Worker and no help in finding alternative employment. 

1. I find that the Arbitrator did not err in finding that the Appellant Employer did not act reasonably in terminating the Respondent Worker’s employment. 

Did the Arbitrator err in finding that the Respondent Worker’s position was not made redundant by the Appellant Employer and that it was occupied on and after 1 November 2001 by another worker?

1. This relates to Submission 13 in paragraph 39 above.  Despite the other problems disclosed by the evidence of Messrs Dennis and Hogg in paragraphs 71 to 74 above regarding the summary termination of the Respondent Worker’s services, the material on the reorganisation of work in the workplace of the Appellant Employer following the departure of the Respondent Worker seemed consistent.  However, this was a relatively minor aspect in the general consideration of the reasonableness of the Appellant Employer’s actions in retrenching the Respondent Worker and it was in any case open to the Arbitrator to make the finding he did on the evidence before him.  There is no error of law or fact affecting the Arbitrator’s decision as a result of this part of his reasoning.

Did the Arbitrator err in awarding weekly payments based on total incapacity from 2 November 2001 until 31 January 2002 when the Respondent Worker went on a holiday over the Christmas period in 2001?

1. This relates to Submission 14 in paragraph 40 above.  Section 49 of the 1987 Act provides that weekly compensation payments are due to a worker in respect of any period of incapacity for work “even though the worker has received or is entitled to receive in respect of the period any payment, allowance or benefit for holidays, annual holidays or long service leave under any Act (Commonwealth or State), award or industrial agreement under any such Act or contract of employment”.  The amount of compensation payable is the amount which would have been payable to the worker had the worker not received or been entitled to receive in respect of the period any such payment, allowance or benefit.  The Respondent Worker’s employment agreement provided for four weeks’ annual leave.  There is no suggestion that the Respondent Worker spent anything approaching four weeks at Coffs Harbour so this recreation period was within the four weeks provided for in the employment contract.  Section 49 ensures that any weekly compensation payments otherwise payable to the Respondent Worker remained payable while she was on holiday. 

1. The Arbitrator did not err in awarding weekly payments to the Respondent Worker while she was on holiday in Coffs Harbour.

Did the Arbitrator err in finding that the Respondent Worker was partially incapacitated for work after she commenced working for State Rail?

1. This relates to Submission 15 in paragraph 41 above.  The Respondent Worker’s evidence regarding her work capacity at State Rail was that she worked there until she left because of continued depression manifested by crying for no reason, anxiety attacks experienced travelling to and from work and severe anxiety when a male colleague complimented her on her dress.  In her oral evidence at the arbitration the Respondent Worker said that she did not cope very well with the work at State Rail.  Later she said that she could cope with the State Rail work but that it was due to finish in a few weeks and she was becoming preoccupied by her upcoming unfair dismissal case.  She had therefore left that job when she did. 

1. In Arnott’s Snack Products Pty Ltd v Jacob (1985) 155 CLR 171 Mason, Wilson, Deane and Dawson JJ said in the High Court of Australia that the concept of partial incapacity for work is that of reduced physical capacity, by reason of physical disability, for actually doing work in the labour market in which the employee was working, or might reasonably be expected to work. Their Honours said that, under the predecessor provision to section 40 of the 1987 Act, a worker’s entitlement to compensation will depend on his or her loss of earning power. No doubt the same principle applies where capacity is reduced because of a psychological injury.

1. In considering the evidence relating to the period from November 2001 until late June 2002 I note that Ms Muller and Dr Prior were both prepared to accept that the Respondent Worker suffered from a significant psychological condition (according to Dr Prior, adjustment disorder with depressed and anxious mood).  On balance it is difficult to accept that the Respondent Worker could have taken on work in that period requiring the same level of skills as she had exercised in her employment with the Appellant Employer.  It is therefore difficult to see her commanding a wage or salary commensurate with that she enjoyed when working for the Appellant Employer. 

1. The Arbitrator did not err in finding that the Respondent Worker was partially incapacitated for work after she found work with State Rail.

Did the Arbitrator err in not finding that the cause of the Respondent Worker leaving State Rail was an event that occurred during her employment at State Rail?

1. This relates to Submission 16 in paragraph 42 above.  There appears a constellation of reasons for the Respondent Worker having left State Rail.  The job was temporary and due to expire shortly after she left in any event.  There is some suggestion that she was depressed and having some difficulty coping, although at other times the Respondent Worker does not hold to this explanation.  There is the matter of her upcoming unfair dismissal case which was exercising her mind.  There was the compliment on her dress from a State Rail colleague which reawakened in her the recollection of remarks Mr Hogg is alleged to have made suggesting that she dressed provocatively when working for the Appellant Employer. 

1. The Arbitrator did not err in failing to find a break in the causal chain resulting from the remark made by the Respondent Worker’s State Rail colleague.  In context it appears to have been just one of a number of considerations prompting her to leave employment that had almost expired at a time when she was in an emotionally weakened state as a result of her termination by the Appellant Employer.

Did the Arbitrator err in finding that the Respondent Worker was as at early June 2002 not fit to return to work such as she had done before she was retrenched by the Appellant Employer?

1. This relates to Submission 17 in paragraph 43 above.  In paragraph 43 I quoted the Respondent Worker’s response to the effect that the Arbitrator did not rely on Ms Muller’s opinion in making this finding.  Rather, he relied on the history taken by Ms Muller to form his own opinion.  I see no error in the Arbitrator having done this.  However, there is another piece of evidence that the Arbitrator could have used to support his finding.  Dr Seleki’s report dated 30 September 2002 mentions that he gave the Respondent Worker a WorkCover medical certificate stating that she was unfit for work from 11 June 2002 in her prior employment.

Did the Arbitrator err in assessing the level of partial incapacity payments to be paid to the Respondent Worker?

1. This relates to Submission 18 in paragraph 44 above. There appear to be a number of errors regarding the assessment of the Respondent Worker’s weekly compensation payments which affected also the total incapacity payments. Section 36(1) of the 1987 Act provides that, for any period of total incapacity within the first 26 weeks after a worker becomes entitled to weekly payments of compensation in respect of the incapacity, he or she is entitled to the “current weekly wage rate” as defined in section 36(2). That definition refers a reader to section 42 of the Act which provides a code for assessment of the current weekly wage rate. Section 42(1)(a), for a worker paid according to an award, prescribes the remuneration under the award as the current weekly wage rate. Section 42(6) removes from calculation additional payments including over-award payments, penalty rates or payments covering special expenses attributable to the nature of the worker’s employment.

1. There are additional restraints affecting the amount that may be assessed as the current weekly wage rate. Section 35 prescribes a statutory maximum payment that may be made per week to a worker who is totally or partially incapacitated. At present that amount is $1,420. Wages schedules provided by both parties placed the Respondent Worker’s pre-injury earnings as $1,070.23 a week.

1. For a worker not employed under an award, section 42(8) limits the amount that can be assessed as the worker’s current weekly wage rate to 80% of the worker’s average weekly earnings in respect of the work the worker was performing immediately before he or she became incapacitated (section 42(1)(d)). This provision applies where the worker is not employed under an award and no decision is made to treat the worker as if he or she was employed under a relevant award (see paragraph 99 below).

1. In a letter to the Commission dated 17 February 2004 the Appellant Employer’s solicitor advised that the Respondent Worker was “award-free”, thus making section 42(1)(d) applicable to the Respondent Worker, but that the minimum award for clerks was applicable. Section 42(3)(b) of the 1987 Act requires that consideration be given to applying an appropriate award to an award-free worker where it is fair and reasonable to apply it.

1. Applying the clerk’s award, the “Clerical and Administrative Employees (State) Consolidated Award”, to the Respondent Worker, as that award stood in November 2001 and until 22 June 2002, the weekly rate for an adult employee at the top grade was $609.50.  On 23 June 2002 the weekly rate rose to $627.50.  I refer to the top salary level because that would appear justified given the Respondent Worker’s apparent seniority in the Appellant Employer’s clerical structure and her weekly salary. 

1. The correct analysis involves the following elements:

·     The Respondent Worker became totally incapacitated on 1 November 2001 and became entitled to weekly compensation payments on 2 November 2001.

·     The Respondent Worker’s 26-week incapacity period expired, according to section 34 of the 1987 Act, on 1 May 2002.

· The Respondent Worker was not employed under an award. However, in accordance with section 42(3)(b) of the 1987 Act, it would be fair and reasonable to apply the remuneration provisions of the clerk’s award to the work done by the Respondent Worker. The Respondent Worker is therefore deemed to be remunerated in respect of that work under the clerk’s award.

·     The weekly compensation payable to the Respondent Worker from 2 November 2001 until 31 January 2002 was $609.50.

1. This means that the Arbitrator did make an error of law in awarding weekly compensation of $1,070.23 a week between 2 November 2001 and 31 January 2002.

1. Between 1 February 2002 and 27 June 2002 the Respondent Worker was partially incapacitated. The evidence regarding the Respondent Worker’s reduction in weekly earnings during her period of partial incapacity initially consisted of some wages schedules. 

1. For the period from 1 February until 30 June 2002 the actual earnings were stated to be $596.77.  Presumably this is a weekly figure.  This was said to yield a reduction in earnings of $473.04 a week.  (The correct amount was $473.46 a week.)  Later, in a letter dated 19 August 2002 from the Respondent Worker’s solicitor to the Appellant Employer the weekly payments claim was for $1,019.23 from 1 November 2001 until 31 January 2002 and for $335.23 from 1 February 2002 and continuing. 

1. The Appellant Employer’s solicitor had lodged a wages schedule suggesting that the Respondent Worker was capable of earning as much as she had when working for it as of 1 November 2001 and continuing, ie $1,070.23 a week.

1. At the arbitration a different approach was taken.  The Respondent Worker’s representative turned the Arbitrator’s attention to the tax documents for 2001-02.  The tax return showed gross income of $28,297.  Other evidence indicated that she earned $23,545 gross from the Appellant Employer in 2001-02.  Her only other source of income in that year was from State Rail.  The gross income from there was taken to be $4,453.  This was divided by 22.43, said to be the number of weeks from 1 February to 27 June 2002.  The weekly average was said to be $198.53.  $871.70 became the weekly reduction in earning capacity accepted by the Arbitrator for the period of partial incapacity.

1. There are several problems with these figures.  First, the difference between the total gross income and the gross income earned from the Appellant Employer was $4,752, not $4,453.  The Respondent Worker worked for State Rail, according to the history Dr Prior took, from 1 February 2002 until two weeks before she saw him on 27 June 2002, that is until on or about 13 June 2002.  The Arbitrator used some incorrect figures.  The gross amount earned from the State Rail work was apparently $4,752.  The number of weeks of work that generated that figure was 19.00, not 22.43 as the Arbitrator found, given that the Respondent Worker had ceased the State Rail work two weeks before 27 June 2002.  The revised figures produce a weekly average earnings of $250.11.  Using this calculation, the reduction in the Respondent Worker’s weekly income for the period from 1 February 2002 to 13 June 2002 was $820.12.

1. The Appellant Employer has queried why this method has been adopted rather than use of the wages schedules.  The difficulty with the wages schedules was the lack of any explanation regarding the derivation of the figures.  The Respondent Worker’s tax return figures were replicated on the tax assessment issued for the same year.  In many contexts a tax assessment is regarded as good evidence of a taxpayer’s income unless and until it is queried and an audit is conducted.  There is no reason to believe that the Respondent Worker’s tax assessment for 2001-02 is vulnerable to challenge.

1. In assessing the weekly compensation payable before 1 February 2002 it was necessary to return to first principles and reassess the weekly rate.  It is necessary to do this again for the period of partial incapacity between 1 February and 27 June 2002. 

1. Between 1 February 2002 and 1 May 2002 the first 26 weeks of weekly compensation payments were still running and the Respondent Worker suffered from partial incapacity for work throughout that period. The Respondent Worker had obtained suitable duties so section 40 of the 1987 Act applied and she qualified for make up pay. The application of section 40 exposes another error in the Arbitrator’s approach, however, in that the Arbitrator failed to state that he was engaging in the five-step process set out in Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (Mitchell) at 529, in assessing the weekly payments. The steps are:

a)   To determine the weekly amount the worker would probably have been earning if uninjured (section 40(2)(a)).

b) To determine the average weekly amount that the worker is earning or would be able to earn in some suitable employment from time to time after the injury (section 40(2)(b)). Section 40(3) provides that the determination of this amount is subject to the following: (i) the determination is to be based on the worker’s ability to earn in the general labour market reasonably accessible to the worker;

(ii) the determination is to be made having regard to suitable employment for the worker within the meaning of section 43A.

c)   To subtract the figure derived from b) from the figure derived from a) (section 40(2)).

d)   To decide whether and to what extent the reduction calculated as above, bears such relation to the amount of that reduction as may appear proper in the circumstances of the case (section 40(1)).

e)   To make an award in the amount arrived at in d).

1. Applying these five steps, the weekly amount that the Respondent Worker would probably have been earning if uninjured was $1,070.23 in accordance with section 40(2)(a) of the 1987 Act. The amount had to be below the maximum permitted in section 35 of the 1987 Act, ie $1,259.20 up until 31 March 2002 and $1,281.30 from 1 April 2002 until 27 June 2002. The Arbitrator carried out this step in his analysis although he did not state that he was applying the five steps in Mitchell (paragraph 110 above).

1. In considering step b) of the five in paragraph 110 above, it appears that the Arbitrator considered that the Respondent Worker was engaged in suitable employment.  I see no error in that finding.  It was clerical work for State Rail that was within her reduced capacities following her injury.  Her actual earnings therefore were an appropriate indicator of her ability to earn.  The figures produce a weekly average earnings of $250.11, as explained above in paragraph 107.  Again, the Arbitrator carried out this step from Mitchell (paragraph 110 above) without stating that he was doing so.

1. Applying step c) from the five in paragraph 110 above, the amount of compensation in the form of weekly incapacity payments for the period from 1 February to 1 May 2002 was therefore prima facie $820.12 ($1,070.23 less $250.11). However, section 40(5) of the 1987 Act provides that the weekly payment of compensation to an injured worker in respect of any period of partial incapacity for work is not to exceed the weekly payment that would be payable to the worker if it were a period of total incapacity for work. The weekly payments were therefore limited to $609.50 (as explained above in paragraphs 100 and 101).

1. In considering step d) it is necessary for the Arbitrator to exercise his discretion to decide whether and to what extent the reduction calculated in paragraph 113 above bears such relation to the amount of that reduction as may appear proper in the circumstances of the case. The Arbitrator did not expressly consider whether the reduction in the Respondent Worker’s earnings bore such relation to the amount of that reduction as may appear proper in the circumstances of the case. While this was an error of law I consider that it can be cured at this appeal level. That is because, in addressing the discretion in section 40(1) of the 1987 Act, I consider that none of the factors that might result in a lesser reduction in earnings to be taken into account in deciding what should be the Respondent Worker’s weekly compensation applied in the present case. The Respondent Worker returned to ongoing work relatively soon after the injury occurred. On balance she appears to have acted reasonably in searching for, obtaining and remaining in appropriate work once her incapacity became partial rather than total. She merits receiving as full a measure of compensation as section 40 allows.

1. Step e) in paragraph 110 above requires a consequent award in the amount referred to in paragraph 113 above.  There will therefore be an order that the Respondent Worker is to be paid compensation at the rate of $609.50 a week from 1 February 2002 to 1 May 2002.

1. As of 2 May 2002 the first 26 weeks of incapacity had expired. Section 40(5) of the 1987 Act had the effect of restricting the weekly compensation rate to that payable after 26 weeks to a worker who is totally incapacitated for work. Section 37(1) provides a statutory maximum that was payable weekly to the Respondent Worker between 2 May 2002 and 27 June 2002. During that period the statutory maximum for a worker such as the Respondent Worker with two dependent children was $428.40 a week. This analysis was not part of the Arbitrator’s decision. There was therefore a series of errors of law in the Arbitrator’s calculation of the rates of weekly compensation payable to the Respondent Worker at various times between 2 November 2001 and 27 June 2002.

Did the Arbitrator err in the form of the award of compensation for medical expenses?

1. This relates to Submission 19 in paragraph 45 above. What the Arbitrator has done is to say that the Respondent Worker may be entitled to compensation under section 60 of the 1987 Act in respect of medical or related treatment reasonably necessary as a result of the injury received by her up to a maximum limit of $5,000. He made this conditional on the Respondent Worker producing receipts, invoices or HIC notices. At the time of the arbitration the Respondent Worker had incurred expenses of only some $644 for her sessions with Ms Muller. The Appellant Employer’s representative was prepared to concede that it should pay those expenses if the Appellant Employer was found liable to pay compensation. There was a possibility of other necessary expenses emerging once the HIC notices became available.

1. The Arbitrator erred in law in making this award in these terms. The President of the Commission addressed the issue of the proper form of orders under section 60 in Water Taxis Combined Pty Ltd v Wells [2004] NSW WCC PD 30 where he said:

“94. The 1987 Act provides for a worker to be compensated for reasonable medical costs, actually incurred and properly verified, resulting from an injury (see section 60(3) of the 1987 Act).

95. An Arbitrator, therefore, does not have the power to make an order for the specified payment of medical expenses based upon an estimate of the likely future costs. An Arbitrator is entitled to find that an employer is liable to pay a worker for medical or related treatment, including future medical or related treatment, in accordance with section 60 of the 1987 Act. An employer, however, will not be liable to pay the worker’s section 60 expenses until they have been incurred and properly verified.

96. The Arbitrator in this case has erred in making an order for a fixed sum for the payment of medical expenses not yet incurred and properly verified.

97. I, therefore, revoke the relevant part of order C made by the Arbitrator, to the effect that:

‘The Respondents pay the Applicant’s expenses… [of] $2000 per annum for physiotherapy and massage.’

98. The simplest solution would be to substitute the following as order C:

The Respondents are to pay the Applicant’s expenses under section 60 of the Workers Compensation Act 1987, on production of accounts or receipts, on a contribution basis of 25% by the First Respondent and 75% by the Second Respondent, such expenses to include $4968.09 incurred to date, plus all appropriate physiotherapy and remedial massage expenses.”

1. What this means is that an order under section 60 cannot specify an amount that will be payable at a time in the future. The provision is an indemnity provision and expenses must be incurred before an employer can be liable to pay them. The Arbitrator therefore erred in law in ordering that compensation be paid up to a maximum of $5,000 when the Respondent Worker had not accrued a liability to pay an amount of such a magnitude. A correct form of order would have been:

The Appellant Employer is to pay the Respondent Worker’s expenses under section 60 of the Workers Compensation Act 1987, on production of accounts or receipts, such expenses to include $644.00 incurred to date.

DECISION

1. The Arbitrator’s decision is revoked and the following decision is made in its place:

1.That the Appellant Employer pay the Applicant pursuant to section 36 of the Workers Compensation Act 1987, $609.50 per week for the period from 2 November 2001 until 31 January 2002.

2.That the Appellant Employer pay the Applicant pursuant to section 40 of the Workers Compensation Act 1987, $609.50 per week for the period from 1 February 2002 until 1 May 2002.

3.That the Appellant Employer pay the Applicant pursuant to section 40 of the Workers Compensation Act 1987, $428.40 per week for the period from 2 May 2002 until 27 June 2002.

4.The Appellant Employer is to pay the Respondent Worker’s expenses under section 60 of the Workers Compensation Act 1987, on production of accounts or receipts, such expenses to include $644.00 for treatment expenses incurred with Ms Muller.

COSTS

1. The Appellant Employer is to pay the Respondent Worker’s costs as agreed or assessed.  (Although the Appellant Employer has been partially successful in this appeal this has not been substantially as a consequence of the submissions raised on the Appellant Employer’s behalf.) 

Michael Sassella

Acting Deputy President  

14 July 2005

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF MICHAEL SASSELLA, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE