Attorney General's Department v K

[2010] NSWWCCPD 76

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
STATUS: Reported Decision: Attorney General’s Department v K (2010) 8 DDCR 120
CITATION:		Attorney General’s Department v K [2010] NSWWCCPD 76
APPELLANT:		Attorney General’s Department
RESPONDENT:		K
INSURER:		Allianz Australia Insurance Limited
FILE NUMBER:		A1-41/10
ARBITRATOR:	Mr J McGruther
DATE OF ARBITRATOR’S DECISION:		18 March 2010
DATE OF APPEAL DECISION:		21 July 2010
SUBJECT MATTER OF DECISION:		Psychological injury; relevance of worker’s perception of events; excessive workload; causation; unsuccessful application for promotion; whole or predominant cause; section 11A of the Workers Compensation Act 1987; application of State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249; (2007) 5 DDCR 286; unmeritorious appeal; obligation of legal practitioners to comply with section 345 of the Legal Profession Act 2004 when certifying reasonable prospects of success in Part 3 of Appeal Against Decision of Arbitrator
PRESIDENTIAL MEMBER:		Acting President Bill Roche
HEARING:		On the papers
REPRESENTATION:		Appellant:	SMK Lawyers
Respondent:	WG McNally Jones Staff
ORDERS MADE ON APPEAL:		For the reasons given by the Arbitrator, and for the additional reasons in this decision, the Arbitrator’s determination of 18 March 2010 is confirmed.
The appellant employer is ordered to pay the respondent worker’s costs of the appeal, assessed at $2,200 plus GST.

BACKGROUND

1.The respondent worker is a solicitor. She worked in that capacity for the appellant employer from about December 2000. She claimed weekly compensation from 2 June 2009 until 13 December 2009 as a result of a psychological injury (Adjustment Disorder with Depressed and Anxious Mood and a Major Depressive Episode) allegedly received by her due to an excessive workload, chronic pain from a work-related foot injury and harassment at work.

2.The appellant employer’s workers compensation insurer, Allianz Australia Insurance Limited (‘Allianz’), disputed liability for the claim in a section 74 notice dated 12 March 2009 on the grounds that the worker’s condition had arisen as a consequence of her “misperception of events”, such that the injury did not arise out of or in the course of employment and was not “substantially work related”. Further, or in the alternative, any psychological injury had been wholly or predominantly caused by reasonable action taken by the employer with respect to “performance appraisal and promotion” (section 11A Workers Compensation Act 1987 (‘the 1987 Act’)).

3.Allianz relied on a report from Ms Clarke, psychologist, dated 24 April 2008, in which it was noted that the worker had been “upset” in relation to her “unsuccessful applications for 9 promotions in the past 3 years”. The notice stated that the worker’s failure to achieve promotion in her job was the “whole or predominant cause” of her psychological condition. The insurer did not dispute incapacity.

4.The Commission listed the worker’s application for conciliation and arbitration on 3 March 2010. On that day, each party was legally represented. The Arbitrator heard lengthy submissions, but took no oral evidence.

5.In a reserved decision delivered on 18 March 2010, the Arbitrator found that the worker had received a psychological injury arising out of or in the course of her employment to which her employment had been a substantial contributing factor. He was not satisfied that the injury had been wholly or predominantly caused by reasonable action taken by the appellant employer with respect to performance appraisal and/or promotion.

6.The Commission issued a Certificate of Determination on 18 March 2010 in the following terms:

“The Commission determines:

1.          That the Applicant has suffered a psychological injury pursuant to sections

4, 9A and 11A(3) of the 1987 Act.

2. The defence of the Respondent urged pursuant to section 11A(1) of the

1987 Act is not made out.

3.          There is an Award for the Applicant relative to her claim for weekly

benefits as follows:

(a)        For the period 2 June 2009 to 26 July 2009 weekly at $315.30 (total

incapacity);

(b)        27 July 2009 to 4 November 2009 at $1347.44 weekly (s.38);

(c)        5 November 2009 to 30 November 2009 at $396.10 weekly (s.40);

and,

(d)        1 December 2009 to 13 December 2009 at $330.80 weekly.

4.          There is an Award for the Applicant in relation to her section 60 medical

expense claim as follows:

(a)A General Order that the Respondent is to meet the Applicant's reasonably necessary section 60 medical expenses attendant upon her treatments for psychological injury upon production of accounts and/or receipts.

(b)The notation is made that as at 9 February 2010 the accumulated total of section 60 medical expenses to that date is $2,007.

5.The Respondent is to meet the Applicant’s costs as agreed or assessed. I declare the proceedings as complex and with a discretionary costs uplift of twenty-five per cent (25%) to be mutually applied (including for the reasons stated).”

7.In an appeal filed on 15 April 2010, the appellant employer seeks leave to challenge the Arbitrator’s determination of 18 March 2010.

LEAVE TO APPEAL

Monetary threshold

8.Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).

9.It is not disputed that the monetary thresholds in section 352(2) of the 1998 Act are satisfied.

Time

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

11.I grant leave to appeal.

ON THE PAPERS

12.Section 354(6) of the 1998 Act provides:

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

13.The appellant employer has submitted that, because of the complex factual matrix in this case, the Commission should list the appeal for oral hearing. The worker consents to the matter being dealt with on the papers.

14.The appellant employer has had every opportunity to provide written submissions in support of the review and has done so. Though the evidence is voluminous, the issues on appeal are within a narrow compass and the parties have dealt with them in their written submissions. I do not believe an oral hearing would assist me.

15.Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the worker 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. 

FRESH EVIDENCE

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

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

17.The appellant employer seeks to rely upon fresh evidence or additional evidence on appeal in the form of a medical certificate from Dr Donohoe dated 16 April 2009. That certificate diagnosed the worker as suffering from “chemical sensitivity causing fatigue syndrome” and described the injury as having occurred due to “exposure to chemicals in the workplace”. It gave a date of injury of 18 November 2008.

18.In support of the application to rely upon this certificate, the appellant employer’s solicitor, Ms Smuts, submitted that the certificate “was not previously available to the appellant in respect of the claimed psychological injury claim”. She noted that the certificate related to the worker’s concurrent claim for chemical sensitivity for which she was certified unfit from 10 April 2009 until 10 June 2009. This period covers part of the period of total incapacity awarded by the Arbitrator due to the worker’s psychological injury and for which the worker provided no medical certificate.

19.The worker has opposed the admission of Dr Donohoe’s certificate.

20.The Court of Appeal considered the introduction of fresh evidence or additional evidence on appeal in Haider v JP Morgan Holdings Aust Ltd t/as JP Morgan Operations Australia Ltd [2007] NSWCA 158; (2007) 4 DDCR 634, where Basten JA referred to Akins v National Australia Bank (1994) 34 NSWLR 155 (‘Akins’) and other authorities. In Akins, Clarke JA (Sheller JA and Powell JA agreeing) stated at 160 that three conditions need to be met before “fresh evidence” can be admitted:

“These are: (1) It must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; (2) The evidence must be such that there must be a high degree of probability that there would be a different verdict; (3) The evidence must be credible.”

21.However, in Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; (2001) 53 NSWLR 116 Heydon JA stated at [15]:

“Even if the three tests stated in the Akins case are applicable and are not satisfied, a question remains: is it just to admit the further evidence in this case?”

22.In considering an application to rely on fresh evidence or further evidence on appeal, the Commission must balance two competing requirements: the public interest that litigation should not continue indefinitely against the need to ensure that justice is done in all the circumstances of the case. In balancing these matters, the Commission must also keep in mind its statutory duty to act “according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms” (section 354(3) of the 1998 Act).

23.I refuse the application to rely on Dr Donohoe’s certificate of 16 April 2009 as fresh evidence or additional evidence on appeal. My reasons are as follows:

(a)the insurer never disputed incapacity in its section 74 notice and the appellant employer has made no application (either at the arbitration or on appeal) for leave to amend that notice. Had such an application been made on appeal, it is extremely unlikely that it would have succeeded;

(b)the appellant employer has offered no proper explanation as to why the certificate was not tendered at the arbitration;

(c)if the evidence had been tendered at the arbitration (after having been served with the section 74 notice) the worker would have been in a position to meet it with medical evidence. That having not been done, the worker would be unfairly prejudiced by the admission of the evidence on appeal;

(d)the evidence is not such that there is a high degree of probability that there would be a different result. Even if the worker had been unfit for work because of chemical sensitivity for part of the period for which she claimed compensation for her psychological injury, that fact would not, on its own, have prevented the worker from recovering an award (see section 48 of the 1987 Act);

(e)counsel for the appellant employer at the arbitration stated that he did not rely on any documents “in relation to the respiratory condition” (T4.27) because that was not his defence. Ms Smuts has advanced no reason why the appellant employer should be permitted to depart from that position. Parties are reminded, yet again, that arbitrations are not a trial run where the parties can await to see the outcome and then decide to present a different case on appeal, and

(f)in all the circumstances, it is not in the interests of justice that the certificate be admitted into evidence as additional evidence or fresh evidence on appeal.

ISSUES IN DISPUTE

24.The issues in dispute in the appeal are whether the Arbitrator erred in:

(a)making an award of weekly compensation in favour of the worker on the basis of total incapacity from 2 June 2009 until 26 July 2009 (‘weekly benefits award’);

(b)failing to give any reasons for discounting the evidence addressing “promotional failure on 9 separate occasions prior to February 2008” (‘failure to give reasons’);

(c)finding that the worker’s injury arose out of or in the course of her employment (‘injury’);

(d)failing to give adequate reasons for his decision that “the workload was such that it gave rise, and was the substantial contributing factor, to a psychological injury” (‘injury’), and

(e)the application of section 11A of the 1987 Act by failing to find that the worker’s injury had been predominantly caused by “reasonable action taken by the [employer] with respect to promotion” (‘section 11A’).

SUBMISSIONS, DISCUSSION AND FINDINGS

Weekly benefits award

25.Ms Smuts has submitted that the Arbitrator erred in making an award for total incapacity from 2 June 2009 to 26 July 2009 in circumstances where the worker provided no medical certificates for that period.

26.This submission was more than a little surprising. Allianz never disputed the incapacity in its section 74 notice. The Arbitrator, at [18] of his decision, noted that the appellant employer had not disputed the periods and amounts claimed. Counsel for the appellant employer conducted the arbitration on the basis of the issues identified in the section 74 notice. As a result, neither party made any submissions on incapacity at the arbitration.

27.This ground of appeal was completely without merit.

Failure to give reasons

28.Ms Smuts has submitted that, when the worker was unsuccessful for promotion in September 2007, she stated that she would not work as hard as she had been. She argued that this was an “adverse reaction” that ought to have been addressed by the Arbitrator in his decision on section 11A.

29.Ms Smuts added that the section 74 notice relied upon the failure to achieve promotion on nine separate occasions in the three years up to February 2008, not the single communication of the failure to be promoted in February 2008. It was submitted that the Arbitrator failed to make any reference to the worker’s “successive failures to obtain promotion” identified in the section 74 notice and did not give any reasons why he did not take those matters into account.

30.The Arbitrator dealt with the section 11A defence at [118] to [153] of his decision. He accepted that the “promotional incident” in February 2008 (when the worker was advised on 5 February that her most recent application for promotion had been unsuccessful and she ceased work) was “a factor” in the worker leaving work. However, he did not accept that it was the whole or predominant cause of the worker’s psychological injury. Whilst the Arbitrator focused mainly on the February 2008 failure, his reference (at [98]) to the “lack of continued promotional success” demonstrated his awareness that the worker had failed to achieve promotion on more than one occasion.

31.The Arbitrator correctly noted that the “centrepiece” of the appellant employer’s argument was that “any psychological injury exhibited itself singularly in a promotional application failure communication in February 2008” from which all else flowed (Reasons at [113]). After exhaustively analysing that issue, and the arguments surrounding it, the Arbitrator did not agree. He found (at [138]) that “workplace matters” brought about the worker’s departure on 5 February 2008 and the “promotional issue” was not the predominant cause of that departure.

32.The Arbitrator correctly noted that the appellant employer carried the onus of proof to establish its defence under section 11A and that he was not satisfied that the onus had been discharged (Reasons at [139]).

33.The Arbitrator referred to the worker having been “upset” at missing “two promotions she had applied for” in September 2007 (Reasons at [132]). He added, however, that those antecedent “promotion” initiatives were in the “milieu of other workplace matters”. He correctly observed that the worker’s departure in February 2008 had to be “carefully considered in total context” (Reasons at [140]).

34.Consistent with that statement, the Arbitrator observed (at [150]) that, in effect, the worker’s psychological injury resulted from “antecedent events of a work impact” that did not have their “causation wholly or predominantly residing in the ‘promotional question’”. He then referred to the “workload factor” which permeated “almost the entirety of the statement material of the applicant with a degree of consistency” (Reasons at [151]). He found that much of that evidence was “matched” by treating medical evidence, which he accepted in preference to the evidence from Ms Clarke. I agree with that assessment and finding.

35.If there were any doubt about it, the Arbitrator added (at [152]), that the “promotional exigency”, the last being in February 2008, was not the whole or predominant cause of the worker’s psychological injury.

36.I am comfortably satisfied that the Arbitrator comprehensively explained the basis for his conclusion on this issue. I do not accept that he failed to consider the fact that there was more than one unsuccessful application for promotion.

37.If the Arbitrator erred in the manner suggested by Ms Smuts, it makes no difference to the end result. Ms Smuts has referred to the worker’s statement dated 9 April 2008. In that statement, the worker said that, given that she had been unsuccessful in her application for promotion in September 2007, she would not work as hard as she had been. Even if I were to accept that that statement indicated an “adverse reaction” by the worker, such a reaction does not, either on its own or taken with the other unsuccessful applications for promotion, establish a defence under section 11A.

38.To succeed with a defence under that section, the employer must establish that the worker’s psychological 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, in this case, promotion. The suggestion that the worker may have had an “adverse reaction” to the lack of success in her September 2007 application for promotion falls well short of establishing that her psychological injury was wholly or predominantly caused by reasonable action taken with respect to promotion.

39.It is correct that, in his report of 4 July 2008, Dr Ross, the treating psychiatrist, referred to the failure to obtain promotion in September 2007. However, Dr Ross did not suggest that that failure, either on its own or combined with the other failures, was the whole or predominant cause of the worker’s psychological injury. He stated that it was unfortunate that the worker’s psychological deterioration had been attributed to her failure to achieve promotion and there “was an inadequate response in referring her for psychological help and in reducing her workload as she had requested” (Dr Ross 4 July 2008, page 6). This passage implies that Dr Ross believed the worker’s condition had been wrongly attributed to her failure to achieve promotion. This evidence gives the appellant employer no support.

40.Whilst I agree with the Arbitrator’s general analysis of this issue, there is a far more cogent reason why the appellant employer’s defence under section 11A must fail. The appellant employer simply called no relevant evidence on that issue. The reference to allegations in the section 74 notice was, without more, completely meaningless. Though Ms Smuts has criticised the Arbitrator for failing to refer to the “successive failures to obtain promotion”, that criticism was unfounded. The evidence only dealt in any detail with two unsuccessful applications for promotion, one in September 2007 and one in December 2007. The appellant employer advised the worker of the unsuccessful outcome of the December 2007 application on 5 February 2008. As there is no detail of any other unsuccessful applications, it is hardly surprising that the Arbitrator’s reasons focused mainly on February 2008.

41.Ms Smuts also relied on Ms Clarke’s report of 24 April 2008. That report concluded that the worker had not received a psychological injury. Therefore, Ms Clarke did not consider if the psychological injury had been caused by reasonable action taken by the appellant employer in respect of promotion. On her analysis, the section 11A issue did not arise. This is discussed further at [88] to [97] below.

Injury

42.Ms Smuts has submitted that, essentially, the appellant employer’s argument at the arbitration was that the “harassment”, “victimisation” and “excessive workload” alleged to have caused the worker’s injury amounted to a “misperception” of events.

43.Ms Smuts referred to State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249; (2007) 5 DDCR 286 (‘Chemler’) and Townsend v Commissioner of Police (1992) 25 NSWCCR 9 (‘Townsend’). She then submitted that Deputy President O’Grady “noted” the following test put forward by the appellant (who was represented by Ms Smuts) in the matter of Department of Ageing and Homecare v Pye [2010] NSWWCCPD 18 (‘Pye’), which was “capable of being applied to matters in which a perception issue arises”:

“(i) Can the events be objectively considered to be ‘real events’ or objectively considered to be ‘external events’?

(ii) Is there a causal relationship between the real events and the injury?

(iii) Was the perception of, or the reaction to the real events, being the causal nexus, ‘accurate’? In considering whether the perception was accurate there must be an objective examination of whether the response was rational, reasonable and proportionate in the face of the events that transpired.”

44.Whilst it is true that Deputy President O’Grady “noted” the above “test” in Pye, a fair reading of his decision demonstrates that he did not accept that test as a proper test for the Commission to apply in cases of this kind. He found (at [115]) that Ms Pye had reacted to real events that occurred at work and that there had been no “erroneous perception of external events”.

45.Ms Smuts’s submission seems to be based on the purported application of Townsend in Yeo v Western Sydney Area Health Service (1999) 17 NSWCCR 573 (‘Yeo’). In Yeo, the trial judge held that “a misperception by a worker of otherwise innocuous matter, which misperception leads a worker to develop a psychiatric condition, does not constitute injury arising out of or in the course of employment”.

46.Spigelman CJ (Basten JA and Bryson AJA agreeing) observed in Chemler that Yeo stated the principle in Townsend too broadly. The Chief justice stated (at [54]) that:

“As McGrath CJ Comp Ct indicated, as quoted above, a ‘perception of real events’, which are not ‘external events’, can satisfy the test of injury ‘arising out of or in the course of employment’.”

47.As Spigelman CJ observed (at [40]) in Chemler:

“In this area of law, as in negligence, the talem qualem principle is applicable i.e. employers take their employees as they find them. With respect to psychological injury there is an ‘eggshell psyche’ principle which, like the equivalent ‘eggshell skull’ principle, is a rule of compensation not of liability. The element of foreseeability required by the law of negligence is not the basis of the ‘eggshell skull’ principle and it can be applied by way of analogy to claims for compensation under the 1987 Act. (See Morgan v Tame [2000] NSWCA 121; (2000) 49 NSWLR 21 esp at [23]-[29] and cases quoted therein. See also Tame v New South Wales [2002] HCA 35; [2002] HCA 35; (2002) 211 CLR 317 esp at [318] and Nominal Defendant v Gardikiotis [1995] HCA 56; (1995) 186 CLR 49 at 68.)”

48.Basten JA noted (at [69] of Chemler):

“If conduct which actually occurred in the workplace was perceived as creating an offensive or hostile working environment, and a cognizable injury followed, it was open to the Commission to conclude that causation was established. Accordingly, no error in point of law was identified by this ground.”

49.The relevance of a worker’s perception was considered by President Hall in the Industrial Court of Queensland in Leigh Sheridan v Q-Comp [2009] QIC 12; 191 QGIG 13 (‘Sheridan’). That case concerned an appeal from an Industrial Magistrate where the Magistrate held, consistent with the appellant employer’s submissions in the present case, that “Any difficulties she had in the workplace were perceptions she held which were on the evidence, totally unfounded. Any problems the appellant had with Ms Crumpton are more accurately described as a clash of personality…”. In upholding the appeal from the Magistrate’s decision, President Hall stated:

“On its face, that passage is not consistent with authority and avoids a major issue raised by the Appellant. In respect to psychological injury, there is an ‘egg-shell psyche’ principle which is the equivalent of the ‘egg-shell skull’ principle, compare State Transit Authority of New South Wales v Chelmer [2007] NSWCA 249 at paragraph 40 per Spigelman CJ. So long as the events within the workplace are real rather than imaginary, it matters not that they impact upon the claimant’s psyche because of a flawed perception of events attributable to a disordered mind, compare Federal Broome Co Pty Ltd v Semlitch [1964] HCA 34; (1964) 110 CLR 626 at 643 per Windeyer J, Westgate v Australian Telecommunications Commission (1987) 17 FCR 235 and Q-COMP v Foote (2008) 189 QGIG 802 at 810. Further, to resort to a notion of ‘clash of personalities’ is not to deny the Appellant’s claim. The inability of a worker to psychologically cope with an attitude or manner of another worker is analogous to a worker being unable to cope with any other feature, including a physical feature, or aspect of the work environment, Flinders Power Operating Services Pty Ltd (formerly NRG Flinders Operating Services Pty Ltd) v Amato [2007] SAWCT 33 at paragraph 125.”

50.Von Doussa J considered the relevance of a worker’s perception in the context of section 4 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) in Wiegand v Comcare Australia [2002] FCA 1464 (‘Wiegand’). In that case, the worker made a claim for compensation for major depression that allegedly resulted from “[d]efamation and victimisation in 1990 … [o]ngoing discrimination etc …” in the course of his employment with the Australian Tax Office (‘the Tax Office’). The issue was whether the ailment, or an aggravation of it, “was contributed to in a material degree by the employee’s employment”.

51.The Administrative Appeals Tribunal held, accepting expert evidence called by the Tax Office, that an incident or state of affairs to which the employee was exposed in employment would only constitute a contributing factor to an aggravation of an ailment if the incident or state of affairs was “objectively unreasonable – in other words, that it would justify in the mind of an employee of ordinary disposition and mental health the perception held by the employee making the claim” (at [29]). In overturning that finding, Von Doussa J said (at [31]):

“In my opinion it was open on the evidence for the Tribunal to hold that one or more of the incidents or states of affairs about which Mr Wiegand raised complaint in the course of his evidence contributed in a material degree to an aggravation of the depressive disorder suffered by Mr Wiegand. For that to be the case there is no requirement at law that the interpretation placed on the incident or state of affairs by the employee, or the employee’s perception of it, is one which passes some qualitative test based on an objective measure of reasonableness. If the incident or state of affairs actually occurred, and created a perception in the mind of the employee (whether reasonable or unreasonable in the thinking of others) and the perception contributed in a material degree to an aggravation of the employee’s ailment, the requirements of the definition of disease are fulfilled.”

52.The following conclusions can be drawn from the above authorities:

(a)employers take their employees as they find them. There is an “egg-shell psyche” principle which is the equivalent of the “egg-shell skull” principle (Spigelman CJ in Chemler at [40]);

(b)a perception of real events, which are not external events, can satisfy the test of injury arising out of or in the course of employment (Spigelman CJ in Chemler at [54]);

(c)if events which actually occurred in the workplace were perceived as creating an offensive or hostile working environment, and a psychological injury followed, it is open to the Commission to conclude that causation is established (Basten JA in Chemler at [69]);

(d)so long as the events within the workplace were real, rather than imaginary, it does not matter that they affected the worker’s psyche because of a flawed perception of events because of a disordered mind (President Hall in Sheridan);

(e)there is no requirement at law that the worker’s perception of the events must have been one that passed some qualitative test based on an “objective measure of reasonableness” (Von Doussa J in Wiegand at [31]), and

(f)it is not necessary that the worker’s reaction to the events must have been “rational, reasonable and proportionate” before compensation can be recovered.

53.The principles discussed in Chemler, which are consistent with Wiegand and Sheridan, have been applied by the Commission in several cases (see South Eastern Sydney and Illawarra Area Health Service v Nikolis [2009] NSWWCCPD 74; Callingham v Tophos Pty Ltd t/as Central Coast Easy Care [2008] NSWWCCPD 140; Roads and Traffic Authority of New South Wales v Gentle [2009] NSWWCCPD 111). It is surprising and unsatisfactory that Ms Smuts has again presented the same argument that her client presented in Pye and which Deputy President O’Grady rejected. The argument is inconsistent with established authority and is plainly wrong.

54.The critical question is whether the event or events complained of occurred in the workplace. If they did occur in the workplace and the worker perceived them as creating an “offensive or hostile working environment”, and a psychological injury has resulted, it is open to find that causation is established. A worker’s reaction to the events will always be subjective and will depend upon his or her personality and circumstances. It is not necessary to establish that the worker’s response was “rational, reasonable and proportional”, as Ms Smuts has submitted.

55.Ms Smuts also submitted that:

(a)the Arbitrator was incorrect to disregard the labels provided by the worker to describe perceived events in the workplace, because the language used by the worker to describe her understanding of the cause of her symptoms was “indicative of her irrational perception of events”;

(b)the Arbitrator failed to consider whether the worker’s perceptions were erroneous or irrational;

(c)there was no objective evidence provided to support the worker’s allegation that she was “targeted, bullied, harassed or victimised by her managers or supervisors”. To the contrary, the worker’s allegations were “wholly denied” by the worker’s managers;

(d)the Arbitrator “could not make out” of the evidence provided that the worker had been subjected to any harassment, victimisation or bullying, but concluded (at [94]) that he did not accept that the worker’s account of matters should be determined as “irrational” because of the way she described the events;

(e)the Arbitrator misjudged the assessment required for misperception. It was not submitted on behalf of the appellant employer that there had to be a “weighing up of emotion”;

(f)the worker’s language describing the events causative of her condition provided the only understanding of her perception of those events and had to be considered when comparing her perception with the real events for the purpose of ascertaining whether the real events (as opposed to the worker’s perception) were in fact “potentially damaging”;

(g)whilst there was a short term “spike” in the worker’s workload in September 2007, the worker’s perception was not “accurate” and her workload was not “ridiculous” but was “reasonable and appropriate given the worker’s position”;

(h)from an objective viewpoint, the worker’s response “was not rational on the face of the events that transpired”;

(i)there was a spike in work hours in July and August 2007 only. Consideration of what constituted an excessive workload could not be made “in a vacuum” and had to be considered “weighing the skills, experience and contractual expectations existing in the individual workplace”. The worker was employed as a solicitor with an expected five minimum billable hours per day;

(j)the Arbitrator failed to give adequate reasons for accepting the worker’s stated excessive workload without regard to the factual information provided by the appellant  employer with respect to the actual average hours worked and the context of the worker’s employment environment, which was directed by the exigencies of court timetables and deadlines, and

(k)the Arbitrator did not explain how the worker’s pursuit of promotions to a higher grade position of senior solicitor was consistent with her allegation that she felt unable to manage the workload expected of a lower grade position.

56.I do not accept Ms Smuts’s submissions.

57.These submissions are inextricably bound to the incorrect assumption that a worker’s reaction to events at work must be “rational, reasonable and proportionate” before a worker can succeed. Though the worker’s reference to “bullying and harassment” may be seen, on one view, as an overstatement, the worker’s perception was that she had been unfairly treated at work over work matters. It is indisputable that she based that perception upon real events that happened at work.

58.As the above authorities demonstrate, the Arbitrator did not have to consider if the worker’s perception was erroneous or irrational. He had to determine if the events complained of actually occurred and, if they did occur, whether the worker’s injury resulted from them. He therefore did not err in disregarding the labels the worker attached to the circumstances that gave rise to her injury.

59.Counsel for the appellant employer submitted at the arbitration that the case turned on the worker’s credit and whether the Arbitrator accepted her evidence. The Arbitrator accepted the worker’s evidence. He was right to do so. Because of the consistency of her complaints, which were largely corroborated by the evidence from her treating general practitioner, Dr Au, and her treating psychiatrist, Dr Ross, and, in part, by the evidence from her manager, I also accept her evidence.

60.The events complained of included a very demanding workload. The evidence was that it was not uncommon for the worker to work nine- or ten-hour days, through her lunch breaks and on weekends. Because of her workload, she had difficulty taking holidays, flex leave and other leave. That she worked long hours was corroborated by her flex sheets attached to her statement of 4 November 2009.

61.The appellant employer conceded an increase in the worker’s workload in the second half of 2007. As a result, the worker complained to Dr Au in August 2007 that she felt “physically and mentally exhausted” and that she had been pushed to the limit. Dr Au diagnosed an Adjustment Disorder with Depressed Mood triggered by a combination of chronic foot pain (which resulted from a work injury), a toxic environment characterised by unsympathetic superiors, harassment and excessive workloads.

62.Dr Ross took a similar history in his report of 4 July 2008. I accept, as the Arbitrator did, that the worker had a demanding workload and that, on occasions, she worked back until 8.00 or 9.00 pm, and often took work home. It was at the time of her increased workload that she saw Dr Au complaining of physical and mental exhaustion. His diagnosis of Adjustment Disorder with Depressed Mood was consistent with her complaints and with Dr Ross’s conclusion in his July 2008 report. Those conclusions were compelling and the Arbitrator rightly preferred them to Ms Clarke’s opinions.

63.In a detailed statement dated 2 October 2008, the worker has challenged Ms Clarke’s history, observations and conclusions. She disputed that she did not present to Ms Clarke with any signs of distress, noting that she had been significantly distressed at having to recount the events that occurred at work and had been crying through approximately 50 per cent of the interview.

64.In response to Ms Clarke’s statement that the worker did not report any significant impairment to her daily or social functioning, the worker stated that Ms Clarke did not question her at length concerning her mood. Given that Ms Clarke’s report was essentially an investigation report, and given the history of significant symptoms recorded by Dr Ross and Dr Au, I accept the worker’s evidence.

65.I also accept the worker’s evidence that there were days when she was so depressed that she had been unable to get out of bed, communicate or interact with anyone, or participate in any outside activities. This evidence is contrary to Ms Clarke’s history that the worker did not report any significant impairment in social functioning.

66.As the treating psychiatrist, Dr Ross saw the worker on several occasions and had the opportunity to observe her over a much longer period than Ms Clarke had. His history was consistent with the worker’s evidence and with Dr Au’s observations in August 2007. Based on his experience and qualifications as the treating psychiatrist, together with the corroborative evidence from Dr Au, Dr Ross’s conclusion that the worker suffered from an Adjustment Disorder with Depressed and Anxious Mood and a Major Depressive Episode because of her work circumstances was compelling and the Arbitrator was right to accept it in preference to Ms Clarke’s evidence.

67.Dr Ross’s conclusion was consistent with that expressed by the only other psychiatrist to examine and report on the worker, namely, Dr Rees. Dr Rees examined the worker on behalf of Health Services Australia to assess her fitness to return to work. The Arbitrator allowed Dr Rees’s report into evidence, as part of the worker’s case, despite objection by the appellant employer, on the ground that it was not a forensic medical report because it had been obtained by the employer in a context of return to work analysis and not “for the purposes of proving or disproving an entitlement…in respect of a claim or dispute” (clause 43(4)(a) of the Workers Compensation Regulation 2003). The appellant employer has not on appeal challenged the Arbitrator’s ruling and my preliminary view is that the Arbitrator was right to allow Dr Rees’s report into evidence.

68.I have reached a similar view of Dr Dowda’s report, to which the appellant employer also objected at the arbitration, but not on appeal. Even if these reports had been excluded, it would have made no difference to the result, as the worker has comfortably established her case with the evidence from Drs Ross and Au.

69.The evidence concerning the worker’s demanding workload was partly corroborated by the appellant employer’s evidence. The worker’s manager stated on 16 April 2008 that the group in which the worker practised was a “very busy team” with all solicitors having “active practices”. He added that the worker’s practice was “generally” no busier than other solicitors were. Whilst that may well have been the case, it does not disprove the worker’s complaint that she had a demanding workload and that that workload contributed to her injury.

70.The manager’s statement that the worker’s average billable hours in 2006/2007 were 4.94 per day was only part of the history. His evidence failed to take account of the fact that the worker only worked part-time from August 2006 to January 2007 and yet still averaged almost five billable hours per day. The worker’s time sheets have corroborated that, for a significant period in the second half of 2007, she worked very long hours. I accept that she had a heavy workload, that she worked long hours and that her workload played a significant part in causing her injury.

71.The manager’s statement that, at the time the worker ceased work in February 2008, she had a lower workload than other solicitors did not take into account that she had only just returned from leave. Nor did it reflect the fact that the worker had felt at a high risk of a nervous collapse due to work pressures from August 2007.

72.The evidence from the appellant employer’s business services manager was that he could not comment specifically on the worker’s workload, as he did not observe her work. I therefore place little weight on his evidence.

73.I do not accept Ms Smuts’s submission that consideration of what constituted an excessive workload had to be assessed by “weighing the skills, experience and contractual expectations existing in the individual workplace”. The question was whether the worker found the workload excessive and whether, as a result, she suffered an injury. The fact that the worker was employed as a solicitor with an expected five minimum billable hours per day was irrelevant to that issue.

74.In respect of the worker’s allegation that she had been harassed at work, the events on 26 September 2007 were significant. Though some documents refer to this incident happening on 27 September, nothing turns on the discrepancy. On that day, the worker left a telephone message with a secretary saying that she was unable to attend court, or the office, because of ill-health. That message was passed to the worker’s manager at about 9.25 am. He telephoned the worker at home at about 9.30am. He agreed that the worker sounded unwell. He made enquiries about the location of certain affidavits that were required in court that morning. He then said to her words to the effect that her failure to call him to discuss arrangements for the conduct of her matter in court had been “totally unprofessional”. He said that his tone of voice in the conversation made it clear that he was “very dissatisfied with her conduct”. He added that he was “frank and stern”, but did not raise his voice.

75.After the manager took several days of recreation leave, he spoke to the worker again about the matter on the afternoon of 5 October 2007. He reiterated that, when he spoke to her on the telephone on 26 September, he was “very dissatisfied” about her conduct. He apologised for the “sternness” of his tone of voice, but repeated that it had been unprofessional of her not to call him personally to inform him that she was unwell so that proper arrangements could be made for the conduct of a matter that was part-heard in the Supreme Court. The worker said that she considered that the manager had harassed her and that she was considering making a complaint. He denied having harassed her, but said that she should make a complaint if she thought it was appropriate to do so. The worker lodged no complaint at that stage.

76.I accept the worker’s evidence in her statement of 2 October 2008 that, after the September 2007 telephone conversation with the manager, she “dreaded going into work” as she “feared that he would continue to abuse” her. She felt helpless and despondent about her work situation. I also accept that, because of her high workload and her fear of coming into contact with the manager, she no longer attended team meetings or social functions. The September conversation with the manager clearly had a significant adverse impact on the worker. The worker has alleged, and I accept, that after this incident the manager gave her additional work. As a result, she felt further stress.

77.The manager also referred to a matter relating to a sex offender who absconded in December 2007. He conceded that the incident was unusual and “may have been stressful” for the worker, but the matter had not “significantly” increased her workload. The worker’s evidence, which I accept, was that she had to give up several days of leave to do the extra work that arose from this matter and that she worked overtime on Sunday 23 December 2007. This evidence suggests that the manager’s evidence did not paint an entirely accurate picture of the extra pressure the worker felt as a result of this additional matter. I accept that she felt “highly stressed and exhausted” at this time.

78.The manager’s evidence corroborated the worker’s evidence that the events complained of by her as having caused her psychological injury were real events that happened at work over work issues. The lay evidence provided a sound basis for the acceptance of the worker’s medical evidence that she received a psychological injury in the course of or arising out of her employment and that her employment was a substantial contributing factor to that injury.

79.That the manager had a different perception of the telephone conversation on 26 September 2007 does not defeat the worker’s claim. He conceded that he was very dissatisfied with the worker and that he used a “stern” tone and called the worker’s conduct “unprofessional”. He later apologised for having used a stern tone. The worker’s perception was that the manager’s conduct amounted to bullying and harassment. Even if the worker’s perception had been erroneous or irrational (and I do not believe it was), it was based on real events (not external events) over important work issues. I accept that the worker was distressed by the manager’s conduct and that it played a significant part in causing her injury.

80.The submission that there was no objective evidence to support the worker’s allegations has ignored the worker’s clear evidence (which I accept), which was partly corroborated by the evidence from the manager and by the histories recorded by her treating doctors. I accept the worker’s evidence that she perceived she had been bullied or harassed at work.

81.The worker summarised how she felt on 5 February 2008 at [49] of her statement of 21 April 2008. She said:

“I felt overwhelmed by a culmination of circumstances – my mistreatment by CSO management over many years – but in particular the enormous amounts of stress over the prior six months I had been placed under due to long periods of excessive workloads while dealing with a chronic foot injury; bullying, victimisation and harassment by management, in particular by [the manager]; the lack of support and recognition for my work from management; and Melanie’s suicide.”

82.The submission by Ms Smuts that the worker’s allegations were “wholly denied” by the worker’s managers was inaccurate. The above analysis has demonstrated that the manager has provided considerable corroboration for the worker’s complaints, both as to her workload and as to the circumstances of the telephone call in September 2007.

83.I accept that the manager was aware that the worker had a high workload and that she worked back. This was confirmed by emails dated 13 August 2007 between the worker and the manager where he requested her to attend to file closures. Notwithstanding that the worker said she would be working back on her matters, the manager persisted with further emails expressing concern that as many matters as possible be closed. I accept that his emails upset the worker.

84.I accept the worker’s evidence that on 2 November 2007 she complained to the practice manager about the manager and that the practice manager declined to direct the manager to reduce her workload. I also accept that, after the worker spoke with the practice manager, the manager allocated more work to her. The worker felt that that was intimidation and retaliation by the manager. It was not until after the worker sent the manager an email in November or December 2007 reminding him that she was the chairperson of the Occupational Health and Safety Committee, and that she believed his treatment of her would be regarded as harassment, that the manager finally agreed to reduce her workload. The worker felt her situation to be serious enough that she made an informal complaint to the director of human resources on 11 December 2007.

85.I accept the worker’s evidence that she received psychological counselling on several occasions for work-related stress from the appellant employer’s Employee Assistance Program between December 2007 and 13 June 2008.

86.It follows that I accept that the worker perceived she had been treated unfairly at work and that she had an excessive workload. That her workload was directed by the “exigencies of court timetables and deadlines” was not to the point. That fact merely highlighted that the worker’s workload was demanding and stressful. The medical evidence confirms that it was demanding to the point that it caused her injury.

87.The Arbitrator did not have to explain how the worker’s pursuit of promotions to a higher-grade position was consistent with her allegation that she had an excessive workload in her lower grade position. The Arbitrator had to determine whether the circumstances of the worker’s employment were a substantial contributing factor to her injury. He found that they were. For the reasons he gave, and the additional reasons in this decision, I fully agree with that conclusion.

Section 11A

88.Ms Smuts submitted that:

(a)the “promotion issue was the predominant cause of the worker’s psychological injury”;

(b)Ms Clarke had a telephone conversation with one of the worker’s treating general practitioners, Dr Zhang, in which Dr Zhang allegedly identified the “trigger” for the worker stopping work had been her unsuccessful application for promotion and that she felt she had been unrecognised at work;

(c)the Arbitrator incorrectly focused on the communication in February 2008 as being the extent of the appellant employer’s argument with respect to section 11A;

(d)the worker suffered distress at being unsuccessful in eight separate attempts to obtain promotion, and

(e)had the Arbitrator taken into account “all relevant factors regarding promotion” including the progressive history of a repeated lack of success in obtaining promotion, the worker’s psychological injury could be said to have been predominantly caused by the appellant employer’s reasonable action taken with respect to successive promotion attempts over the course of the preceding three years and culminating in the communication in February 2008 of a further failure.

89.The above submissions have failed to acknowledge that the appellant employer carries the onus of proof under section 11A. It called no evidence that the worker’s psychological injury had been wholly or predominantly caused by reasonable action taken or proposed to be taken with respect to promotion or performance appraisal.

90.The appellant employer has placed great weight on the conversation Ms Clarke had with Dr Zhang. As the Commission is not bound by the rules of evidence, the content of the conversation is admissible. However, I seriously question the propriety of a psychologist, effectively acting as a private investigator retained by the insurer, contacting and speaking to a treating doctor without the doctor having the opportunity to check the content of the subsequent report prepared by that psychologist. It is not known what questions Ms Clarke put to Dr Zhang or if she accurately recorded the doctor’s responses. If an investigator intends to approach a treating doctor, I would have thought that, at the least, the approach should be in writing so that the questions and the doctor’s responses are recorded.

91.Accepting that Ms Clarke accurately recorded her conversation with Dr Zhang, I do not accept that it assists the appellant employer on the section 11A issue. The failure to obtain promotion may well have been the “trigger” for the worker stopping work on 5 February 2008, but that is not the test in section 11A. The section requires the employer to establish that the psychological injury was wholly or predominantly caused by reasonable action with respect to, in this case, promotion. At its highest, Dr Zhang’s evidence did no more than suggest that the failure to obtain promotion was a factor in the worker ceasing work on that day. As Dr Au’s evidence has confirmed, the worker’s psychological condition was well established by that time.

92.The evidence from Dr Ross comfortably establishes that the worker’s psychological injury (a Major Depressive Disorder) resulted from several stressors. Those stressors included a high workload, exposure to confronting situations through her work with sexual offenders, chronic pain secondary to an undisputed work-related injury, and the death of a friend by suicide. Though the Arbitrator found (and it has not been challenged on appeal) that the last event was not work-related, that event was only one episode and does not detract from the Arbitrator’s ultimate conclusion that employment was a substantial contributing factor to the injury.

93.As noted earlier in this decision, Ms Clarke did not deal with the section 11A issue because she considered that the worker had not received a psychological injury, because she had no psychological condition. The Arbitrator rightly rejected that conclusion and I agree with his reasons for doing so. Ms Clarke did not offer an alternative opinion that, in the event that she was wrong on the issue of injury, the injury had resulted from reasonable action taken with respect to promotion.

94.That Ms Clarke did not consider the terms of section 11A is confirmed at page 20 of Part 2 of her report where she concluded that the “contributing factors” to the “injury” were “not listed as there is no diagnosis of a psychological condition”. Under “claim summary” on page one of her report, Ms Clarke said:

“A consideration of the terms ‘substantial contributing factor’ to ‘injury’ is not applicable as there is no diagnosis of a psychological condition.

Precipitating factor

It appears that the precipitating factor to [the worker] ceasing work was that she was informed that she had been unsuccessful in an application for a promotion.” (emphasis added)

95.Even if it were accepted that the above statement was directed to the terms of section 11A (and it clearly was not) it falls well short of establishing that the whole or predominant cause of the worker’s psychological injury was reasonable action taken by the employer with respect to promotion. The Commission must determine if the worker received a psychological injury. That she was upset that a number of applications for promotion had been unsuccessful may well have been a factor that contributed to her injury. However, given the full history of the matter, the lost promotions were not the whole or predominant cause of her injury.

96.I reject the submission that, had the Arbitrator taken into account the progressive history of a repeated lack of success in obtaining promotion, the psychological injury could be said to have been predominantly caused by the appellant employer’s reasonable action with respect to successive promotion attempts over three years. This submission ignores the fact that there is no medical evidence to that effect. Whilst I accept that the worker was upset and frustrated at having failed to obtain promotion, and that that was a factor in the development of her psychological injury, there is no evidence that that failure, no matter how many times it occurred, was the whole or predominant cause of her injury. The worker was clearly suffering from the effects of her workload and the clash with her manager well before she ceased work on 5 February 2008.

97.Ms Smuts’s submissions have failed to address the evidence or the terms of the legislation. The Arbitrator correctly rejected the appellant employer’s submissions with respect to the section 11A defence and I agree with his conclusions.

CONCLUSION

98.Having conducted a review on the merits, I am comfortably satisfied that the Arbitrator reached the true and correct decision. The submissions made by Ms Smuts on behalf of the appellant employer in this matter were misguided and without any legal or factual foundation. This appeal should never have been filed and was completely without merit.

99.Practitioners are reminded that the provision of legal services by a legal practice in an appeal without reasonable prospects of success is capable of amounting to unsatisfactory professional conduct or professional misconduct by a legal practitioner (section 345 of the Legal Profession Act 2004; Beale v Walgett District Hospital and anor [2009] NSWWCCPD 60).

DECISION

100.For the reasons given by the Arbitrator, and for the additional reasons in this decision, the Arbitrator’s determination of 18 March 2010 is confirmed.

COSTS

101.The appellant employer is ordered to pay the respondent worker’s costs of the appeal, assessed at $2,200.00 plus GST.

Bill Roche
Acting President

21 July 2010

I, MARGOT UNDERCLIFFE, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, ACTING PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE