Backo v Adairs Retail Group Pty Ltd - [2013] NSWWCCPD 53

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Backo v Adairs Retail Group Pty Ltd [2013] NSWWCCPD 53
APPELLANT:	Sofija Backo
RESPONDENT:	Adairs Retail Group Pty Ltd
INSURER:	Allianz Australia Workers Compensation (NSW) Ltd
FILE NUMBER:	A1-11628/11
ARBITRATOR:	Ms F Robinson
DATE OF ARBITRATOR’S DECISION:	18 June 2013
DATE OF APPEAL DECISION:	8 October 2013
SUBJECT MATTER OF DECISION:	Psychological injury; reasonable conduct with respect to discipline; s 11A Workers Compensation Act 1987; factual findings; credit findings; assessment of conflicting evidence; non-compliance with Practice Direction No 6
PRESIDENTIAL MEMBER:	Deputy President Bill Roche
HEARING:	On the papers
REPRESENTATION:	Appellant:	Shine Lawyers Ltd
Respondent:	Sparke Helmore Lawyers
ORDERS MADE ON APPEAL:	1. Subject to amending the respondent employer’s name to Adairs Retail Group Pty Ltd, the Arbitrator’s determination of 18 June 2013 is confirmed. 2. Each party is to pay her or its own costs of the appeal.

INTRODUCTION

This appeal concerns a claim for compensation for a psychological condition said to have been caused by “bullying and harassment” of the applicant worker by the employer’s management. The issue before the Arbitrator was whether the claimant’s psychological condition was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the respondent employer with respect to discipline (s 11A Workers Compensation Act 1987).

BACKGROUND IN BRIEF

The claimant, Sofija Backo (nee Djokic), started worked for the respondent employer, Adairs Retail Group Pty Ltd (Adairs), as an area manager on 27 April 2009. Her duties required her to oversee the management of several of Adairs’ retail stores.
Between October 2009 and January 2010, issues arose with Ms Backo not meeting deadlines and not doing the basic role of an area manager. Due to a lack of improvement, those issues carried forward to March 2010. Additional issues arose in 2010, namely, that Ms Backo had not cleared non-commercial value product and claims from stores in January 2010. Further, a member of staff had made a complaint about Ms Backo’s management style, which was causing that person anxiety.
In November 2009, Ms Backo was given verbal reminders that it was important to meet deadlines. No formal written warning was given and Ms Backo was given the opportunity to improve. As Ms Backo had taken annual leave in October 2009, when she married, and as she was unwell on her return to work, because of her pregnancy, no formal warning was given, but she was told that “inconsistencies in performance” were issues that required improvement.
Ms Backo suffered a miscarriage on 19 January 2010 and underwent a curette. She returned to work on 27 January 2010, but within hours started to haemorrhage and was admitted to hospital for a further curette. Though she returned to work on 3 February 2010, she was still suffering major pain. She said that “[o]nly after immense pain and persistence was [she] allowed to abandon the stocktake” being undertaken at that time. She said that during February and March 2010, she was still in “very much pain physically, still recovering from the two surgeries” so there were days when she could not come to work.
During Ms Backo’s absence due to the miscarriage, Rebecca Peterson, Adairs’ general manager, operations human resources, and Megan Comber, Ms Backo’s regional manager, contacted her by phone and offered their sympathy. Ms Comber said “[t]ake your time and call me when you are ready to come back”. She added that, upon Ms Backo’s return to work, she was offered “emotional support and compassion”.
On 16 March 2010, Ms Peterson and Ms Comber visited the store where Ms Backo was working. Ms Peterson was concerned about comments made by the store manager about Ms Backo’s leadership style and she asked Ms Comber, to find out more about Ms Backo’s activities. Ms Comber was told to implement a system for monitoring Ms Backo’s activities “to ensure she was performing her role and was in attendance”.
In addition, stores were removed from Ms Backo’s responsibilities “as it appeared [to Ms Peterson] that [Ms Backo] was not coping”. Ms Backo had not completed online training on time and Ms Peterson thought this suggested “a lack of commitment” by her and reflected poorly on her “leadership attitude and commitment to the business”. Ms Backo was placed on a performance management program. Ms Comber reassured Ms Backo that she was “valued” and that the change was a temporary opportunity to improve performance with a smaller number of stores. She asked Ms Backo if she required any assistance with “learning gaps”.
On 24 March 2010, Ms Backo injured her back moving furniture at work. Contrary to Adairs’ policy, which requires that injuries be reported within 24-hours, a policy that Ms Backo was aware of, she did not report that injury until two days later.
On 12 April 2010, Ms Comber gave Ms Backo a written “first and final” warning due to “breach of company policy” for not reporting her back injury within 24 hours.
In a lay-by audit on 31 May 2010, Ms Backo became aware of outstanding lay-bys dating back to December 2009 that purchasers had not responded to and, as a result, the items concerned had been returned to stock. As incentive payments had been signed off without first doing the monthly lay-by audit, the potential existed for inflated incentive payments to be made to the store manager. She told Ms Comber of the problem.
On 3 June 2010, Ms Backo had lunch with Ms Peterson and Ms Comber. She told them that the incentives had been signed-off by another employee (Joanna Weaby) and not by her. She said that Ms Peterson replied “yes, but you are the area manager, do you realise this is fraud, you have committed fraud by not checking the lay-bys”.
Ms Peterson denied having accused Ms Backo of fraud or suggesting that fraud occurred. Her evidence was that she told Ms Backo it was a breach of company policy to sign off on incentives without first doing the monthly lay-by audit. She added that, due to the seriousness of the matter, and the fact that they were not in an appropriate venue to discuss it, she “cut off the discussion” because she had to do “further investigation into it”. Ms Comber corroborated this evidence.
While it appears to be accepted that Ms Backo did not sign off the employee incentive payments (described by Ms Comber as incentive spreadsheets) for January to March 2010, the information used by the manager who did sign off on those documents had been provided by Ms Backo. Ms Comber said that this “appeared to be another incident of [Ms Backo] deflecting responsibility for work she had failed to do”. Furthermore, according to Ms Comber, Ms Backo had signed off on the incentive spreadsheets since April 2010.
During the subsequent investigation, it was found that there was no evidence that Ms Backo had been conducting quarterly safety inspections, also referred to as OHS checks.
On Thursday, 10 June 2010, Ms Comber conducted a performance counselling session with Ms Backo. Ms Backo declined the offer to have a witness present at that session. Ms Comber issued Ms Backo with two warnings. The first was for failing to conduct OHS checks in any of her assigned stores between August 2009 and May 2010. The second, described as a “first and final written warning”, was for breach of company policy with regard to signing off on incentive payment spreadsheets for store managers “without checking if monthly compliance to lay-bys had been adhered to”.
In response to the first warning, Ms Backo did not disagree that she had not conducted the relevant checks. In response to the second warning, Ms Backo said that she had not wilfully or deliberately breached company policy but made no excuse for her behaviour.
As Ms Backo had not been advantaged by the breach of policy with regard to the incentive spreadsheets, it was determined that a written warning was sufficient rather than termination of employment. Ms Comber described the issues associated with the written warnings as examples of Ms Backo’s continued failure to meet deadlines or attend to administrative duties requested of her. Ms Comber added that, during the performance counselling session, Ms Backo did not appear to be stressed or upset. At the end of the session, they continued to talk normally.
Ms Backo said that she did not eat or sleep after the meeting of 10 June 2010 and was so sick that she vomited on Friday “from anxiety”. She did not work on Friday, 11 June 2010 because she took a (previously arranged) rostered day off.
On Saturday, 12 June 2010, Ms Backo rang Ms Comber to say that she was unwell and was unable to go to work. When asked if it was the flu, she said yes.
On 15 June 2010, Ms Backo saw her general practitioner, Dr Soni, who certified her unfit from 12 June 2010. Dr Soni’s notes made no mention of Ms Backo having been accused of fraud.
On 1 July 2010, Ms Backo completed a “worker’s injury claim form” in which she described her injury as “psychological – stress & anxiety”. Under “[w]hat happened and how were you injured”, she wrote:
“Accused of comitting [sic] fraud by General Manager for incentives completed and submitted by another Area Manager when I was sick.”
Adairs’ insurer, Allianz Australia Workers Compensation (NSW) Ltd (Allianz), denied liability for the claim in a s 74 notice dated 16 August 2010 on the ground that, among other reasons, “[i]n response to performance issues, Adairs Retail Group acted reasonably in providing critical feedback as well as holding monthly coaching sessions in an attempt to rectify the issue”.
After a two day hearing, during which Ms Backo, Ms Peterson and Ms Comber gave oral evidence and were cross-examined, the Arbitrator found that Adairs had made out its defence under s 11A and made an award in its favour.
The Commission issued a Certificate of Determination on 18 June 2013 (which wrongly named Adairs as Adairs Retail Group) in the following terms:
“The Commission determines:
1.       Award for the respondent.
2.       No order as to costs.
3.       Due to the complicated nature of the matter, with a large amount of evidence, two hearings, cross examination of three witnesses and extensive submissions, there is to be an uplift for the maximum allowable 30 per cent.”
Ms Backo has appealed the Arbitrator’s determination.

ON THE PAPERS

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.”
Having regard to Practice Directions Nos 1 and 6; the documents that are before me, and the submissions by the 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.

ISSUES IN DISPUTE

The appeal has been so badly drafted that, to avoid any misunderstanding as to the issues sought to be argued, I will set out the “grounds of appeal” exactly as they appear in the document headed “Expanded Submissions Per Direction Dated 16 July 2013”, dated and filed on 7 August 2013:
“1. The Arbitrator erred in finding that the actions of the Respondent were reasonable in the context of the issuing of the two ‘first and final warnings’ for the conduct set out in paragraphs 5 and 7.
2.    The Arbitrator erred in rejecting that [sic] evidence of Ms Wild the treating psychologist on the basis of a ‘Timeline’ of Events and Complaints about the Applicant (see 113–115).
3.    The Arbitrator should have found on the evidence that a false or unfounded allegation of misconduct was the cause of the Applicant’s psychological injury.
4.    The credit of the Applicant was not a factor.” (punctuation as per original)
I propose to deal with these “grounds” under the following headings: “reasonable conduct”, “Ms Wild’s evidence”, “false or unfounded allegations of misconduct”, and “credit”. Unless otherwise stated, all references to the transcript are to the transcript of 25 May 2012 when all oral evidence was heard.

REASONABLE CONDUCT

Submissions

Though counsel appeared for Ms Backo at the arbitration, her solicitor, Mr Sutton, has prepared the grounds of appeal and submissions in support.
Mr Sutton submitted that the warning for not having reported the back injury within 24-hours was unreasonable because the breach did not warrant a “final warning”, as no other employee was compromised and the insurer could not be prejudiced by a one-day delay. He said that the “actions in this regard was [sic] heavy handed and unwarranted” and that the Arbitrator’s finding “that Ms Comber acted reasonably in issuing this ‘Final Warning’ when she did is clearly not reasonable”.
Mr Sutton argued that the warning “for the paying of the ‘Lay by [sic] incentives to staff’” was unreasonable in the following respects:
(a) regardless of whether the word “fraudulent” was used, Ms Backo was told that it was too serious to be dealt with when first reported and all talk of the matter was “suspended” until “evidence was gathered” (T80.25). At this stage, it must have been obvious that the only thing to be investigated was why it took so long “for the old lay by’s [sic] to be discovered and if they were still genuine or if there had even been a loss”. This “cloaked the whole incident in [an] aura of some criminal misbehaviour which [Ms Backo] reasonably thought was aimed at her when she was not the recipient of any ‘bonus’”. The fact is Ms Comber considered the behaviour of the employee who claimed the bonus to be fraudulent (T35.1-5), and this adds weight to Ms Backo’s assertion that she thought the word fraud was used, “even if it was not clearly claiming money that is not rightfully yours is [sic] or could be fraud”, and
(b) the handing over of the two “first and final” warnings at the same meeting was not warranted. The explanation of Ms Comber at [107] of the decision was disingenuous to say the least. She was cross-examined on this point and admitted (at T44.30–45.10) that it was company policy not to deal with two complaints on one “Notice”. By doing two “notices” on the same day, Ms Comber and Ms Peterson paid lip service to company policy and deliberately put Ms Backo under pressure and acted unreasonably and against company policy. Ms Comber and Ms Peterson had plenty of time and even on 10 June 2010 could have dealt with these two issues on separate days. Clearly this was designed to intimidate Ms Backo. To accept Ms Comber and Ms Peterson on this point the Arbitrator was in error in finding this behaviour was reasonable.
Ms Backo was off work due to her pregnancy in January 2010 and did not sign off on the incentives which were paid to staff based on the lay-bys dating back to December 2009. She was therefore accused of false and unfounded allegations of misconduct when she had no control over the matter.

Discussion and findings

The Arbitrator dealt with the question of whether Adairs’ conduct was reasonable by reference to its “entire conduct” ([109]), as required by Department of Education and Training v Sinclair [2005] NSWCA 465; 4 DDCR 206.
She correctly acknowledged (at [91]) that the question of whether an employer’s conduct was reasonable is one of fact where the rights of the employee must be weighed against the objectives of the employer (Irwin v Director General of Education (unreported, Workers Compensation Court of NSW, Geraghty CCJ, 18 June 1998, No 14068 of 1997).
She did not deal with the first warning in any detail, but said (at [116]), after having reviewed the other issues, that she found it was reasonable. Mr Sutton’s submissions really amount to an attempt to re-argue the reasonableness issue on its merits, rather than attempting to identify any error by the Arbitrator. Even if I was minded to reach a different conclusion on that issue, and I am not, it would not be open to me to do so. To succeed, Ms Backo must establish that the Arbitrator’s decision is affect by an error of fact, law or discretion (s 352 of the 1998 Act; Northern NSW Local Health Network v Heggie [2013] NSWCA 255 at [72]).
At the arbitration, Ms Backo’s counsel, Mr Harrington, made only one reference to the first warning, and that was in the context of a submission that the whole of the conduct of Ms Peterson and Ms Comber amounted to “bullying by professionals” (T25.15 – 27 July 2012). The implication of that submission was that, in the context of a back injury, “when there was no ongoing sequelae” (T25.11 – 27 July 2012), the warning was unreasonable.
However, the submission was not expressly made in that way. Mr Harrington argued that the evidence established “bullying micromanagement” (T18.27 – 27 July 2012) with a particular aim to causing stress (to Ms Backo) and to “put Ms Backo out of the workplace” (T18.29 – 27 July 2012). The Arbitrator did not accept that submission ([106]). Her finding on that issue was open to her.
The submission that no other employee was compromised by the delay in reporting the back injury, and the insurer was not prejudiced, was not a submission made at the arbitration. In any event, it is irrelevant to the issue of whether Adairs’ conduct was reasonable. The warning was issued because of a breach of the employer’s policy. Ms Backo was aware of the policy and agreed that she was in breach of it. I do not accept that the Arbitrator erred on this point.
As to the two warnings issued on 10 June 2010, Mr Sutton’s first point goes to the effect of the conversation Ms Peterson had with Ms Backo on 3 June 2010 and whether, during that conversation, Ms Peterson accused Ms Backo of fraud. Mr Sutton’s submissions have not addressed any alleged error by the Arbitrator, and have not referred to her reasons, but have merely attempted to reargue the issue of the effect of the conversation on 3 June 2010.
On the allegation that Ms Peterson accused Ms Backo of fraud, the Arbitrator accepted the evidence from Ms Peterson, corroborated by Ms Comber, that that word was not used and Ms Backo had not been accused of dishonesty. That finding was open on the evidence and disclosed no error.
The warning about the lay-bys was that Ms Backo was in breach of company policy by submitting incentive spreadsheets without checking that lay-bys had been completed. That breach meant that sales figures were inflated with the potential for incorrect incentive payments to the store manager. That was, potentially, a serious matter and one over which Adairs was entitled to take action.
Because Ms Backo had not been advantaged by the breach of policy, the action taken was to issue a warning. Viewing the history of the matter as a whole, where two supervisors were concerned about Ms Backo’s performance, had instituted procedures to help her improve, had endeavoured to support her, and had refrained (for reasons of fairness) from issuing formal warnings in the past, the Arbitrator concluded (at [109]) that the issuing of the warning on this issue was reasonable. That finding was open and disclosed no error.
The submission that the only thing to be investigated was why it took so long “for the lay-by’s [sic] to be discovered and if they were still genuine or if there had even been a loss” was not one that was made at the arbitration. The nature of the investigation, and whether it was reasonable, was not explored at the arbitration, either in cross-examination or in submissions. It is not dealt with in the evidence. The submission on appeal was not supported by any reference to the evidence and is unsustainable. Ms Peterson considered the lay-by issue to be a serious one and it was reasonable that she investigate it before taking any action. It was also reasonable that such a sensitive issue not be further discussed over lunch, which may be inferred was at a café or restaurant.

The submission that this “cloaked the whole incident in [an] aura of some criminal misbehaviour which [Ms Backo] reasonably thought was aimed at her when she was not the recipient of any ‘bonus’” missed the point. It was never argued at the arbitration that the investigation was not reasonable, or that it “cloaked the whole incident in [an] aura of some criminal misbehaviour”. It was argued that the issuing of the warnings was not reasonable and was heavy handed. The submission on appeal has not attempted to identify any error by the Arbitrator and has sought to raise an issue never argued at the arbitration. It is rejected.
The submission that Ms Comber considered the behaviour of the employee who claimed the bonus to be fraudulent was simply wrong. The passage relied on in support of this submission is at T35.1, where Ms Comber said:
“She was fraudulent in claiming stock against the book stock using a look up [sic] to see how much stock she had on hand.”
This answer did not relate to Ms Backo’s conduct, or to the lay-by issue. It was in response to questions about why the employment of another employee (the store manager at Macarthur) had been terminated. Mr Sutton’s submission was made without reading the transcript and is rejected.
For reasons given, the Arbitrator rejected Ms Backo’s suggestion that Ms Peterson had used the word “fraud” in the conversation on 3 June 2010. That conclusion was open to her and disclosed no error.
The submission that the giving of two warnings on the one day was “not warranted” was based (it seems) on an assertion that the following evidence from Ms Comber, quoted by the Arbitrator at [107], was “disingenuous to say the least”:
“I had considered to do warnings prior to that but due to sickness or absentees from the business and general feeling of unwellness, I didn’t think it was fair to be performance managing before then.” (T44.19)
Mr Sutton did not explain exactly what it was about Ms Comber’s evidence that was disingenuous. Her evidence was perfectly consistent with the history of the matter and with her later statement that the aim was to keep people on board (see [60] below). There had been issues with Ms Backo’s performance in 2009, but no formal warning issued until half way through 2010. Ms Comber’s explanation for not issuing a formal warning before 2010 was perfectly reasonable. Moreover, the submission that this answer was disingenuous was not a submission made at the arbitration.
After explaining that the lay-by issue was a serious matter and that, in performance management procedures, the warning can be either verbal or written, it was “deemed serious enough for a first and final written warning” (T44.28). Ms Comber was then asked, starting at T44.31:
“Mr Harrington: Three in a row, they were all deemed to be, sorry two out of three, two out of three in quick succession?
Ms Comber: One was done separately. The two that were done on the same day were two separate issues. It’s not fair to give an employee according to company policy a written warning with multiple issues in there so we did two separate issues together, in the same day.”
Ms Comber’s answer was correct. The two warnings on 10 June 2010 dealt with two separate and distinct issues. One dealt with the lay-by issue, which I have already discussed. The other dealt with Ms Backo’s failure to conduct OHS checks in any of her assigned stores between August 2009 and May 2010. Ms Comber gave evidence that the failure to do the OHS checks, as required, had been discovered in the monthly area manager meeting in April 2010 and that Ms Backo had been asked to complete the checks by May 2010, but had failed to do so.
Ms Comber said that the failure to complete the checks was “linked to not meeting company deadlines”, as previously noted by her in her case notes. Ms Comber told Ms Backo that enough “gentle, polite reminders had been issued in the past” requesting that she adhere to deadlines and, as a leader in the business, the failure to conduct the checks was a sign “she was still not coping in the role (even with a smaller portfolio of stores)”. Ms Backo responded that she had no excuse and accepted the warning. This evidence does not support the submission that Ms Comber’s evidence (reproduced at [50] above) was “disingenuous”.
In these circumstances, it was open to the Arbitrator to find that the warning due to the failure to conduct OHS checks was reasonable and her decision discloses no error.
The question remains if it was reasonable to issue both warnings on the same day. The submission that Ms Comber’s evidence was disingenuous seems also to be directed to this issue. The submission was unhelpful and did not advance Ms Backo’s case. Ms Comber’s evidence that it was company policy not to issue two warnings in one notice was unchallenged.
I do not accept that the issuing of two warnings on the one day paid “lip service” to the company policy or was contrary to the policy. It complied with it. Leaving the policy to one side, as previously noted, the warnings dealt with separate issues and that reason alone justified them being in separate documents.
On the issue of whether the issuing of two warnings on the one day was done to deliberately put Ms Backo under pressure, it is necessary to consider the evidence at the arbitration. Mr Harrington put to Ms Peterson that the issuing of the warnings to Ms Backo was “designed to get rid of Ms Backo” (T74.18) and “to put stress on her” (T74.23). Ms Peterson disagreed.
It was then put that the warnings were given in that manner because Ms Peterson had formed the view in March 2012 that she did not trust Ms Backo. Ms Peterson disagreed, stating that other area managers had been “written up for incentive breaches” (T74.32).
Mr Harrington asked Ms Comber if, before the warnings were issued, she and Ms Peterson had discussed ways to get rid of Ms Backo. Ms Comber responded, at T43.28:
“Ms Comber: No. In fact, if anything, our aim is to ensure that we keep people on board and that it improves. It was determined that it was not well formed or deliberate but it was still a breach and therefore deemed that it should only be a first and final written warning to simply not to [sic, do] it again. It’s serious because it has financial implications for the company.”
Referring to the first sentence in the above quote, the Arbitrator (at [106]) did not accept that the conduct of Ms Peterson and Ms Comber amounted to “bullying micromanagement”, as Mr Harrington had submitted. That finding was open on the evidence and disclosed no error.
Mr Sutton’s last submission under this heading – that Ms Backo was away, had not signed off on the incentives, and was therefore accused of false and unfounded allegations of misconduct when she had no control over the matter – goes to the third ground of appeal and is dealt with below.
In summary, Mr Sutton’s arguments are unpersuasive. Rather than attempting to identify error by the Arbitrator, Mr Sutton has effectively attempted to conduct the appeal as a rehearing. For the reasons given, I reject his submissions.

MS WILD’S EVIDENCE

Submissions

Mr Sutton submitted:
“The Arbitrator erred in rejecting that [sic] evidence of Ms Wild the treating psychologist on the basis of a ‘Timeline’ of Events and Complaints about [Ms Backo] (see 113–115) as this ignores the fact that various psychological stressors are cumulative in there [sic] effect and the onset of a psychological condition will not necessarily follow a line in the way a physical injury may.” (punctuation as per original)

Discussion and findings

To understand this submission it is necessary to look at the submissions by Adairs’ counsel, Mr Flett, at the arbitration and the Arbitrator’s reasons. He submitted that the timeline was important because there was no doubt that Ms Backo’s conduct became an issue from March 2010 onwards. He added that there had been a complaint earlier (about her performance), but that did not seem to be the issue that brought the parties to the Commission.
Dealing with the s 11A defence, Mr Flett said that the “the timeline is that in March 2010” (T4.14 – 27 July 2012), due to aspects of Ms Backo’s management style, as set out in Ms Comber’s evidence, Ms Backo was put on a performance program where she had to communicate in the morning and afternoon her activities so management could best determine how her time could be used.
He then referred to the back injury on 24 March 2010, which he properly conceded was not the subject of “any real aspect” (T4.25 – 27 July 2012), other than that Ms Backo was aware that there was a policy of reporting work injuries within 24-hours and that she had not reported her injury until 27 March, which resulted in the warning on 12 April 2010.
Mr Flett then dealt with the meeting on 3 June 2010 and the warnings issued on 10 June 2010. He said, “perhaps that’s where we start from the timeline because [Ms Backo] says that she was given two warnings on 10 June” (T8.10 – 27 July 2012).
The Arbitrator noted (at [95]) Mr Flett’s submission that the timeline was important. Dealing with Mr Harrington’s submissions in response, the Arbitrator said:
“113.[Ms Backo] submits that [her] psychiatric injury did not solely relate to disciplinary action. This relates to the ‘wholly or predominately’ requirement of section 11A. [Ms Backo] identifies a number of other factors: the sequelae of [her] miscarriage from a work point of view; incompetency at the Macarthur store; a lack of support from senior management, and inadequate explanation for stores being removed from [her].
114.In addition to those above, Ms Wild also identifies a number of other factors that contributed to [Ms Backo’s] psychiatric condition, including KPIs being attributed to another manager, being given a warning for failing to report a back injury, and [Ms Backo’s] belief that there was a culture of prejudice towards pregnant women at the respondent.
115.I am not satisfied that any of the above actions caused [Ms Backo’s] psychiatric condition. The timeline of events lends no credence to this conclusion, nor does [Ms Backo’s] account of the cause of her illness to Drs Lee or Samuell, who both focus on the allegation of fraud. Dr Wild’s opinion is also flawed in that she opines that the other factors she identifies as contributing to [Ms Backo’s] psychiatric condition ‘appear to have occurred prior to any reasonable actions in respect of promotion, transfer, performance appraisal, discipline, retrenchment or dismissal’.
116.That is not the case. The respondent began action in respect of discipline in March 2010, but includes a history of month[ly] training meetings in 2009, which I classify as ‘discipline’ pursuant to the primary meaning in Kushwaha. The warning given to [Ms Backo] for failing to report her back injury was in respect of discipline, and as I have determined above, was reasonable. I do not accept [Ms Backo’s] evidence that there was a culture of prejudice towards pregnant women at [Adairs], and in any event, the medical evidence does not support this as a cause of [her] psychiatric disorder.
117.[Adairs] is required to prove that [Ms Backo’s] psychological disorder was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to discipline. I am satisfied that they have done so.” (emphasis included in original)
The Arbitrator’s conclusion that the timeline of events did not support the conclusion that the other matters listed (at [113] and [114] of the decision) had caused Ms Backo’s psychological condition was consistent with the evidence and was open to her. It was a clear reference to the fact that Ms Backo demonstrated no signs of emotional difficulties until after she received the warnings on 10 June 2010. That finding was open on the evidence.
However, that was not the only, or even the main, reason the Arbitrator gave for rejecting Mr Harrington’s submissions on causation. She added, in effect, that the evidence from Drs Lee and Samuel, who both focused on the history that Ms Backo had been accused of fraud, did not support Ms Backo’s case. In circumstances where the Arbitrator found that Ms Backo had not been accused of fraud, or any dishonesty, her finding was open to her and disclosed no error.
In addition, the Arbitrator said that Ms Wild’s opinion was flawed because she wrongly said that the “other factors” that contributed to the injury occurred prior to any reasonable action with respect to promotion, transfer, performance appraisal, discipline, retrenchment or dismissal. The Arbitrator correctly observed that issues with regard to “discipline” commenced with monthly training meetings in 2009 and this finding has not been challenged.
Last, the Arbitrator did not accept Ms Backo’s assertion that there was a culture of prejudice towards pregnant women at Adairs. She found that, in any event, the medical evidence did not support that as a cause of Ms Backo’s psychiatric disorder.
Mr Sutton did not refer to any evidence to support his submission on this “ground” of appeal, but merely made the broad assertion that the decision ignores the fact that “various psychological stressors are cumulative in there [sic] effect and the onset of a psychological condition will not necessarily follow a line in the way that a physical injury may”. Even assuming that to be correct as a general proposition, it does not establish error by the Arbitrator in her approach or conclusion on the facts of this case. In the absence of any reasoned argument on the point, this ground of appeal must fail. The Arbitrator’s conclusion was open on the evidence and disclosed no error.

FALSE OR UNFOUNDED ALLEGATIONS OF MISCONDUCT

Submissions

Mr Sutton submitted that:
“[Ms Backo] was off work due to her pregnancy in January 2010 and therefore did not sign off on the incentives which were paid to the staff members based on the lay-bys dating back to December 2009. [Ms Backo] was accused of false and unfounded allegations of misconduct when she did not sign off on the incentives.”

Discussion and findings

While it is accepted that Ms Backo did not sign off on the incentive spreadsheets for January to March 2010, she provided the information used by the manager who did sign off on those documents. The evidence on this was from Ms Comber, who was asked this question, at T43.6:
“Mr Harrington: … See what I was putting to you is that the orders were signed off by Joanna Weaby when Ms Backo was away on sick leave?
Ms Comber: Yes. Well the quarterly email that was sent, that the monthly contributions were done by [Ms Backo] and it’s the Area Manager within each store’s accountability within each month to audit the lay-bys and ensure that the data is accurate. All Joanne did was collate what the stores already had which would have been signed off on by [Ms Backo] and we had a previous email sent by [Ms Backo] to the financial administrator from her email.”
Mr Harrington also pursued this issue with Ms Peterson. Consistent with Ms Comber’s evidence, she said (at T65.27) that it was her understanding that Ms Backo provided “each month’s worth of information to” Joanne Weaby who then “submitted for the quarter”. After agreeing that Ms Backo’s name did not appear on the relevant document, the following exchange then occurred at T77.24:
“Arbitrator: Okay, agreed so where is the evidence that the applicant actually completed these?
Ms Peterson: Because you do the lay-by audit before you submit them so Joanne Weaby submitted them on the proviso that [Ms Backo] has done the lay-by audit.”
Consistent with this evidence, the warning issued said, among other things, that submitting the store manager’s spreadsheet indicated that Ms Backo had “checked the data” when in fact she had not. That was a breach of company policy that justified a warning. When Ms Comber issued the warning, Ms Backo did not dispute that she had breached the policy, but said that she had not done so “willingly or consciously”. She considered herself an honest person, something that Ms Peterson and Ms Comber had never doubted.
It follows that Mr Sutton’s submission that Ms Backo was “accused of false and unfounded allegations of misconduct”, which he made with no reference to the evidence, was incorrect and is rejected. The Arbitrator’s conclusion that the warning was reasonable was open on the evidence and disclosed no error.

CREDIT

Submissions

Mr Sutton submitted that Ms Backo’s credit was questioned in relation to the reimbursement of her phone bill and toll accounts. He said she gave evidence that she tried to claim those expenses but they were not allowed because of a time deadline for their submission to the appellant. She said she did not bring them to the arbitration because her solicitor told her not to (T14.10).
In relation to Ms Backo’s histories to the doctors about any prior psychological condition, Mr Sutton said that the earlier prescription of Zoloft was dealt with by Ms Backo at T13–20 with Ms Backo describing one episode where her general practitioner prescribed medication she never took.
Mr Sutton said that “[t]he credit of [Ms Backo] was not a factor that should have been considered especially when deciding the issue of whether the word ‘fraud’ was used in the ‘Lay-by’ conversation”.

Discussion and findings

To understand this submission it is again necessary to consider the evidence at the arbitration, and how the case unfolded.
An issue arose as to Ms Backo’s movements at work. Ms Peterson gave evidence in her statement of 21 July 2010 that Ms Backo’s information regarding her store visits was “inconsistent with information as to her whereabouts” obtained “from toll records, mobile phones and other sources of objective data”. As a result, Ms Peterson asked Ms Comber to “implement a system for monitoring [Ms Backo’s] activities” to ensure Ms Backo “was performing her role and was in attendance”.
Dealing with this issue, Mr Harrington asked the following question of Ms Backo, at T9.1:
“Rebecca [Peterson] says that in order to determine that you weren’t going out to the stores on a correct basis that she examined your toll records, mobile phone records, something else, tolls, mobile phone, what do you say about that?
Ms Backo: I say that that statement’s false based on the fact that I was using a personal mobile phone, not a work mobile phone. No phone bills were ever submitted for reimbursements. I also never submitted toll records for reimbursement.”
The Arbitrator asked Ms Backo, at T9.22:
“And you never submitted accounts or any cash dockets or whatever?
Ms Backo: I did try to in, I think it was in late March, but I was told that that period for the reimbursement had closed so I did not qualify for that so I was never, those documents never made it to Head Office and I was never reimbursed or anything.”
In cross-examination, Ms Backo repeated (at T13.26) that documents were “never provided to” Ms Peterson.
Mr Flett asked if Ms Backo had her phone records with her. Ms Backo said that she spoke to “Paul” yesterday and asked if there was anything she needed to bring. I accept that the reference to Paul was a reference to Ms Backo’s solicitor (Paul Reaves) and that she was not advised to bring any records to the arbitration.
Mr Harrington cross-examined Ms Peterson about Ms Backo’s mobile phone and toll records at T61.14:
“Mr Harrington: What did you find out from the mobile phone records, the toll records and other objective documents?
Ms Peterson: That there was not consistency in relation to when Sofija should have been at work.
Mr Harrington: So tell us about these documents. Where were they?
Ms Peterson: Well toll records are records that are kept.
Mr Harrington: And you say under oath you saw toll records?
Ms Peterson: Yep.
Mr Harrington: You say that under oath?
Ms Peterson: I do. Sofija submits them on her petty cash.
Mr Harrington: Do you have access to them?
Ms Peterson: Yeah.
Mr Harrington: Can you get them?
Ms Peterson: I can go get them now.”

The cross-examination concluded and, as Ms Peterson did not have the relevant documents with her, the case was adjourned until 27 July 2012 so they could be obtained.
In an Application to Admit Late Documents filed with the Commission on 20 June 2012, Adairs’ solicitors filed 107 pages of documents, which included “Toll Account and Usage Records” and “Expense Reimbursement Forms”, prepared by Ms Backo, and “Employee Work Phone Accounts” prepared by Adairs. These documents were admitted by consent when the arbitration resumed on 27 July 2012. For convenience, I will refer to them as “the late documents”.
Referring to the late documents, Mr Flett submitted that Ms Backo’s “quite specific” (T7.8 – 27 July 2012) evidence was that “those particular documents were not available to” Ms Peterson, adding (at T7.33 – 27 July 2012) that “the important thing about it is, all these documents are addressed to [Ms Backo]”. He then submitted, at T8.4 – 27 July 2012:
“The toll records and the phone records and they’re produced by the [appellant] so what [Ms Backo] made my learned friend put was clearly wrong. She was so loose with the truth even in these close circumstances that, I’m going to come to the question of her credit, is something which you would have little or no time for.”
The late documents demonstrate that Ms Backo’s assertion that documents were never submitted to Ms Peterson was incorrect and that Ms Peterson’s evidence was correct.
While the Arbitrator referred to Mr Flett’s submission that Ms Backo was “loose with the truth” in relation to the toll records, she did not base her decision on those records. Though she would have been entitled to rely on this matter as a ground for finding that Ms Backo was not a reliable witness, the Arbitrator made no comment about Ms Backo’s failure to bring documents to the arbitration and made no finding about Ms Backo’s credit “in relation to the reimbursement of her phone bill and toll account”. It follows that Mr Sutton’s first point on the credit issue was completely misguided and misleading. His submission was made without any reference to the evidence or the Arbitrator’s decision. It is rejected.
Dealing with Ms Backo’s histories to the doctors, which were to the effect that she had no history of psychological or psychiatric disorders, the Arbitrator noted (at [99]) Mr Flett’s submission that Ms Backo did not reveal her history of past psychiatric difficulty to Dr Lee, though the clinical notes from Dr Soni, Ms Backo’s general practitioner, revealed depressive symptoms in January 2009. I would add that Dr Soni’s entry in his notes for 11 December 2008 referred to Ms Backo having had depressive symptoms for four months. He prescribed Zoloft and, later, Ducene.
The Arbitrator noted (at [99]) Ms Backo’s evidence that she never took Zoloft, though it had been prescribed for her. She also referred (at [100]) to Ms Backo’s evidence that, in her mind, she did not have excessive anxiety or depression (in late 2008 and early 2009) like she had at Adairs in 2010.
The Arbitrator then (at [101]) noted, and accepted, Mr Harrington’s submission that caution must be used when using medical records to attack a worker’s credit. She said that Ms Backo had been afforded the opportunity to “explain herself” ([102]) in cross-examination.
With regard to Ms Backo’s allegation that Ms Peterson had accused her of fraud, the Arbitrator preferred the evidence of Ms Peterson and Ms Comber. She did not accept that, even if the word “fraud” had not been used, what Ms Peterson said could only be interpreted as (an allegation of) fraud ([103]). The Arbitrator felt that the nature of the censure Ms Backo received (a warning) did not lend weight to the suggestion that she had been accused of fraud or that fraud had been committed ([104]). This finding was open on the evidence and has not been challenged.
Returning to the medical histories, the Arbitrator said (at [105]) that Ms Backo’s history to Drs Lee and Samuel and Ms Wild about her previous psychiatric difficulties was “patchy, at best” ([105]). Noting that Mr Flett had cross-examined Ms Backo at length about the medical histories (relating to Ms Backo’s prior psychiatric difficulties), and referring to Ms Backo’s explanation (summarised at [96] above), the Arbitrator did not accept Ms Backo’s explanation. She said, at [105]:
“The symptoms were serious enough for the applicant to be prescribed Zoloft, which was then changed to Ducene. Whether or not the applicant took the medication she was prescribed is irrelevant. There was a history of diagnosed psychiatric difficulty in the past, which she did not reveal to Drs Lee or Samuell [sic] or either psychologist. The failure to disclose adversely impacts on the credit of the applicant.”
The Arbitrator’s statement that Ms Backo’s failure to disclose her prior psychological history adversely affected her credit was, in effect, a statement that she did not find Ms Backo a reliable witness (Elias v Transport Accident Commission [2013] VSCA 123 at [77(e)]). Given the way the case was conducted, the Arbitrator’s findings and approach were open on the evidence and disclosed no error. Again, Mr Sutton’s submission failed to refer to the evidence or the Arbitrator’s reasons. It is rejected.
The last submission on this ground was a general submission, unsupported by any reference to the evidence or the decision, that Ms Backo’s credit was not a factor that should have been considered, especially when deciding whether the word “fraud” was used.
In assessing whether Ms Backo had been accused of fraud, the Arbitrator was faced with two conflicting versions. In deciding which version was correct, she was entitled to consider all the relevant evidence and the parties’ submissions. Both sides submitted on Ms Backo’s credit. In particular, Mr Flett submitted that Ms Backo’s credit was something the Arbitrator would have “little or no time for” (T8.8 – 27 July 2012). In these circumstances, Mr Sutton’s submission that Ms Backo’s credit was not a factor was untenable. It was not only something the Arbitrator was entitled to take into account, having regard to the way the case was presented, it was something she was obliged to deal with.
Having considered the evidence, and having seen and heard Ms Backo give oral evidence, it was open to the Arbitrator to form a view about Ms Backo’s credit and to take that view into account in reaching her conclusion. Her view was that Ms Backo’s “failure to disclose [her previous psychological difficulties] adversely impact[ed] on the credit of [Ms Backo]”. This was a matter that went to the reliability of Ms Backo’s evidence and was a matter (though not the only matter) the Arbitrator was entitled to take into account in assessing the claim. Her finding was open and disclosed no error.
It has not been argued, nor could it have been argued, that the Arbitrator “failed to use or has palpably misused [her] advantage” (in seeing and hearing the evidence) or that she acted on evidence which was “inconsistent with facts incontrovertibly established” or “glaringly improbable” (Devries v Australian National Railways Commission [1993] HCA 78; 177 CLR 472 at 479, 480-481; Fox v Percy [2003] HCA 22; 214 CLR 118 at [25]-[27]).
It follows that this ground of appeal is rejected.

CONCLUSION

This appeal was completely without merit. Mr Sutton’s submissions made no real attempt to deal with the Arbitrator’s reasons, or to establish error. He ignored the relevant evidence and the submissions made at the arbitration and, essentially, attempted to conduct the appeal as a rehearing. Several of his submissions were completely misguided and demonstrated that he had not read the evidence. Moreover, his submissions did not comply with Practice Direction No 6, which states that submissions must deal clearly and succinctly with each ground of appeal and include relevant page references to the evidence and transcript. The professions’ repeated failure to comply with Practice Direction No 6 is deplorable and unacceptable.

DECISION

Subject to amending the respondent employer’s name to Adairs Retail Group Pty Ltd, the Arbitrator’s determination of 18 June 2013 is confirmed.

COSTS

Each party is to pay her or its own costs of the appeal.

Bill Roche
Deputy President

8 October 2013

I, KATHRYN CAMP, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE