BFX v Ashfield Baptist Homes Ltd

CERTIFICATE OF DETERMINATION OF MEMBER
Citation:	BFX v Ashfield Baptist Homes Ltd [2023] NSWPIC 302
APPLICANT:	BFX
RESPONDENT:	Ashfield Baptist Homes Ltd
Member:	Jill Toohey
DATE OF DECISION:	27 June 2023
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987; psychological injury; claim for weekly payments and lump sum compensation; applicant was accused by co-worker of inappropriate touching; internal and external investigations failed to substantiate the allegation; no dispute that the applicant had a psychological report injury; whether the injury was wholly or predominantly caused by action taken or proposed to be taken with respect to discipline; whether the respondent’s action in conducting the investigation constituted discipline; whether it was the whole or predominant cause of the injury Held – the section 11A defence fails; applicant entitled to weekly payments and medical expenses; matter to be remitted to the President for referral to a Medical Assessor for assessment of whole person impairment.
determinations made:	The Commission determines: 1. The applicant suffered a psychological injury arising out of or in the course of her employment with the respondent deemed to have occurred on 5 May 2021. 2. The injury was not wholly or predominantly caused by reasonable action with respect to discipline pursuant to s 11A of the Workers Compensation Act 1987. 3. The respondent is to pay the applicant weekly compensation pursuant to s 36 of the Workers Compensation Act 1987 for the first 13 weeks at the rate of $957.58 per week and at the rate of $806.38 thereafter pursuant to s 37 of the Workers Compensation Act 1987, with ongoing payments subject to indexation. 4. The respondent is to pay the applicant’s reasonably necessary treatment expenses pursuant to s 60 of the Workers Compensation Act 1987. 5. The claim for lump sum compensation is remitted to the President for referral to a Medical Assessor pursuant to s 321 of the Workplace Injury Management and Workers Compensation Act 1998 for assessment of the degree of whole person impairment as a result of the applicant’s psychological injury. 6. The documents to be referred to the Medical Assessor are: a. Application to Resolve a Dispute and attached documents. b. Reply and attached documents, and c. Application to Admit Late Documents lodged by the respondent on 20 April 2023 and attachments.

STATEMENT OF REASONS

BACKGROUND

BFX, the applicant in this matter, was employed as a recreational activities officer by the respondent, Ashfield Baptist Homes Ltd, when a co-worker alleged she had inappropriately touched him on the bottom.
The incident was alleged to have occurred on 30 March 2021 while BFX and the co-worker, Luke Chioatto, were on an outing with residents of the respondent’s aged care home. BFX denies the allegation.
On 5 May 2021, BFX was given a “Stand Down” letter after Mr Chioatto lodged a complaint about what he said had occurred on the outing. She was told to leave work immediately.
Following interviews with BFX and Mr Chioatto, the respondent concluded there was insufficient information to sustain the allegation. The respondent then initiated a second investigation, by an independent investigator, which came to the same conclusion.
BFX claims she sustained a psychological injury as a result of being falsely accused of sexual harassment.
By a dispute notice dated 7 June 2022, the insurer denied liability to compensate
BFX for weekly payments and medical expenses on the basis that her psychological injury was wholly or predominantly caused by reasonable action taken or proposed to be taken with respect to discipline pursuant to s 11A(1) of the Workers Compensation Act 1987 (the 1987 Act).
By a further dispute notice dated 12 October 2022, the respondent maintained the dispute and also denied liability to compensate BFX for permanent impairment.
By an Application to Resolve Dispute (ARD) lodged with the Personal Injury Commission (Commission) on 23 January 2023, BFX claims weekly compensation from
4 July 2022 to date and continuing, and lump sum compensation for 22% whole person impairment as a result of a psychological injury deemed to have occurred on 5 May 2021.
At a telephone conference on 21 February 2023, the applicant was given leave to amend the ARD to delete that part of the claim which described her injury as “aggravation, acceleration or exacerbation or deterioration of disease” deemed to have occurred on 5 May 2021.

10.There is no dispute as to injury. When the proceedings commenced, the respondent disputed BFX’ claim in relation to total or partial incapacity. That matter is no longer in dispute following a report from the respondent’s independent medical examiner, Dr Mukesh Kumar. The only issue is whether the respondent‘s defence pursuant to s 11A succeeds.
11.There is no dispute that BFX’ pre-injury average weekly earnings (PIAWE) were $1,007.98.

ISSUES FOR DETERMINATION

12.The parties agree that the issues remaining in dispute are:
(a)    whether the respondent’s action was action taken or proposed to be taken with respect to discipline;
(b)    whether BFX’ injury was wholly or predominantly caused by that action, and
(c)    whether the action was reasonable.

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION

13.Parties attended a conciliation conference and arbitration hearing on 26 April 2023.
BFX was represented by Mr Bruce McManamey of counsel, instructed by Mr Philip Ferraro. The respondent was represented by Mr John Gaitanis of counsel, instructed by
Ms Nina Israil.
14.Parties could not reach agreement. After discussions, there was insufficient time for both to make oral submissions. I therefore made directions for submissions to be made in writing.
15.I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.

EVIDENCE

Documentary evidence

16.The following documents were in evidence before the Commission and considered in making this determination:
(a)    ARD and attached documents;
(b)    Reply and attached documents, and
(c)    Application to Admit Late Documents (AALD) lodged by the respondent on
20 April 2023 and attachments.

Oral evidence

17.Neither party sought leave to adduce oral evidence or cross-examine any witness.

BFX’ evidence

18.In addition to statements provided in the course of the investigation into Mr Chioatto’s complaint, BFX provided a written statement dated 15 December 2022.[1] The following is a summary of that statement. Other statements are referred to below.
[1] ARD page 2.
19.BFX states that her injury developed “due to false accusation made by [Mr Chioatto].” She says she was aware of “some personal stressors in his life” and she speculates that he “may have been jealous” after his application for a managerial position was unsuccessful and she was performing some tasks as acting manager.
20.BFX states that she is aware that Mr Chioatto alleged that, on 30 March 2021, she touched his bottom while passing him on a bus with residents and that he alleged she made a comment afterwards along the lines of “I do not know why I did that”.
21.On 5 May 2021, she was at work when “Morag”[2] told her she had to “come quickly” because “Leigh is waiting for you”. She stopped what she was doing and followed Morag. She was not told what it was about or that she could have a support person present.
[2] Apparently a reference to Morag Miles, Lifestyle Coordinator at the respondent: Reply page 187.
22.Present at the meeting were Leigh Kildey, the respondent’s Chief Executive Officer, and Barry Crawling,[3] the clinical manager. She was told a colleague had complained that she had touched him inappropriately. She was not told who the complainant was or the specifics of the allegation, but that she had to leave immediately. (There do not appear to be any notes of this meeting.)
[3] It appears this should read Barry Cowling: Reply page 173.
23.BFX says she received a letter by email at home on 5 May 2021 confirming that she was stood down and asking her to attend a meeting on 10 May 2021. She was “extremely upset” to learn of the accusation and “felt sick to the stomach” that it had been made. She felt it was “a smear” on her reputation and she was “in shock and disbelief”. She felt “robbed of [her] dignity”. She was “worried about criminal charges and possibly going to jail because of the accusation” and this was her “biggest worry at the time”. She believes she called the Employee Assistance Program at this time and spoke to someone two or three times.
24.BFX attended the meeting on 10 May 2021. She was told she could have a support person, and her sister and a union representative attended with her. She denied touching anyone inappropriately and said she was not on a bus trip on 30 March 2021 but was working on putting together an Easter show for the residents. Ms Kildey said she would put her version of events to Mr Chioatto for his response.
25.On 17 May 2021, BFX returned to work but says she was “feeling quite stressed and fearful” of running into Mr Chioatto. On 18 May 2021, she emailed her employer for a copy of “the investigation report”. On 19 May 2021, she sent an email saying she could not come to work that day because of her concerns about running into Mr Chioatto.
26.On 20 May 2021, BFX received an “outcome letter”. She was “distraught” that it said there was insufficient information. She returned to work around this time and was “extremely anxious”; she was scared of seeing Mr Chioatto and having a confrontation or another false accusation made against her; when she came across him on her first day back, she became “very anxious and shaky” and locked herself in an office, crying.
27.BFX states that she understands the internal investigation could not substantiate Mr Chioatto’s allegations. She believes he was not happy with the outcome and the respondent engaged Resolve HR to conduct an independent investigation. She attended an interview with “Trish” as part of that investigation but became too upset to continue and she felt “demoralized”.
28.BFX states that she tried to put the matter behind her when she returned to work but, after the meeting with Trish, she became demoralised and was “constantly ruminating about the accusation”. On 24 June 2021, she saw her doctor because she “was not herself”. She has not returned to work since.

Notes of discussion with Mr Chioatto on 5 May 2021

29.On 5 May 2021, Mr Chioatto met with Barry Cowling and Marica Cloran. Notes of the meeting show that it was to discuss an incident which he described as taking place “a couple of weeks ago in March”. He could not recall the date but it was on an outing with residents to a marina near Haberfield. He and BFX were the only staff members present. She came up to him and “slapped/pat” him on the bottom and made a remark along the lines of “I don’t know why I did that”. He felt uncomfortable and did not know how to react. The incident had been playing on his mind because it was unresolved and he felt uncomfortable working with BFX. He said there had been “other inappropriate moments” with her but he had been able to deal with them.[4]
[4] Reply page 173.
30.The notes show that Mr Chioatto said that “Morag” was aware of the incident since he had reported it to her.
31.According to an email from Morag Miles to Ms Kildey on 11 May 2021, Mr Chioatto raised the incident with her on 30 April 2021. At that point he did not want any action taken and said he wanted to discuss the matter “with HR”.[5]
[5] Reply page 166.

The “Stand Down” letter

32.The letter dated 5 May 2021 advised BFX she had been “stood down from duties on full pay effective immediately” and she was required to attend a meeting with Ms Kildey and a “HR officer” on 10 May 2021 to discuss “an allegation of inappropriate workplace conduct”. In particular, it was alleged that, on 30 March 2021, she “touched a fellow employee on the bottom whilst they were preparing drinks for the residents whilst on a bus outing”. The letter advised that she could bring a support person to the meeting.[6]
[6] Reply page 178.
33.It appears, from a copy of an email submitted by BFX, that Ms Kildey sent the letter to her by email at 4.58pm on 5 May 2021.
Minutes of meeting with BFX on 10 May 2021
34.Minutes of the meeting with BFX on 10 May 2021 refer to the item for discussion as “on the bus outing in March 2021, Luke accused BFX to touch him on the bottom”.^[7]
[7] Reply page 170.
35.The minutes record that BFX had “no recollection of any touching, maybe only a pat on his back as she was trying to pass him”. She said she was not on this trip; she was “at ABH on the easter show”. She was “a little teary and upset about the alleged incident”.

Minutes of meeting with Mr Chioatto on 11 May 2021

36.Ms Kildey met with Mr Chioatto on 11 May 2023 to discuss BFX’ response to his allegation. Minutes of the meeting show that BFX had said there was no inappropriate touching on his bottom “maybe a light tap on his shoulder”. Mr Chioatto said she took a resident off the bus and he was serving beverages. When she came back with the resident, he (Mr Chioatto) was facing the seat getting a beverage for someone and was distracted with residents. She then “slapped his bottom with one hand”; he “needed a few minutes to clear his head” so he walked off the bus and returned after a few minutes and help to serve drinks. He said he did not want to get her into trouble but he stood by his allegations. He said he felt uncomfortable working alongside her since the incident.
37.The minutes note that there were “two different stories”; Ms Kildey would check the resident list and might interview some residents, depending on their health condition. She was to re-interview BFX.

Request to attend further meeting

38.By letter dated 11 May 2021, the respondent advised BFX that she was required to attend a meeting with Ms Kildey the following day to further discuss the details of the alleged incident. The letter advised she could bring a support person and reminded her of the Employee Assistance Program.[8]
[8] Reply page 176.

Minutes of meeting with BFX on 12 May 2021[9]

[9] Reply page 171.

39.Minutes of the meeting with BFX on 12 May 2021 record that Mr Chioatto’s recollection was that he was serving beverages to residents inside the bus in the front row of the seat; BFX was coming towards him and slapped his bottom. The minutes show she still had no recollection or any inappropriate touching, and none of the residents on the bus outings in March were in “good mental condition to be interviewed”.
40.The minutes show that BFX would think about her “return to work options” including working different shifts from Mr Chioatto.

Email to Ms Kildey on 19 May 2021[10]

[10] ARD page 24.

41.On 19 May 2021, BFX sent an email to Ms Kildey stating that she was concerned about the possibility of running into Mr Chioatto. She said she was “terrified of being in the same facility as Luke knowing that a false accusation of sexual harassment was so easily fabricated, defaming me in my workplace and creating enormous amounts of chaos in my life”. She said she refused to work with him again or be around him. Ms Kildey responded the same day to say she would call BFX to discuss options.[11]
[11] ARD page 24.

The “Outcome letter”

42.By letter dated 20 May 2021, Ms Kildey advised BFX that the allegation that she had touched Mr Chiaotto on the bottom on a bus outing during March 2021 on a date which could not be confirmed but it was “near the water” was “Not sustained – insufficient information”.[12]
[12] Reply page 181.
43.The letter stated that it had been found that the alleged conduct could not be confirmed because there were no witnesses, she categorically denied the allegation and “Mr Chioatto did not see who allegedly touched him on the bottom (there were residents on and off the bus at the time of the alleged incident)”.
44.The letter referred to arrangements for BFX’ return to work and concluded that the respondent “now considers these matters closed”.

Resolve HR appointed to conduct external investigation

45.Ms Kildey provided a statement (below) in which she says “in consultation with HR”, she felt it appropriate to appoint an outside investigator. Resolve HR was briefed and commenced their investigation on 15 June 2021.

BFX’ statement to Resolve HR

46.BFX provided an undated statement addressed to “Trish” at Resolve HR. She stated she could not find words to express the impact that the false accusation had on her life, emotionally and psychologically; she felt afraid and unsafe. She stated that Mr Chioatto’s account of the date, time, place and occurrence of events had changed over time. She reiterated that she was not on a bus trip with him on 30 March 2021.

Resolve HR report

47.Nick Hedges and Trish Ryan of Resolve HR commenced interviews on 18 June 2021 and prepared a report for the respondent dated 29 June 2021.[13] They refer to the allegations that BFX “slapped” Mr Chioatto on the bottom and, immediately afterwards, said words to the effect of “sorry I don’t know why I did that but it was right there”. They refer to a further allegation that, at some point after the alleged incident, she said words to Mr Chioatto to the effect of “maybe I should just divorce my husband and move in with you”.
[13] Reply page 183.
48.Resolve HR concluded that the allegations that BFX slapped Mr Chioatto on the bottom, that she said she did not know why she had done that, and the comment about divorcing her husband were “unable to be substantiated”. They were unable to substantiate that she had engaged in any conduct that could amount to sexual harassment under legislation or the respondent’s policy. The report describes both Mr Chioatto and
BFX as “open and cooperative” and “visibly upset” during interviews.
49.The report records that BFX felt empathy for Mr Chioatto but was “scared because she felt that he was able to raise untrue allegations against her and damage her reputation and cause her significant distress”.
50.The report lists the documents provided to Resolve HR for the purposes of its investigation. In addition to the respondent’s various policy documents and a record of bus outings in March 2021, it includes a summary of the discussion with Mr Chioatto on 5 May 2021, the letter to BFX on 5 May 2021 and letters to them dated 15 June 2021 about the external investigation.[14]
[14] Reply page 188.

AB Investigations report

51.AB Investigations (ABI) prepared a report for the respondent dated 18 August 2021 which summarises the complaint and responses, and the investigation by Resolve HR.[15]
[15] Reply page 40.
52.ABI reported that they interviewed BFX on 13 August 2021 with her sister present. Throughout the interview she was “extremely upset and distraught”.[16] ABI also obtained a statement from Ms Kildey. They did not interview Mr Chioatto; the respondent asked that he not be interviewed because of the possibility it would prompt him to make a similar claim, given how upset he was over the interview process and his interview with Resolve HR.
[16] Reply page 41.

Ms Kildey’s statement to ABI

53.Ms Kildey provided a statement to ABI on 17 August 2021.[17] She describes BFX’ duties including taking residents on bus outings on which she or Mr Chioatto would drive the bus.
[17] Reply page 52.
54.Ms Kildey states that she is aware that, on 30 April 2021, Mr Chioatto raised a complaint that, on 30 March 2021 during a bus outing, BFX acted in an inappropriate manner by touching or patting his bottom. Ms Kildey refers to the “Stand Down” letter and states that she instigated an internal investigation in the course of which Mr Chioatto was interviewed and she “caused for several of the residents to be spoken to” because BFX strongly denied the incident and she was “unable to determine any supporting witness”. As a result of her inquiries, Ms Kildey states that she believed there was no evidence to substantiate the allegation. She states that, during the internal investigation process, BFX was clearly upset.
55.Ms Kildey refers to the “Outcome letter” dated 20 May 2021 advising that the allegations were not sustained because of insufficient information.
56.Ms Kildey states that, “in consultation with HR”, she felt it appropriate to appoint an outside investigator. Resolve HR were briefed and commenced their investigation on 15 June 2021. BFX was interviewed on 18 June 2021. She became upset during the interview, she went off work and remained off work.
57.Ms Kildey states that she is aware that the investigators made a similar finding to the outcome letter. She states that she did not wish Mr Chioatto to be interviewed further; he had already been interviewed at length twice and he had become upset at the investigators’ interview.

BFX’ statement to ABI[18]

[18] Reply page 54.

58.BFX was interviewed on 12 August 2021. She again denied the allegations and said that, because of them, she had been subject to internal and external work investigations. She stated this was “the first time that [she had] ever been subject to any investigation and [she] found the process very humiliating and very upsetting”. She said she became very upset during the interview with Resolve HR. She said she would find it too upsetting to have to relieve the events in detail in a further interview and she did not wish to discuss the interview with Resolve HR.

Ms Kildey’s statement dated 20 March 2023

59.Ms Kildey provided a further statement on 20 March 2023 (signed on 4 April 2023).[19] She refers to her statement dated 17 August 2021. She states that, as a result of Mr Chioatto’s complaint, she caused the incident to be investigated internally. The investigation was inconclusive as no witnesses could be located other than Mr Chioatto and BFX.
[19] AALD page 4.
60.Ms Kildey states that she had been asked by ABI for further information as to “what triggered the external investigation with Resolve HR” and whether this accorded with the respondent’s policies and procedures.
61.Ms Kildey states that she recalled that both parties were disappointed with the outcome of the internal investigation, and that she had said it might be possible for an external independent investigation to be conducted, but she would have to discuss this with the HR department. She later spoke with both parties and advised them it was an option and they both agreed they wanted the external investigation to be carried out. She states she does not recall BFX being upset or distressed because of the further investigation; her best recollection is they were both open “quite happy and willing” for it to proceed. She believes the second investigation was conducted professionally and in accordance with “HR best practice and procedures”.

Clinical records

62.Clinical records from Campbelltown Medical and Dental Centre are in evidence.[20] They show that BFX saw Dr Ebtesam Ford on 14 May 2021.[21] Dr Ford recorded:
[20] ARD page 49.
[21] ARD page 55.
“Mental Health Care Plan
a Co-Worker accused her of inappropriate touching
he lodged a complaint
then when [?] he retracted his claim saying that it probably was one of the residents touched him rather than [her]
The second occasion she supposedly touched him in the bus, though [?] she wasn’t rostered on the bus that day
she was rostered lunch with residents”

63.On 24 June 2021, Dr Austin Ndhlovu recorded that BFX was stood down on
5 May 2021:
“while alleged sexual injury
claim was being investigated
investigation was inconclusive
person appealed and external [?] Interviewed on 18 June”^[22]
[22] ARD page 54.

64.On 30 June 2021, Dr Ndhlovu recorded "call Dr Karl Noyeux”.
65.Dr Noyeux’s clinical notes are in evidence.[23] On 13 July 2021,[24] he recorded that
BFX reported “that she suffered from false allegations made against her by one of her fellow workers [which] brought her to a depressed mood at all times”. She said she felt “worthless because of the unresolved work matters” and the false allegations made her feel unsafe. Dr Noyeux took a history of the investigation and that BFX said that “never in her life she had touched anyone inappropriately”. She felt “broken” since these false accusations and she felt “like a worthless criminal”. After the meetings on 10 May 2021 and 12 May 2021, she was struggling to sleep and “constantly feeling nervous about the whole incident”. She said her whole life had changed and she felt punished for things she had never done. When an investigator was sent to her house, she felt “humiliated and was treated like a criminal”. She said the accuser had “destroyed her professional and personal life”. She was feeling “hopeless and helpless about all these incidents and false allegations on her”.
[23] ARD page 231.
[24] ARD page 236.
66.In subsequent consultations, Dr Noyeux recorded ongoing symptoms. On 14 September 2021, he recorded that BFX said she was “extremely worried about the current allegations”. On 21 October 2021, she told him she felt anxious “about everything” and she was feeling anxious about the investigations. She was worried about going back to work because she felt unsafe.[25] On 27 October 2021, she said an investigator was sent to her house and she felt humiliated and was treated like a criminal.
[25] ARD page 245.
67.In a report dated 9 August 2021, Dr Noyeux set out the history and summarised his diagnosis and recommendations for treatment.[26]
[26] ARD page 247.

Dr Nagesh’s report[27]

[27] ARD page 40.

68.Dr Abishek Nagesh, psychiatrist, saw BFX on 7 March 2022 for assessment. He took a history that she became anxious around May 2021 because of the false accusation against her and this became worse as the investigation continued. She started to worry all the time and, when she returned to work in June 2021, she was always worried and anxious that she would bump into Mr Chioatto. She became depressed and anxious “because of all the accusations and the process through the investigations”.
69.Dr Nagesh diagnosed BGU as meeting the criteria for major depressive disorder of moderate to severe degree with anxiety features. He said:
“Because of the false accusations against [her] she had to change her role, and in the context of false accusations, the stressful process of being the subject of an investigation, having to change her role she has developed the following alleged symptoms …”

70.Dr Nagesh said BFX’ employment was the substantial contributing factor to her injury “where false accusations were made against her of sexual assault, in the context of this false accusation [she] has developed the psychological injury”.

Dr Kumar’s reports

71.Dr Kumar, psychiatrist, has provided reports dated 11 November 2021, 28 April 2022 and
15 August 2022.[28]
[28] Reply pages 13, 21 and 25.
72.In his first report, Dr Kumar diagnosed BFX as suffering from an adjustment disorder which developed “in response to the allegations made against her, as well as the repetitive investigations that she was subjected to”. He noted that the allegations were not substantiated and said this experience had led to the onset of her current symptoms.
73.In his report dated 28 April 2022, Dr Kumar responded to a question as to which of the initial accusation, initial investigation, subsequent accusation and subsequent investigation was the whole or predominant cause of the injury. He cited events leading up to the internal and then the external investigation. He said, based on these, “the predominant cause is a combination of above events where she was advised about an investigation in May 2021 and was taken off work.” He said the subsequent investigations and accusations had a "cumulative effect in the onset and perpetuation of her psychiatric symptoms”. He said it was not possible to provide a "percentage amount" for these events.
74.In his third report, Dr Kumar said he diagnosed BFX as suffering from persistent depressive disorder (dysthymia). He said the cause of her injury was “the accusations of sexually assaulting someone at workplace and the subsequent investigations”.

THE RESPONDENT’S SUBMISSIONS

75.For the respondent, Mr Gaitanis submits that the respondent satisfies the application of
s 11A. He refers to the authorities considered by Sackville AJA in Northern New South Wales Local Health Network v Heggie[29] from which he distilled the propositions set out below.
[29] Northern New South Wales Local Health Network v Heggie [2013] NSWCA 255 (Heggie).
76.Mr Gaitanis submits that it is important to note that BFX provided a statement to AB Investigations on 12 August 2021 in which she stated she first learned of Mr Chioatto’s allegation in the letter dated 5 May 2021. In her statement dated 15 December 2022, she said she received a letter by email at home on 5 May 2021 confirming she was stood down and asking her to attend a meeting.
77.Mr Gaitanis summarises BFX allegations of injury, the minutes of meetings, the outcome of the internal investigation, and Ms Kilbey’s decision that it was appropriate to appoint an outside investigator.
78.With respect to whether BFX’ injury was wholly or predominantly due to the respondent’s action’s with respect to discipline, Mr Gaitanis refers to her statement that she was worried about criminal charges and possibly going to jail because of the accusation, and this was her “biggest worry at the time”; that she was distraught about receiving the “outcome letter” on 20 May 2021; that she became too upset and was unable to continue the interview with Trish on 18 June 2021; and after that meeting she became “demoralised”.
79.Mr Gaitanis submits that BFX’ concern about criminal charges and possible jail is instructive; she recognised the gravity of the allegation and was commensurately concerned. In her statement to “Trish” on 12 August 2021, she said she had never been subject to investigation before and she found the process “very humiliating and very upsetting”. She stated that she was not able to return to work after the investigation by Resolve HR and she consulted Dr Ndhlovu. Mr Gaitanis submits there is a temporal connection between the second investigation and consulting Dr Ndhlovu who certified BFX unfit for work from 24 June 2021. She confirms in her statement dated 15 December 2022 that she could not return to work after the second investigation and seeing Dr Ndhlovu.
80.Mr Gaitanis submits that the only plausible explanation for the onset of BFX’ psychological injury is the interview and the investigation process, and that her injury was wholly or predominantly due to that process.
81.Mr Gaitanis submits that Dr Nagesh’s report provides further support to the causation element of the defence. Further, that it is not plausible that the allegations in and of themselves caused the psychological injury. BFX recognised that her employment was at risk or that she might be charged with a criminal offence.
82.Mr Gaitanis submits that Dr Kumar maintained his opinion that BFX’ diagnosis was caused by the accusations of sexually assaulting someone in the workplace and the subsequent investigations, and that Dr Nagesh’s opinion supports the respondent. Further, Mr Gaitanis submits, the date of injury coincides with the date she was issued with the standdown letter.
83.With respect to whether the respondent’s actions amounted to “action with respect to discipline” Mr Gaitanis submits that a broad view is to be taken of that expression. He relies on Heggie and to Wilkinson v New South Wales.[30] Mr Gaitanis submits that the allegations and investigation process come within the purview of discipline.
84.As to whether the respondent’s action was reasonable, Mr Gaitanis refers to authorities including Heggie, Irwin v Director General of Education[31], Ivanisevic v Laudet Pty Ltd[32] and Department of Education and Training v Sinclair.[33]
85.Mr Gaitanis submits that the respondent correctly initiated an investigation in response to
Mr Chioatto’s allegation. It was an entirely reasonable response to the serious allegations for the respondent to issue BFX with a letter setting out the allegations and subsequent letters about attendance at a meeting and the external investigation. Further, she was offered a support person as well as the Employee Assistance Program. In doing so, the respondent followed its own policy and procedures in relation to the matter of discipline.
86.Ms Kildey’s evidence is that BFX and Mr Chioatto were both disappointed with the outcome of the internal investigation and they discussed the possibility of an external independent investigation. Ms Kildey’s best recollection is that both were happy and willing for the second investigation to proceed. Mr Gaitanis submits that an independent, transparent investigation was most appropriate given the dispute as to what had occurred, and it was in accord with the respondent’s policies.
87.Mr Gaitanis refers to the decision of the President, Judge Phillips, in Van Vliet v Landscape Enterprises Pty Ltd[34] in which he said that reasonableness does not require a process of discipline to be flawless and it does not require “a counsel of perfection”. Mr Gaitanis refers also to the judgments in CPCF v Minister for Immigration and Border Protection,[35] and Commissioner of Police v Minehan.[36] Mr Gaitanis submits that BFX was afforded fairness and it cannot be said that the respondent’s actions fell outside of reasonableness.
[30] Wilkinson v New South Wales [2020] NSWCCPD 52.
[31] Irwin v Director General of Education (Compensation Court of NSW, Geraghty CCJ, 18 June 1998, unreported).
[32] Ivanisevic v Laudet Pty Ltd (Compensation Court of NSW, Truss CCJ, 24 November 1988, unreported).
[33] Department of Education and Training v Sinclair [2005] NSWCCA 465 (Sinclair)
[34] Van Vliet v Landscape Enterprises Pty Ltd [2022] NSWPICPD 49
[35] CPCF v Minister for Immigration and Border Protection (2015) 255 CLR 514.
[36] Commissioner of Police v Minehan [2003] NSWCA.

THE APPLICANT’S SUBMISSIONS

88.Mr McManamey refers to BFX’ statement of evidence that her injury developed because of Mr Chioatto’s false accusations. She was not told, before being summoned to the meeting on 5 May 2021, what it was about or that she could have a support person present. She was not told at the meeting who the complainant was or the specifics of the allegation, but that she had to leave immediately. She received the letter dated 5 May 2021 once she was at home.
89.Mr McManamey refers to BFX’ evidence that she responded immediately to the letter that she was not on the bus trip on 30 March 2021, and she pointed this out again at the meeting on 10 May 2021.
90.Mr McManamey submits that, when Mr Chioatto first raised the complaint, on 30 April 2021, he said he was getting on the bus when BFX touched him on the bottom and made him feel uncomfortable. In contrast, at the interview on 11 May 2021, he said she slapped his bottom while he was serving a resident.
91.Mr McManamey submits that the respondent made no attempt to interview any of the residents identified in the notes of the meeting on 11 May 2021.
92.With respect to the independent investigation, Mr McManamey submits that BFX says it occurred because Mr Chioatto was not happy with the outcome; she did not request a second investigation. Resolve HR does not appear to have been provided with any new information and they did not interview any other witnesses. During the process, Mr Chioatto made two further allegations which could not be substantiated.
93.Mr McManamey submits that the respondent’s actions do not fall within the meaning of discipline in s 11A. He submits that the investigation could not substantiate any of the allegations and no disciplinary action was subsequently taken. Mr McManamey refers to the decision of Deputy President Wood in Webb v State of NSW[37] in which an allegation was made of misconduct. That decision is referred to below.
[37] Webb v State of NSW [2019] NSWWCCPD 50 (Webb).
94.Mr McManamey submits that the present case is very similar to Webb in which a complaint was made which the respondent thought it had to investigate. In due course, the worker was completely exonerated; none of the actions taken were in themselves disciplinary in nature.
95.Mr McManamey further submits that a distinction should be drawn between the respondent’s action in undertaking the investigation, and the actions of Mr Chioatto. Mr McManamey submits that his actions are not the actions of the employer. In any event, given that his allegations could not be substantiated and were denied by the applicant, the respondent is unable to discharge the onus of establishing that his actions were reasonable.
Mr McManamey submits this case is distinguishable from Wilkinson in which the allegation was made by the employer itself.
96.Mr McManamey submits that the medical evidence supports the finding that the allegations themselves were significant in the causation of injury. He refers to Dr Kumar’s reports in which he makes no attempt to separate the contribution of the allegations from the contribution of the investigation, and to his subsequent reports in which he says the predominant cause was the combination of events. Mr McManamey submits it is clear that
Dr Nagesh saw the false allegations as the predominant cause of the injury, and this is consistent with the clinical notes of Dr Ford[38] and Mr Noyeaux.
97.Mr McManamey submits that the respondent’s actions were not reasonable; there was no basis for suspending the applicant and sending her home as if she was guilty; the respondent already knew that the allegation was uncertain as to when and how it happened and there was clearly scope to allow her to continue working, only not with Mr Chioatto. It was also unreasonable to expose BFX to the stress of a second, external investigation in which no additional information was provided and it was inevitable that the same conclusion would be reached.
98.Mr McManamey submits that there is no evidence distinguishing the various contributing causes and establishing that the whole or predominant cause of BFX’ injury was the investigation. It follows that the s 11A defence has not been made out and BFX is entitled to weekly payments based on her undisputed PIAWE of $1,007.98. ($957.58 for the first 13 weeks and $806.38 thereafter, subject to indexation. Further that she is entitled to a general order for medical expenses pursuant to s 60 of the 1987 Act.
CONSIDERATION
99.Section 11A(1) of the 1987 Act provides:
“No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, discipline, performance appraisal, retrenchment or dismissal or provision of employment benefits to workers.”

[38] ARD page 55.

There is no dispute that BFX suffered a psychological injury as a result of the events which occurred from 5 May 2021. The issue is whether the respondent is entitled to succeed because the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken with respect to discipline.
The respondent bears the bonus of establishing the defence on the balance of probabilities: Pirie v Franklins Ltd:[39] and Sinclair.
[39] Pirie v Franklins Ltd [2001] NSWCC 167; (2001) 22 NSWCCR 346.
In Heggie, Sackville J said at [59] that the following propositions are consistent with the statutory language and how the authorities that have construed s 11A(1) of the 1987 Act:
“(i) A broad view is to be taken of the expression "action with respect to discipline". It is capable of extending to the entire process involved in disciplinary action, including the course of an investigation.
(ii) Nonetheless, for s 11A(1) to apply, the psychological injury must be wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer.
(iii) An employer bears the burden of proving that the action with respect to discipline was reasonable.
(iv) The test of reasonableness is objective. It is not enough that the employer believed in good faith that the action with respect to discipline that caused psychological injury was reasonable. Nor is it necessarily enough that the employer believed that it was compelled to act as it did in the interests of discipline.
(v) Where the psychological injury sustained by the worker is wholly or predominantly caused by action with respect to discipline taken by the employer, it is the reasonableness of that action that must be assessed. Thus, for example, if an employee is suspended on full pay and suspension causes the relevant psychological injury, it is the reasonableness of the suspension that must be assessed, not the reasonableness of other disciplinary action taken by the employer that is not causally related to the psychological injury.
(vi) The assessment of reasonableness should take into account the rights of the employee, but the extent to which these rights are to be given weight in a particular case depends on the circumstances.
(vii) If an Arbitrator does not apply a wrong test, his or her decision that an action with respect to discipline is or is not reasonable is one of fact.”

Was the respondent’s action with respect to discipline?

A broad view is to be taken of the expression "action with respect to discipline". It is capable of extending to the entire process involved in disciplinary action, including the course of an investigation: Heggie.
Mr McManamey submits that the investigation undertaken by the respondent could not substantiate any of the allegations against BFX and no disciplinary action was subsequently taken. He submits that none of the actions taken by the respondent were themselves disciplinary in nature. He relies on the decision of Deputy President Wood in Webb.
In Webb, an allegation of misconduct in his home was made against the worker. He was advised at a meeting that an investigation would take place, his name would be placed on a register and he would be transferred to office duties during the investigation. He went off work that day. Following the investigation, he was completely exonerated. Before the Arbitrator, the only issues were whether the meeting and the matters discussed at it constituted matters with respect to discipline and, if so, whether the respondent’s actions were reasonable. The Arbitrator found for the respondent on both.
Setting aside the decision, Deputy President Wood said at [102]:
“The fact that there was a potential for action with respect to discipline is not sufficient to establish that the action conducted by the respondent in calling the meeting and investigating the complaint could be categorised as disciplinary.”
Deputy President Wood said the fact that the worker was exonerated was not determinative of whether the process that took place was in respect of discipline.
Deputy President Wood referred to the “limited” authorities on how to construe ”discipline” in s 11A. She referred to Spigelman CJ’s observation in Sinclair that:
“Such actions usually involve a series of steps which cumulatively can have psychological effects. More often than not it will not be possible to isolate the effect of a single step. In such a context the ‘whole or predominant cause’ is the entirety of the conduct with respect to, relevantly, discipline.”
In determining whether action is with respect to discipline, Deputy President Wood said:
“It will be relevant in the characterisation of the actions, to look at the process as a whole in order to reach a conclusion as to whether it constituted action with respect to discipline, or any of the matters referred to in s 11A(1).”
Deputy President Wood said:
“The above passages establish that some part of the process of the actions taken by or on behalf of the employer must have the characteristic of being disciplinary in nature. Each case must be determined on its own facts. In the present case, it is true that the respondent may have instigated a disciplinary process had the allegation been proved. However, in the circumstances where the actions taken by the respondent, that is, where the appellant was not being investigated about any breach of conduct or any blemish in his performance in the workplace, what may or may not eventuate cannot be relied upon to change the characterisation of the actions that did take place.”
Deputy President Wood referred to Kushwahav Queanbeyan City Council[40] and subsequent decisions about the scope of “discipline” for the purposes of s 11A(1). She said that, despite the broad interpretation suggested in Kushwaha,
“… there was no process instigated to “discipline” the appellant within the scope of the meaning attributed to it in the more recent authorities or in Kushwaha. None of the actions taken by the respondent in conducting the meeting and performing the investigation fell within the parameters of discipline, as that term is explained.”
[40] Kushwahav Queanbeyan City Council [2002] NSWCC 25 (Kushwaha)
At [118] she said:
“No aspect of the steps actually taken in the whole process which did occur had the capacity, of their own, to constitute being disciplinary in nature, as “discipline” has been defined in the various authorities referred to above. This is so whether you apply the broader meaning initially enunciated by Neilson CCJ in Kushwaha, or take the narrower approach suggested by more recent authority.”
The fact that Mr Chioatto’s allegations could not be substantiated is not of itself determinative of whether the action constituted discipline. However, it is relevant that the Resolve HR investigation concluded that they were unable to substantiate that BFX “had engaged in any conduct that could amount to sexual harassment under legislation or the respondent’s policy”. ABI reached the same conclusion. In that regard, this case is on all fours with Webb.
The authorities make clear that the fact that disciplinary action might have occurred, had the allegations been sustained, is not enough to characterise the respondent’s action as “discipline”.
Commencing with the meeting on 5 May 2021, the respondent sought to establish whether Mr Chatto’s allegations could be sustained. It is not uncommon in matters such as this to see advice to a worker about the potential for action if an allegation is substantiated. However, nothing in the correspondence with BFX or the notes of discussions even did that; there was no suggestion of disciplinary action. That is not itself determinative. However, before embarking on any conduct in the nature of “discipline”, the respondent sought to determine what had happened. Nothing in the investigations approached disciplinary action or even action “proposed to be taken” by the respondent with respect to discipline.
For these reasons, I find that the respondent has failed to establish that its action were with respect to discipline. It follows that the defence fails.

Was the injury wholly or predominantly caused by the respondent’s action

Even if the respondent’s action constituted action in respect of “discipline”, I am not persuaded that BFX’ psychological injury was wholly or predominantly caused by that action.
“Wholly or predominantly caused” has been held to mean “mainly or principally caused”. The test of causation to be applied is that described in Kooragang Cement Ltd v Bates;[41] Ponnan v George Weston Foods Ltd;[42] Temelkov v Kemblawarra Portuguese Sports and Social Club Ltd.[43]
[41] Kooragang Cement Ltd v Bates (1994) 35 NSWLR 452; (1994) 10 NSWCCR 796.
[42] Ponnan v George Weston Foods Ltd [2007] NSWWCCPD 92.
[43] Temelkov v Kemblawarra Portuguese Sports and Social Club Ltd [2008] NSWWCCPD 96 .
The question of causation in s 11A must be addressed by medical evidence. In Hamad v Q Catering Limited[44] [2017] NSWWCCPD 6, Deputy President Snell said at [88]:
“The extent to which aspects of the appellant’s history contributed to causing the psychological injury was not, in the circumstances, something which could be decided in the absence of medical evidence. There may be cases in which causation of a psychological injury can be established without specific medical evidence, for example where there is a single instance of major psychological trauma, with no other competing factors. The need for medical evidence, dealing with the causation issue in s 11A(1) of the 1987 Act, will depend on the facts and circumstances of the individual case. In the current case, as in most, there are a number of potentially causative factors raised in the appellant’s statement and the medical histories. Proof of whether those factors, which potentially provide a defence under s 11A(1), were the whole or predominant cause of the psychological injury, required medical evidence on that topic.”
[44] Hamad v Q Catering Limited [2017] NSWWCCPD 6.
BFX maintains it was the “false allegations” against her which caused her injury. The respondent maintains that, starting with the meeting on 5 May 2023, it was the investigation.
As Spigelman CJ observed in Sinclair, actions with respect to discipline commonly involve a series of steps which, cumulatively, can lead to injury and more often than not it is not possible to isolate the effect of a single step, and the whole or predominant cause is the entirety of the conduct with respect to the s 11A ground relied on. That comment was in the context of the broad approach to be taken to the meaning of “discipline” but it underlines the difficult there can be in assessing the whole or predominant cause.
In this case, the difficulty is compounded by the fact that the allegations were brought to
BFX’ attention simultaneously with being told about the investigation.
Mr Gaitanis submits that it is important to note that BFX provided a statement to ABI on 12 August 2021 in which she stated she first learned of Mr Chioatto’s allegation in the letter dated 5 May 2021, and in her statement dated 15 December 2022, she said she received a letter by email at home on 5 May 2021 confirming she was stood down and asking her to attend a meeting. The significance of this is not clear to me and I do not see how it helps the respondent.
Mr Gaitanis submits that BFX was aware of the seriousness of the allegation and the potential, she believed, for her to be gaoled, and she felt treated “like a criminal”; she said that was her “biggest worry” at the time. Mr Gaitanis submits it is clear that it was the investigation itself and its potential consequences that caused her injury.
I do not see that it follows from BFX’ statements that the investigation was the predominant cause. As Mr McManamey submits, BFX also said she was upset that the accusation had been made; she had no idea why Mr Chioatto made the accusation; she was stressed and fearful about running into him at work; and she felt her reputation had been besmirched.
The first record of BFX seeing a doctor was on 14 May 2021 when Dr Ford noted “Mental Health Care Plan” and that she had been accused of inappropriate touching and a co-worker had lodged a complaint. There is no reference to the investigation.
On 24 June 2021, Dr Ndhlovu recorded that BFX had been stood down while the complaint was being investigated and that the investigation was inconclusive.
On 13 July 2021, Dr Noyeux recorded that BFX reported “that she suffered from false allegations made against her by one of her fellow workers [which] brought her to a depressed mood at all times”. She said she felt “worthless because of the unresolved work matters” and the ongoing grief for false allegations made her feel unsafe. She said she had “never in her life she had touched anyone inappropriately” and she felt “broken” since the false accusations and she felt “like a worthless criminal”. She felt punished for things she had never done, and she felt “humiliated” and “treated like a criminal” when the ABI investigator came to her house. Mr Chioatto had “destroyed her professional and personal life” and she felt “hopeless and helpless about all these incidents and false allegations on her”.
Dr Noyeux recorded on 14 September 2021 that BFX was “extremely worried about the current allegations”. On 21 October 2021, she was “feeling anxious about the investigations”.
Dr Noyeux’s records suggest that the “false allegations” were the predominant cause of her injury. At most, they suggest that the investigation was equally causative, but not more so.
Dr Nagesh took a history that BFX became anxious around May 2021 because of the false accusation against her and this became worse as the investigation continued. She became depressed and anxious “because of all the accusations and the process through the investigations”. In diagnosing major depressive disorder, he said:
“Because of the false accusations against [her] she had to change her role, and in the context of false accusations, the stressful process of being the subject of an investigation, having to change her role she has developed the following alleged symptoms …”
Dr Nagesh said BFX’ employment was a substantial contributing factor to her injury “where false accusations were made against her of sexual assault, in the context of this false accusation [she] has developed the psychological injury”.
As I read Dr Nagesh’s report, his view is that BFX’ psychological injury developed from the “false accusations” and became worse as the investigation continued. I do not agree with the respondent that his report supports the conclusion that the investigation was the whole or predominant cause.
Dr Kumar in his first report said BFX had an adjustment disorder which developed “in response to the allegations made against her, as well as the repetitive investigations that she was subjected to”. When asked which of the initial accusation, initial investigation, subsequent accusation and subsequent investigation was the whole or predominant cause of the injury, he cited events leading up to the internal and external investigations and said the predominant cause was a combination of these events which had "cumulative effect in the onset and perpetuation of her psychiatric symptoms”. He said it was not possible to provide a "percentage amount" for these events.
In his third report, Dr Kumar said the cause of BFX’ injury was “the accusations of sexually assaulting someone at workplace and the subsequent investigations”.
In my view, none of the reports can be read as supporting a finding that the investigation was the whole or predominant cause of BFX’ injury.
I do not agree that the evidence supports a finding that the investigation process was the whole or predominant cause of BFX’ injury. There is no question that it contributed to her injury. However, considering the medical evidence, I find that it played, at most, an equal part with the allegations made by Mr Chioatto; it did not play the predominant part.
For these reasons, I find that the respondent has not discharged its onus to establish that
BFX’ injury was wholly or predominantly caused by action taken or proposed to be taken with respect to discipline. It follows that it is not necessary to determine whether the respondent’s action was reasonable.
As I find that the respondent’s defence fails, I find that BFX is entitled to weekly payments pursuant to ss 36 and 37 of the 1998 Act as claimed, and to reasonably necessary medical expenses.
The matter is remitted to the President for referral to a Medical Assessor to assess
BFX’ whole person impairment as a result of the psychological injury.

[2023] NSWPIC 302

27 June 2023