Concrete Technologies Pty Limited v Fu
[2008] NSWWCCPD 132
•7 November 2008
| WORKERS COMPENSATION COMMISSION | ||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||
| CITATION: | Concrete Technologies Pty Limited v Fu [2008] NSWWCCPD 132 | |||||
| APPELLANT: | Concrete Technologies Pty Limited | |||||
| RESPONDENT: | Rachel Fu | |||||
| INSURER: | GIO General limited | |||||
| FILE NUMBER: | WCC1367-08 | |||||
| DATE OF ARBITRATOR’S DECISION: | 28 May 2008 | |||||
| DATE OF APPEAL DECISION: | 7 November 2008 | |||||
| SUBJECT MATTER OF DECISION: | Section 11A of the Workers Compensation Act 1987 | |||||
| PRESIDENTIAL MEMBER: | Acting Deputy President Kevin O’Grady | |||||
| HEARING: | On the papers | |||||
| REPRESENTATION: | Appellant: | Sparke Helmore | ||||
| Respondent: | Keddies Lawyers | |||||
| ORDERS MADE ON APPEAL: | ||||||
| 1. | Paragraphs 1 and 3 of the Arbitrator’s decision dated 28 May 2008 are confirmed. | |||||
| 2. | Paragraph 2 of the Arbitrator’s decision dated 28 May 2008 is revoked and the following decision is made in its place: | |||||
| “2. That the Respondent pay the Applicant weekly compensation at the rate of $1185.56 from 26 October 2005 to 22 December 2005 pursuant to section 36 of the Workers Compensation Act 1987, the Respondent to have credit for any payments made.” | ||||||
| 3. | The Appellant is to pay the Respondent’s costs of this appeal. | |||||
BACKGROUND TO THE APPEAL
On 25 June 2008 Concrete Technologies Pty Limited (‘the Appellant’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 28 May 2008.
The Respondent to the Appeal is Rachel Fu (‘the Respondent’).
The Respondent, who is 32 years of age, commenced employment with the Appellant as an Assistant Accountant on 9 May 2005. At the time the Respondent commenced her employment her immediate superior was Mr Phillip Sheanoda. Mr Sheanoda remained in that position until his employment with the Appellant ceased, as stated by the Respondent, in September of 2005. His position with the Appellant was then taken up by Mr Dennis Lau.
The Respondent, who was initially employed on a probationary basis, had her position confirmed following a performance review in September 2005 and received at that time an increase in her salary calculated in accordance with the Consumer Price Index. It is stated by the Respondent that she had been happy in her work and had experienced no difficulties or complaint from her employer up to the time of Mr Sheanoda’s departure.
Mr Lau, by reason of his dissatisfaction with the Respondent’s work performance, arranged a meeting with her on 23 September 2005. Present at that meeting were the Respondent, Mr Lau and Mr Chung Tong (the Appellant’s Group Accountant). It seems that the Respondent’s duties were discussed in detail and certain advice was given during the course of that meeting.
The Respondent experienced difficulty with Mr Lau in the course of her work and at 4pm on 20 October 2005 arranged to meet with Mr Frank Levin (the Appellant’s Chief Financial Officer). It appears that Mr Levin encouraged the Respondent to find alternative employment.
Following the meeting with Mr Levin the Respondent developed sleeplessness, nausea and poor concentration and, on 21 October 2005, consulted her General Practitioner, Dr Ying Song. Dr Song certified the Respondent as being unfit for her work from 21 October 2005 to 26 October 2005. That certificate was forwarded to the Appellant. Dr Song stated his diagnosis in that certificate as being “stress, anxiety”.
It appears that Dr Song certified the Respondent as being fit for suitable duties from 1 November 2005. The Respondent returned to her work at which time she found that her entire work file had been deleted. The Respondent’s files were reinstalled by a Technician employed by the Appellant.
The Respondent attended her workplace on 2 November 2005 at which time she presented a WorkCover NSW Medical Certificate issued by Dr Song which certified that she was unfit to work from 26 October to 2 November 2005. A further meeting, as recorded in notes tendered in evidence by the Appellant, was held on that day and present were the Respondent, Mr Frank Levin and Mr Duncan Swanborough (the Appellant’s Payroll and OH&S Officer). It was suggested at that meeting that the Respondent should resign and a proposal was made on behalf of the Appellant concerning payment and the provision of career counselling with an external organisation. The Respondent ceased work by reason of her then state of health and presented medical certificates in support of her claim for compensation benefits against the Appellant.
A dispute arose as to the Respondent’s entitlement to the benefits claimed and an Application to Resolve a Dispute (‘ARD’) was filed on her behalf in the Commission on 25 February 2008. That Application came before an Arbitrator for conciliation/arbitration on 9 May 2008 and a Certificate of Determination issued on 28 May 2008.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 28 May 2008 records the Arbitrator’s orders as follows:
“The Commission determines:
1.That the Respondent pay the Applicant’s section 60 of the Workers Compensation Act 1987 expenses in the sum of $1548.00, together with any further reasonable and necessary expenses on production of accounts or receipts.
2.That the Respondent pay the Applicant weekly compensation at the rate of $1185.56 from 26/10/05 to 31/12/05 under s36 of the Workers Compensation Act 1987 with credit for any payments made.
3.That the Respondent to pay Applicant’s costs as agreed or assessed.
A brief statement is attached to this determination setting out the Commission’s reasons for the determination.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are:
(i) whether the Arbitrator erred with respect to her reasoning and findings concerning the Appellant’s defence raised pursuant to section 11A of the Workers Compensation Act 1987 (‘the 1987 Act’);
(ii) whether the Arbitrator erred with respect to her findings of fact concerning work performance, absence of documentation relating to informal coaching, feedback reports and performance assessments;
(iii) whether the Arbitrator erred with respect to her evaluation and acceptance of the Respondent’s evidence;
(iv) whether the Arbitrator erred in finding that the Respondent was incapacitated, such finding being founded upon the contents of medical certificates issued by Dr Song, and
(v) whether the Arbitrator erred in finding that the Respondent was incapacitated until 31 December 2005.
The matters summarised above have been taken from the Appellant’s Written Submissions furnished in support of its Application.
ON THE PAPERS REVIEW
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 Numbers 1 and 6, the documents that are before me, and the submission 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.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
The amount of compensation at issue on the appeal exceeds the sum of $5,000 and is at least 20% of the amount awarded in the decision appealed against and thereby the subject matter of the appeal meets the threshold requirements of section 352(2) of the 1998 Act which must be met before a grant of leave to appeal may be made by the Commission.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
The requirements of sections 352(2) and (4) having been satisfied and having regard to the subject matter of the appeal and the arguments raised I order that leave be granted to the Appellant to appeal to the Commission.
EVIDENCE AND SUBMISSIONS
The documentary evidence which was before the Arbitrator is noted at paragraph 21 of her Statement of Reasons (‘Reasons’) where it is recorded:-
“21. The following documents were in evidence before the Commission and taken into account in making this determination:
a. Application to Resolve a Dispute dated 26/2/08 and attached documents;
b. Reply dated 18/03/08 and attached documents;
c. Application to Admit Late documents filed by the respondent 2/04/08 and attached documents;
d. Application to Admit Late documents filed by the respondent 23/04/08 and attached documents;
e. Email print-outs filed by the Applicant at the Arbitration hearing.”
There is available before the Commission a transcript of proceedings which took place before the Arbitrator on 9 May 2008. That transcript records the oral evidence of the Respondent, Mr Chung Tong and Mr Dennis Lau. That transcript also records submissions made by Counsel then appearing on behalf of each of the parties.
There was a Statement of the Respondent dated 20 February 2006 attached to the ARD. It was there stated that at the commencement of her employment the Respondent had found that the Appellant’s general ledgers were “one year behind” and that bank reconciliation statements were “three months behind”. The Respondent worked overtime till 9.00pm or 10.00pm to update that material. The Respondent further stated that she was very happy in her work between May and September 2005 and that her performance had been reviewed in September at which time a salary increase was granted her. The Statement records that her immediate superior Mr Sheanoda had left the company in September and was replaced by Mr Lau. Up until that time the Respondent states she had received no complaint with respect to her work. The Respondent states that she and Mr Lau at first worked well together however as time passed Mr Lau’s attitude towards her appeared to change. It was the Respondent’s impression that he was making her work difficult. It was also the Respondent’s feeling that Mr Lau was trying to “get rid” of her. The Respondent records that she began to feel sick but continued to perform her duties as best she could. The Respondent’s Statement records a number of incidents where she was criticised by Mr Lau. The Respondent also states that she had been unjustifiably blamed for delays in the completion of work. A meeting took place between the Respondent, Mr Lau and Mr Chung Tong, the Appellant’s Group Accountant, which occurred on 23 September 2005. The Respondent states that during the course of that meeting changes were made to her “authority” and that she felt that her duties were being reduced to “process work”. The Respondent states that she was discomforted by statements made by both Mr Lau and Mr Tong which were made following the meeting. Those comments concerned her future prospects and the significance of “word of mouth” being conveyed to employment agencies. The Respondent became concerned about her job security and future career.
The Respondent’s Statement records that Mr Tong had approached Mr Sheanoda and requested that he make a statement concerning “negative performance” of the Respondent. It is stated that Mr Sheanoda could only tell the truth and that he had no problems with the Respondent and indeed was very satisfied with her work performance. The Respondent on 20 October 2005 approached a number of her superiors seeking assistance including advice from the Chief Financial Officer, Mr Frank Levin. The Respondent states that Mr Levin informed her that if two people were unhappy working together one needed to move on. The Respondent was significantly disturbed at this time and experienced stress, nightmares and vomiting. The Respondent consulted her Family Doctor and she received advice to take some time off work. She remained off work until 1 November 2005. The Respondent states that her “entire work file” had been deleted by Dennis in her absence. That file was restored by the Company Technician.
The Respondent’s Statement, it must be said, lacks particularity however it is clear from other evidence that she returned to work on 1 November 2005 but left the workplace early and returned the following day with a WorkCover Medical Certificate issued by Dr Song. On that day a meeting was held between the Respondent, Mr Levin and Mr Swanborough. The Respondent then ceased work.
Also attached to the Respondent’s ARD were a number of WorkCover NSW Medical Certificates issued by Dr Song. As noted above the diagnosis stated by Dr Song in those certificates was “stress, anxiety”.
A report of Dr Song dated 18 February 2006 was relied upon by the Respondent. That report records a consultation taking place on 21 October 2005 at which a history of “great tension” between the Respondent and her employer had occurred in the past week and that the Respondent had been “unfairly criticised and treated”. The Respondent’s symptoms were described in that report as being inability to sleep, constant nausea and poor concentration. Dr Song prescribed medication and issued a certificate of unfitness. Dr Song’s report details subsequent attendances, the fact that he had referred the Respondent to a Psychiatrist, Dr Teoh, and that a Clinical Psychologist had been appointed by the Workers Compensation Insurer to examine the Respondent.
Also attached to the ARD was a signed Statement by Mr Phillip Sheanoda. That Statement confirms that he was satisfied with the Respondent’s performance when he supervised her and further that she “works well and manages all her duties on time”. Mr Sheanoda confirms that he had been contacted by Mr Tong in mid October 2005 at which time he refused to provide Mr Tong with “a negative comment on her”.
A letter was in evidence dated 2 December 2005 addressed to the Respondent from the GIO, the Appellant’s Workers Compensation Insurer, which states that the Respondent’s claim was declined upon reliance of section 11A of the 1987 Act. It was stated by the Insurer that the decision to reject the claim was founded upon the opinion of Ms Collins (Psychologist) and a factual investigation.
At the hearing the Respondent gave oral evidence which confirmed and, to an extent, elaborated the material which was summarised in her Statement referred to above. The Respondent was cross-examined during the course of which it is recorded that she had started “looking for work on a fulltime basis” since at least 23 December 2005. The Respondent was challenged with respect to a range of factual matters however the transcript records the Respondent adhering essentially to the matters of fact summarised in her Statement. Unfortunately there was no clarification of events on and about 20 October 2005 given in this evidence.
The Respondent tendered at the hearing copies of email exchanges between herself and officers of the Appellant between 23 December 2005 and 9 January 2006. The subject matter of that correspondence concerned the Respondent’s wish to return to work on the basis of 2 days per week. Mr Levin advised the Respondent that the Appellant did not “have a 2 day per week role suitable for you”.
The documentary evidence relied upon by the Appellant included a report from Ms Emma Collins, Psychologist dated 22 November 2005. That report recorded relevant background and history obtained from the Respondent as well as notations concerning discussions Ms Collins had with Dr Song and notations concerning telephone interviews with Mr Duncan Swanborough and Mr Frank Levin. Attached to the report were copies of Statements from both Messrs Swanborough and Levin dated 17 November 2005.
It was Ms Collins’ opinion that the Respondent, having regard to her general presentation and information received from her treating Doctor, met the criteria for a diagnosis of Adjustment Disorder with Mixed Anxiety and Depressed Mood as detailed in the DSM – IV – TR. It was stated by Ms Collins in her summary of findings that the Respondent’s employer had commenced a performance management process and that it was suggested that she look for other work before she was formally disciplined for her poor work performance. It was Ms Collins’ view that the precipitating event appears to have been the “performance review meeting” on 20 October 2005 with the Chief Financial Officer (Mr Levin). Ms Collins observed that:
“This meeting was part of a reasonable performance management process as Ms Fu was counselled that continuing under performance would lead to further action and that she may wish to consider her position.”
The Appellant’s Reply had attached thereto a number of documents including correspondence relating to the Respondent’s claim as well as a copy of the Appellant’s Section 74 Notice dated 2 December 2005.
A report from All States Investigations and Corporate Protection Group, Licensed Private Enquiry Agents dated 22 November 2005 was attached to an Application to Admit Late Documents filed on 2 April 2008 and was admitted in evidence. That report had attached copies of Statements made by the Respondent, Mr Lau, Mr Tong and Mr Levin.
Attached to the Statement of Mr Lau were copies of documents which were described as being “samples of Rachel’s work” which required correction by Mr Lau. The relevant content of the various Statements is referred to hereunder.
Attached to an Application to Admit Late Documents filed on 23 April 2008 were a number of documents described as “file notes”. Those notes purported to record a discussion which occurred on 23 September 2005 between the Respondent, Mr Lau and Mr Tong. A document which purports to be a note concerning the Respondent’s performance made approximately 2 weeks after the last mentioned meeting in which it is recorded that the Respondent:
“… is highly incompetent to [sic] her role as an assistant accountant with CT Group.”
That document records a recommendation that:
“… we liaise with HR to give her official statement regarding her job not reaching CT’s standard and quality as soon as possible. Our bottom line is if she is not picking up the role in every [sic] 2 weeks HR will give her another warning that is leading up to her termination.”
In a typed unsigned file note which purports to be a record of exchanges between Mr Frank Levin and the Respondent which took place on 20 October 2005 it is there recorded that Mr Levin indicated that it was in the interests of the Respondent and the Company that she find employment elsewhere.
A further file note dated 21 October 2005 records various matters concerning communication with the Respondent as well as a notation that she did not attend for work on that day.
A file note which purports to record matters discussed with the Respondent on 2 November 2005 is also before the Commission. That meeting was between the Respondent, Mr Levin and Mr Swanborough. Mr Levin is recorded as advising the Respondent that the Company wished to “move forward” and an offer was made whereby she resign and that counselling with an external organisation be arranged. It was indicated that a reference would be provided when required. It is recorded that the Respondent responded by stating she was under extreme stress and that she wanted “someone to be responsible for her situation”. It is noted that the Respondent did not wish to take up the offer of career counselling and that she needed to discuss her situation with her husband and her lawyer. It is noted that Mr Swanborough summarised the “offer” following which Mr Levin “mentioned that CT wasn’t holding a gun to her head”.
Appellant’s Submissions
It was argued on behalf of the Appellant before the Arbitrator that, whilst there was evidence of injury, the Respondent’s case with respect to the “degree and length” of incapacity was deficient. The absence of any evidence from the Psychiatrist, Dr Teoh was highlighted in argument and (at transcript page 25) the form of Dr Song’s medical certificates was criticised given the notation of diagnosis being “stress, anxiety”.
The principal defence to the claim as noted by Counsel in the course of submissions before the Arbitrator was founded upon the provisions of section 11A of the 1987 Act. It was argued that the Appellant had, relevantly, been conducting a “performance appraisal”. The evidence was addressed generally and in argument the question was put “was the performance appraisal unreasonable?” (transcript page 68). It was later (transcript page 70) argued that:
“… the applicant has not made out her case that there was inappropriate behaviour on the part of the respondent.”
Submissions were put to the Arbitrator on behalf of the Appellant that the demeanour of the Respondent in the course of giving evidence, in particular refusal to answer questions, reflected unfavourably upon her credit.
On this appeal the Appellant has provided Written Submissions in support of the various grounds raised by way of challenge to the Arbitrator’s findings. With respect to Ground (a) it is argued that, having found injury occurring on 20 October 2005, the Arbitrator erred in assessing the question of reasonableness by taking into account events which occurred after that date. It is argued that if the section 11A defence is to fail the Arbitrator:
“… must find that the appellant employer’s actions were unreasonable prior to the onset of the applicant’s psychological injury.”
Ground (b) asserts error on the part of the Arbitrator concerning her conclusions that:
“… The respondent worker’s psychological injury was not wholly or predominantly caused by the reasonable action taken or proposed to be taken by or on behalf of the appellant employer with respect to performance appraisal pursuant to section 11A.” (2.2 (b) submissions)
The evidence relied upon by the Appellant was addressed generally in the course of Written Submissions and reliance is placed upon the decision of Irwin v Director General of School Education (NSW Compensation Court Geraghty J, 14068/97, 18 June 1988, unreported) (‘Irwin’).
With respect to Ground (c) it is argued that the Arbitrator’s findings of fact with respect to particular matters were unsupported by the evidence and that her reasoning reveals:
“contrary conclusions” concerning, in particular, her evaluation of Mr Tong’s evidence and that of the respondent.”
With respect to Ground (d) it is argued that the Arbitrator erred in her finding as to incapacity when reliance was placed upon the certificates of Dr Song. It is argued that those certificates did not comply with section 11A(7) of the 1987 Act. Reference is made to Burns v Gladesville Bowling and Sports Club Limited (2000) 20 NSW CCR 648 (‘Burns’) and it is argued that:
“… the finding of incapacity based on Dr Song’s WorkCover medical certificates should not stand.”
It is argued with respect to Ground (e) that the Arbitrator’s conclusion that the Respondent suffered incapacity up until 31 December 2005 was against the evidence, in particular the evidence of the Respondent herself.
With respect to what is stated to be Ground (f) it is argued that the Arbitrator has erred in relation to her determination as to the weight of the evidence of Dr Song concerning the question of duration of incapacity.
Respondent’s Submissions
The Respondent, concerning the issue of incapacity, argued before the Arbitrator that reliance should be placed upon the Applicant’s own evidence as to her ability to work. It was further argued that the Respondent’s “actions were not reasonable and … caused a depressive disorder”.
On this appeal the Respondent has provided Written Submissions in Reply to the Appellant’s Application. Each ground raised on behalf of the Appellant is dealt with in those submissions. It is argued that the Arbitrator’s conclusions were supported by the evidence, contained no error with respect to reasoning process, that there were no discrepancies or contradictions with respect to her findings of fact and that no error was demonstrated with respect to her conclusions as to the Respondent’s incapacity.
DISCUSSION AND FINDINGS
This appeal is brought pursuant to the provisions of section 352 of the 1998 Act. Subsection (5) of that section provides:
“(5) An appeal under this section is to be by way of review of the decision appealed against.”
The nature of the “review” stated in the aforementioned subsection was considered by the NSW Court of Appeal in Aluminium Louvres & Ceiling Pty Limited v Zheng [2006] NSWCA 34; 4 DDCR 358 (‘Zheng’) where the Court was there considering an appeal from a Deputy President of this Commission who had heard an appeal from an Arbitrator which involved arguments concerning suggested denial of procedural fairness. In his leading judgment Bryson JA (with whom Handley JA and Bell J agreed) said at [38]:
“38. A review is a different process to an appeal and the matters which may be considered and the manner in which they may be considered are somewhat wider. See Boston Clothing Co Pty Ltd v Margaronis (1992) 27 NSWLR 580 at 584 (Kirby P). An attack, on review or otherwise, on an Arbitrator’s discretionary decision in controlling procedure may be based on the test stated in House v R (1936) 55 CLR 499 at 504 ‑ 505; but that is not the only basis on which the Presidential member may act. The powers of a Presidential member on review are somewhat wider and extend to power to reopen consideration of a matter of which an Arbitrator has disposed; the manner in which the powers of the Presidential member are to be exercised is itself the subject of discretion of the Presidential member. ….”
The concept of “review” as it appears in the aforementioned subsection was again considered by the NSW Court of Appeal in State Transit Authority of NSW v Fritzi Chemler [2007] NSWCA 249 where, it was observed by Spigelman CJ (with whom Basten JA and Bryson AJA agreed) at [30]:
“30. A Presidential member exercising a power to review a decision must decide whether the original decision is wrong or, as it is often put in the context of administrative appeals on merits, must decide what is the true and correct view. If s/he does so decide then s/he should substitute his or her own views, unless it is an appropriate case to remit …”
The Grounds of Appeal enumerated by the Appellant challenge the Arbitrator’s findings with respect to two discrete matters, namely her reasoning process and conclusions with respect to the defence raised pursuant to section 11A of the 1987 Act, and her conclusions with respect to the question of the Respondent’s incapacity.
The Section 11A Defence
The Appellant relies upon the provisions of section 11A (1) which provides:
“11A No compensation for psychological injury caused by reasonable actions of employer
(1) No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was whole or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.”
The Appellant argues that, when dealing with the section 11A defence, the Arbitrator erred when considering the question of reasonableness by taking into account the Appellant’s actions “after the respondent worker had already suffered a psychological injury” (Ground (a)). The Appellant also challenges the Arbitrator’s findings as to reasonableness, it seems upon the basis that her conclusions were against the evidence and the weight of the evidence (Ground(b)).
The matter of construction and proper application of the provisions of section 11A(1) were considered by Deputy President Byron in Smyth v Charles Sturt University [2007] NSW WCCPD 184 (‘Smyth’). A summary of relevant authority and principles arising therefrom is to be found in the course of that decision between [46] and [49] where it was stated:
“46. The onus of proof in terms of “reasonable action” and other matters under section 11A of the 1987 Act falls upon the Employer (see Department of Education & Training v Jeffrey Sinclair [2004] NSWWCCPD 90, per President Justice Sheahan at [23]).
47. The question as to whether an employer’s actions are reasonable under the section is one of fact involving an objective test: it is not a matter of law (Commissioner of Police v Minahan [2003] NSWCA 239 (‘Minahan’). In Director General, Department of Education and Training v Pembroke [2006] NSWWCCPD 182, Acting Deputy President Handley said at [26]:
“In determining whether the conduct was reasonable, all relevant factors must be taken into consideration including the rights of both employee and the employer (Aristocrat Technologies Australia Pty Ltd v Rashov [2005] NSWWCCPD 66 [‘Raskov’], at paragraph 82). If the employer can establish that its conduct was reasonable, then the employee cannot recover compensation.”
48. Whether the Employer’s actions were reasonable or not, depends upon the intrinsic reasonableness of its actions, taking into account relevant matters pertaining to the employee and known to the employer (Minahan); see also Abdul-Rahman v Allied Pickfords Pty Ltd [2005] NSWWCCPD 107; Pirie v Franklins Limited (2001) 22 NSWCCR 346 (‘Pirie’)). The test of reasonableness of the relevant conduct is objective. “Whether the action is reasonable should be attended in all the circumstances by a question of fairness.” (Minahan). The term “reasonable action” therefore, should be given a broad construction (Dunn v Firth [2003] NSWCA 280).
49. Consideration should be given to the circumstances surrounding the “action”, to the extent that what occurred before and after the “action” may be taken as a guide to its reasonableness or otherwise, but is not necessarily determinative of it (Buxton v Bi-Lo Pty Ltd [1998] NSWCC 13; (1998) 16 NSWCCR 234 at 249; Melder v Ausbowl Pty Ltd (1997) 15 NSWCCR 454, at 458, and Pirie). Further, a psychological injury may arise out of a single “action” or a series of related steps in a process. Department of Education & Training v Sinclair [2005] NSWCA 465 was decided on the particular facts and circumstances of that case, where the whole or predominant cause of injury was the entirety of the disciplinary process. The whole of the process contained two specific blemishes identified by the Court of Appeal, however the Court said, in that case, what needed to be established was whether or not the whole process was reasonable, notwithstanding the blemishes. Spigelman CJ said, in these types of cases, “More often than not it will not be possible to isolate a single step.” However, he did not say or infer that it would never be possible to do so. The “whole or dominant cause” of the injury, can range from an isolated step, to a number of steps, up to an entire process, depending upon the facts and circumstances of the particular matter. Whatever the “whole or dominant cause”, in determining whether the conduct was reasonable, all relevant factors must be taken into account, including the rights of both parties (Raskov).”
I agree with the Appellant’s submission that the Arbitrator has concluded, as a matter of fact, that the Respondent “suffered a psychological injury as at 20 October 2005” (Submissions 2.3). I also agree that it is apparent that the Arbitrator has taken into account circumstances prevailing as between the parties after that date when determining the question of “reasonableness”. It is asserted that having approached the question of reasonableness with reference to facts and circumstances post dating the occurrence of injury the Arbitrator had erred in law.
It is apparent that the Arbitrator’s summary of events occurring on 20 October 2005 (at [47] of Reasons) is likely wrong. On that day a meeting instigated by the Respondent took place between herself and Mr Levin. The meeting referred to by the Arbitrator at [47] of Reasons took place, I find on the evidence, on 2 November 2005. My conclusion is based upon the Respondent’s own records which are in evidence. It is clear that the Respondent’s experience at the meeting with Mr Levin on 20 October 2005 led to her seeking medical treatment and caused initial absence from work. Such was the date of injury as found by the Arbitrator. Any confusion which may have occurred in stating Reasons for her decision was caused, no doubt, by the lack of particularity in the manner of presentation of the evidence and the somewhat ambiguous “statement” of Mr Swanborough which accompanied the report of Ms Collins.
This misconstruction of the evidence is of no significance on this appeal given that the matter of “injury” and the question as to whether the Appellant’s actions were with respect to performance appraisal are not in issue between the parties. Further , the Arbitrator at [67] of Reasons enumerated “elements of concern” that led her to conclude that she was not satisfied that the Respondent’s actions were reasonable. Those “elements” included, as stated at [67(f)]- “When she sought help from more senior staff she was told it was best for her to leave. No choice was offered.” I conclude that the Arbitrator was there referring to staff including Mr Levin, and there is an inference that the response of such staff was not reasonable. This is a conclusion with which I agree.
The Arbitrator’s factual findings with respect to relevant issues arising from proper application of section 11A were as follows:
“66. The respondent submits that Concrete Technologies was honest, and told Ms Fu it was better for her to look elsewhere, rather than be dismissed. However, there are sufficient elements of concern to me to conclude that I am not satisfied that the respondent’s actions were reasonable.
67. These concerns are:
a.Ms Fu worked well (and put in long hours) for her previous boss at Concrete Technologies. She received an appreciation email from the managing Director for her daily sales reports. Her probation was confirmed.
b.If Ms Fu’s work was not up to standard, why was her probation ended and she given a pay rise?
c.There is no written documentation of any of the informal coaching, feedback, reports to managers, unfavourable performance assessments, etc.
d.At the first clear meeting with Ms Fu to make her aware of her work performance problems, when she was given her first written memo outlining her new duties under Mr Lau, there was no plan for Ms Fu’s support or structure for how her performance was to be improved and measured over a set period.
e.Within 2 weeks Mr Lau wrote a review memo recommending her dismissal and told Ms Fu ‘maybe she look for another job as her skills were not suitable for us.’
f.When she sought help from more senior staff she was told it was best for her to leave. No choice was offered.
68. I find that it was not reasonable that the same month she was promoted Ms Fu was also given her first formal negative review, and shortly afterwards advised she had to leave.
69. The meeting when Ms Fu was told she had no choice but to go was the predominant cause of her psychological injury.
70. I accept that Ms Fu was told at the meeting on 20/10/05 that she would be given plenty of time and support to find other work, but in fact she was given neither.”
It is clear that the meeting referred to at [69] of Reasons was that which occurred on 20 October 2005 between the Respondent and Mr Levin.
It is my view that no error is demonstrated by the Arbitrator in her reasoning process when reference is made to circumstances existing after 20 October 2005. I am guided by the observations made by Byron DP in Smyth (in particular at [49]) together with the matters of principle raised in the authorities there discussed when considering this question. Whilst the “action” in terms of section 11A was that which occurred on 20 October 2005 it is my view that the Arbitrator was correct in taking into account surrounding circumstances, that is events occurring before and after that date, when determining the reasonableness of the actions of the Appellant on that day. In the circumstances I conclude that there has been no error of principle demonstrated by the Appellant with respect to the method of reasoning adopted by the Arbitrator as raised in Ground (a). Ground (b) challenges the Arbitrator’s factual finding with respect to the question of reasonableness as raised by section 11A. Whilst not stated explicitly it appears that this ground is founded upon a suggestion that the Arbitrator’s findings with respect to reasonableness were against the evidence and against the weight of the evidence.
The Arbitrator set forth in [67] of Reasons above quoted those matters, described by her as “elements of concern” which led her to conclude that she was not satisfied that the Respondent’s actions were reasonable. Whilst submissions put before the Arbitrator suggested that there may be some onus upon the Respondent with respect to matters relevant to a determination of the defence raised under section 11A it is clear on the authorities that the onus of proving the question of reasonableness is upon the employer. The matters enumerated in paragraph [67] are each factual conclusions which, in my view, were open to the Arbitrator upon the evidence before her. The question raised by the Arbitrator at [67b] was, in my view, one which was not adequately addressed by the evidence as presented by the Appellant. I respectfully agree with the Arbitrator’s conclusions of fact and the reasoning process demonstrated, particularly her consideration of matters of concern enumerated at [67]. A further matter of significance in determining the reasonableness of the Appellant’s actions which occurred on 20 October 2005 are the matters stated in evidence by Mr Phillip Sheanoda. That witness, the Respondent’s immediate superior, as stated by the Respondent up until September 2005, expressed his satisfaction with the her work performance and expressly declined a request to give “a negative comment” with respect to the Respondent’s work. Such evidence, if accepted, provides a guide as to the reasonableness of the action which occurred at the meeting with Mr Levin on 20 October 2005 (See Buxton v Bi-Lo Pty Ltd [1998]NSWCCR 13 at [92]).
The Arbitrator’s reasoning process reveals that she has addressed the matters of principle raised by the proper application of section 11A. A conclusion was reached by the Arbitrator that, by reason of “elements of concern” she was not satisfied that the Respondent’s actions were reasonable. Having so concluded the Arbitrator proceeded to determine that it was that unreasonable action which was the predominant cause of the Respondent’s psychological injury. The failure by the Appellant to establish reasonableness within the meaning of the section led inevitably to the Arbitrator’s conclusion that the defence raised pursuant to section 11A was not made out (Reasons [73]).
Ground (c) raised by the Appellant seeks to address a number of suggested “discrepancies” and “contrary findings” made by the Arbitrator in the course of her Reasons.
The first matter raised on behalf of the Appellant concerns the Arbitrator’s findings noted at paragraph 65 where it was accepted that the Respondent “had problems with her work …”. It is suggested that that finding conflicts with the question raised at paragraph [67] as to why, if her work was not up to standard was her probation ended and a pay rise awarded. The Arbitrator suggests at [65] of Reasons that the Respondent’s problems with work may be partly understandable having regard to the absence of written feedback, the language problems which existed between herself and Mr Lau and the Respondent’s past experience of entirely positive feedback. It was proven that the Respondent’s probation had ended and that she had been given a pay rise. It is my view that the Arbitrator, whilst acknowledging an absence of perfection in the Respondent’s work, was concerned with the apparent contradiction that probation had ceased and her income had risen. I am not satisfied that any relevant factual error has been demonstrated as is argued on behalf of the Appellant.
It is argued that the Arbitrator’s finding at [67c] is unsupported by the evidence. Whilst it is true that there exist a number of written documents relating to dealings between the Appellant and the Respondent dating from Mr Lau and Mr Tong’s meeting with the Respondent on 23 September 2005 it is clear that no written material was adduced on behalf of the Appellant with respect to the suggested coaching, reports and assessments predating that meeting. The evidence presented on behalf of the Appellant before the Arbitrator suggested a history of dissatisfaction with the Respondent’s work dating from May of 2005 and the occurrence of informal discussions and the like. It was the absence of any written record of such discussions which was the subject of the Arbitrator’s observation at [67c]. I do not accept the Appellant’s argument that the Arbitrator’s finding is unsupported by the evidence.
It is suggested in the submissions that the Arbitrator erred in that she made “contrary findings of fact” concerning the circumstances leading to the Respondent’s pay adjustment received at the end of her probationary period. The submissions relating to this matter appear at the foot of page 6 and onto page 7 of Submissions. An examination of those submissions do not reveal with precision the contradiction suggested. In my view the Arbitrator’s findings with respect to the granting of the pay increase or adjustment was consistent with the evidence and that the inferences drawn and the conclusions reached by the Arbitrator were in my view open to her on the totality of the evidence and, more particularly, there is no contradiction, as suggested, to be found in her reasoning process.
The Appellant challenges the Arbitrator’s conclusion with respect to incapacity insofar as it is based upon the contents of Dr Song’s medical certificates which were in evidence. The Appellant, correctly in my view, argues that having regard to the form of Dr Song’s certificates (in particular the manner in which diagnosis is expressed) they do not conform with the requirements of section 11A(7) of the 1987 Act. That subsection requires that such a certificate must:
“… use, for the purpose of describing the worker’s condition, accepted medical terminology and not only terminology such as ‘stress’ or ‘stress condition’.”
In the present case there is no issue between the parties as to the occurrence of an injury. The appropriate diagnosis of the Respondent’s condition is to be found in the evidence of Ms Collins as above noted at [32]. The requirements of the subsection have been enacted to regulate the process of making a claim in cases of psychological injury. No issue was raised with respect to the form of certificates when the Respondent made her claim. Nothing in the subsection or in any other part of section 11A goes to the question of the evidentiary weight of any such certificate.
It is argued in submissions that:
“… the finding of incapacity based on Dr Song’s WorkCover medical certificates should not stand.”
The certificates were in evidence and it was a question for the Arbitrator to assess the weight of such evidence. This she did, as indicated in the course of submissions on behalf of the Appellant, at [75] of Reasons where it was stated, in part:
“… there is no good evidence as to degree in length of incapacity. The WorkCover certificates submitted in this matter are not in the proper form, as a mere diagnosis of stress/anxiety is specifically ruled out in section 11A ss(7) of the 1987 Act.”
It is clear from the Arbitrator’s Reasons that her finding as to incapacity was not founded exclusively upon the evidence of Dr Song’s certificates. There was the evidence of the Respondent herself and the evidence of Ms Collins. It is my view that, notwithstanding the form of Dr Song’s certificates, there was sufficient evidence before the Arbitrator to enable a conclusion that a period of incapacity followed the subject injury. It is clear that the Arbitrator has placed little, if any, reliance upon the certificates of Dr Song. The question concerning the Arbitrator’s finding as to duration of incapacity is addressed hereunder.
The Appellant in Ground (d) challenges the Arbitrator’s finding that the Respondent suffered incapacity up until 31 December 2005. The Appellant argues that the Respondent herself agreed in evidence that she was looking for fulltime employment “since at least 23 December 2005”. That suggestion was agreed to by the Appellant (transcript page 44, line 40). As above noted it is apparent that the Arbitrator has placed considerable weight upon the evidence of the Respondent herself with respect to the question of incapacity and its duration and in those circumstances I am persuaded that, having regard to the Respondent’s self assessment of capacity implied by her seeking fulltime employment as at 23 December 2005, the correct conclusion to be reached with respect to the probable duration of incapacity is that it persisted until 22 December 2005. In that regard I conclude that the Arbitrator has erred and that the decision as to period of incapacity requires revocation. In the circumstances it is unnecessary to consider the matters raised by the Appellants in Grounds (e) and (f).
It may be seen that, with the exception of my determination with respect to the period of incapacity suffered by the Respondent, the submissions of the Appellant have been rejected. In the circumstances it is, in my view, appropriate to revoke the relevant portion of the Arbitrator’s decision concerning the period of incapacity and a new decision be made in its place. Otherwise the Arbitrator’s Determination is confirmed.
DECISION
Paragraphs 1 and 3 of the Determination of the Arbitrator dated 28 May 2008 are confirmed, paragraph 2 is revoked and the following order is made in its place:
“2. That the Respondent pay the Applicant weekly compensation at the rate of $1185.56 from 26 October 2005 to 22 December 2005 pursuant to section 36 of the Workers Compensation Act 1987, the Respondent to have credit for any payments made.”
COSTS
Given the circumstance that the appeal has led to a minor variation of the weekly award entered by the Arbitrator but has otherwise been unsuccessful the Appellant is to pay the Respondent’s costs of this appeal.
KEVIN O’GRADY
Acting Deputy President 7 November 2008
I, TUYET WALLIS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF KEVIN O’GRADY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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