Department of Education & Training v Jeffrey Sinclair
[2004] NSWWCCPD 90
•16 December 2004
WORKERS COMPENSATION COMMISSION DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR STATUS: Remitted on Appeal: This decision has been the subject of a remitter from the Court of Appeal: see Department of Education & Training v Sinclair [2005] NSWCA 465; (2007) 4 DDCR 206 and Department of Education & Training v Sinclair No.2 [2006] NSWWCCPD 163. CITATION: Department of Education & Training v Jeffrey Sinclair [2004] NSWWCCPD 90 APPELLANT: Department of Education & Training RESPONDENT: Jeffrey Sinclair INSURER: GIO Treasury Managed Fund Workers Compensation FILE NUMBER: 18512-03 DATE OF ARBITRATOR’S DECISION: 22 March 2004 DATE OF APPEAL DECISION: 16 December 2004 SUBJECT MATTER OF DECISION: S4, Injury in the course of employment; s9A, “Substantial Contribution Factor:; s11A, Reasonable action with respect to discipline; s14, “Solely attributable to serious and wilful misconduct”; credit; bias; natural justice; weekly compensation; partial incapacity. PRESIDENTIAL MEMBER: President Justice Terry Sheahan HEARING: 3 November 2004 REPRESENTATION: Appellant: Ms A Katzmann SC with Mr D Saul, Barrister Solicitors: Hunt & Hunt Lawyers Respondent: Mr M Joseph SC with Mr J Trainor, Barrister Solicitors: R L Whyburn & Associates ORDERS MADE ON APPEAL: The Department’s appeal is dismissed. The Arbitrator’s decision is in favour of Jeffrey Sinclair and paragraphs 4, 5 and 6 of the Commission’s Determination of 22 March 2004 are confirmed, but the parties are to confer upon, and file with the Registrar within 28 days of the date of this decision, appropriate draft orders specifying the correct amounts of Mr Sinclair’s specific statutory entitlements for all components of the period 15 August 2003 to date and continuing, in accordance with these Reasons. .
INTRODUCTION
1.The Department of Education & Training has appealed against a determination made by a Commission Arbitrator in favour of a former employee of the Department, Jeffrey Lewis Sinclair.
2.Mr Sinclair claims an ongoing partial incapacity for work as a result of a psychological injury that he claims arose out of, and in the course of, that employment.
3.He argues that the connection with his employment is that the injury flowed from the investigation of allegations, and the making of charges, by the Department, that Mr Sinclair’s personal association with one of his students at Baulkham Hills High School (eventually identified to him to be Nicola Shackle, known as “Nicki”) was close and improper, and may have been sexual in nature.
4.Mr Sinclair lodged a workers compensation claim for weekly benefits and medical expenses when he notified the Department in November 2001 that he had suffered a psychological injury as a result of the Department’s actions. The Department accepted the claim, and paid benefits to and in respect of Mr Sinclair for almost two years.
5.Mr Sinclair was dismissed by the Department on 15 August 2003, and the payment of workers compensation benefits ceased on 2 September 2003.
6.On 21 November 2003, he lodged with the Commission an “Application to Resolve a Dispute” seeking a continuation of his entitlements. The date of injury was specified as “23 February 2001 to August 2003”, and the injury was described as “psychological injury”.
7.The Department in its Reply of 17 December 2003 listed the following “issues in dispute”:
·“Employment was not a substantial contributing factor to the injury. [s 9A(1) of the 1987 Act].
·The Respondent relies on Section 11A [of the 1987 Act, headed “No compensation for psychological injury caused by reasonable actions of the employer”].
·That if the Applicant received the injury alleged, such injury was due to the Applicant’s serious and wilful misconduct (Section 14 [of the 1987 Act]).
·Any incapacity the Applicant suffers is unrelated to the Applicant’s employment with the Respondent.
·The Applicant is fit to resume normal pre-injury duties.”
8.The dispute came before the Commission Arbitrator, first in a teleconference on 16 February 2004, and then at a conciliation and arbitration hearing on 15 March 2004.
9.The Department declined to negotiate any possible resolution of the dispute. The Arbitrator proceeded to hear oral evidence and submissions and make a determination, essentially in favour of Mr Sinclair. He published his detailed Reasons, on 22 March 2004, and made various orders for the payment of compensation, expenses and costs.
10.The Department’s appeal against that decision by the Arbitrator, on wide-ranging grounds, was lodged with the Commission on 16 April 2004.
11.As the “threshold” requirements in s 352 of the Workplace Injury Management and Workers Compensation Act 1998 are clearly satisfied in this case, I granted leave to appeal on 7 October 2004, and held a hearing on 3 November 2004, at which both parties were represented by Senior Counsel.
12.Apart from the oral submissions made at that appeal hearing (the transcript of which I have referenced with “P”), I have also had the benefit of voluminous and comprehensive written submissions, together with all the documents which were before the Arbitrator, and a transcript of the arbitral hearing (referenced with “T”). That transcript runs to 100 traditional pages, of which almost exactly half is occupied by searching cross-examination of Mr Sinclair by counsel for the Department. (It appears from T87 that the Department’s counsel put to the Arbitrator a written outline of submissions, as distinct from the written submissions made to the Department on Mr Sinclair’s behalf, but I note that those outline submissions are not among the papers before me).
13.As the parties are agreed on the nature of appeal proceedings in this Commission (P9) – Mayne Health Group v Sandford [2002] NSW WCC PD6; McMahon v Lagana & Anor [2003] NSW WCC PD22, Cakir v Western Sydney Area Health Service [2004] NSW WCC PD1 – there is no need for me to spell out such matters out in detail.
14.I have decided to dismiss the Department’s appeal, but to direct that the parties file, within 28 days, draft orders as to the amounts of Mr Sinclair’s specific statutory entitlements, in accordance with the Reasons which follow.
15.Because the Department pressed all 16 grounds of appeal as filed, it is necessary for me to set out, in more detail than usual, the evidence as to the relevant facts of the matter, drawn from all the evidentiary material before the Arbitrator and myself, elucidated as it was by cross-examination. Before I do so, however, I will set out some relevant statutory provisions.
THE RELEVANT STATUTORY PROVISIONS
16.The Workers Compensation Act 1987 and the Workplace Injury Management and Workers Compensation At 1998 contain the relevant statutory provisions.
17.“Injury” is defined in s 4 of the 1987 Act in the following terms:
“injury:
(a)means personal injury arising out of or in the course of employment,
(b)includes:
(i) a disease which is contracted by a worker in the course of employment and to which the employment was a contributing factor, and
(ii) the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to the aggravation, acceleration, exacerbation or deterioration, and
(c)… (Dust Diseases)”.
(This case was run as an “injury” rather than a “disease” case).
18.Section 9 of the 1987 Act establishes the primary entitlement of workers to receive compensation from employers.
19. Section 9A(1) of the 1987 Act provides:
“No compensation is payable under this Act in respect of an injury unless the employment concerned was a substantial contributing factor to the injury”.
20.Section 9A(2) sets out examples of matters to be taken into account in answering this question. It envisages that injuries may be linked to the worker’s state of health, the existence of hereditary risks, and so on. It contemplates the inevitability that an injury, or some similar injury, might have occurred at about the same stage in a worker’s life whether or not the worker was engaged in that employment. Section 9A(2)(f) deals with “the worker’s lifestyle and his or her activities outside the workplace”.
21.Section 9A(3) provides that employment is not to be regarded as a substantial contributing factor merely because of either or both of (a) connection of the injury to the employment, and/or (b) the simple fact of incapacity, loss, need for treatment, etc., as a result of the injury.
22.Section 11A of the 1987 Act is important to this case. It is headed “No compensation for psychological injury caused by reasonable actions of employer”, and its provisions include:
“(1) 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, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.
and
(6)This section does not extend the definition of injury in section 4. In particular, this section does not affect the requirement in section 4 that a disease is not an injury unless it is contracted by the worker in the course of employment.
This section does not affect section 9A (No compensation payable unless employment substantial contributing factor to injury).”
23.The onus is on the worker to satisfy the requirements of s 9A, but on the employer to prove “reasonable action” and other matters under s 11A.
24.The Respondent specifically relies also on s 14 of the 1987 Act, which is headed “Conduct of Worker etc”, and makes the following provisions:
“ (1)Compensation is payable in respect of any injury resulting in the death or serious and permanent disablement of a worker, notwithstanding that the worker was, at the time when the injury was received:
(a)acting in contravention of any statutory or other regulation applicable to the worker's employment, or of any orders given by or on behalf of the employer, or
(b)acting without instructions from the worker's employer,
if the act was done by the worker for the purposes of and in connection with the employer's trade or business.
(2)If it is proved that an injury to a worker is solely attributable to the serious and wilful misconduct of the worker, compensation is not payable in respect of that injury, unless the injury results in death or serious and permanent disablement.
(3)Compensation is not payable in respect of any injury to or death of a worker caused by an intentional self‑inflicted injury.”
25.Again in s 14(2) the onus falls on the employer to prove “solely”, “serious”, “ wilful” and “misconduct”.
26.Division 2 of Part 3 of the 1987 Act deals with the compensation entitlements in the nature of income support for workers totally or partially incapacitated (see, especially, ss 35, 38, 38A, and 40), and Division 3 of that Part with compensation for medical, hospital and rehabilitation expenses (see, especially, s 60). I will return to some of these provisions later.
27.The proceedings before the Arbitrator, and the appeal before me, are regulated by the 1998 Act (see especially ss 354-60, and ss 352-3, respectively). Section 355 makes clear that, prior to proceeding to determine a dispute, the Arbitrator to whom the Registrar allocates it is to first use his or her “best endeavours to bring the parties to the dispute to a settlement acceptable to all of them”, and, further, that no objection can be taken to the same Arbitrator proceeding to a determination of the matter on the grounds of his or her having used such “best endeavours”. The Commission has promulgated a comprehensive Guideline that informs parties and their representatives of what to expect an Arbitrator will do in both aspects of his or her task.
28.Section 294(2) of the 1998 Act requires the Arbitrator, in the event of making a determination, to provide a “brief statement” of “reasons”. Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 clarifies that “lengthy or elaborate” reasons, finding and linking every fact leading to the final conclusion, are not required, but “the essential … grounds upon which the decision rests must be articulated” (per McHugh JA, at 280D, but see also the judgment of Kirby P, generally, and that of Mahoney JA, at 271-3). See also Rule 73.
29.Again, because of the very wide ambit of the Department’s challenges, in this Appeal, to the Arbitrator’s decision and reasons, I will, in due course, set out more than the usual detail of the arbitration hearing, and a greater than usual proportion of the content of his Reasons, so that the thrust of his reasoning is apparent to those reading this judgment reviewing it. First, however, I will deal with the factual and medical evidence.
THE FACTUAL EVIDENCE
30.Mr Sinclair was born on 2 June 1951, and Ms Shackle on 11 November 1984. Mr Sinclair has been married twice and fathered three children. He qualified BA DipEd at Sydney University, and was employed by the Department from about 1975 as an English Teacher. Ms Shackle is the eldest of three children of Steve and Judy Shackle of Cherrybrook.
31.On 12 April 1996 Mr Sinclair’s then 12 year old son Julian died, apparently as a consequence of a failed heart transplant. He and Julian’s mother (Mrs Sabina Sinclair) took this death very hard. Whereas Mr Sinclair continued working, apart from some long service leave in 1998-99, Mrs Sinclair apparently did not return to work for some time, and even undertook some study of grief counselling (T3). Indeed, there is some evidence that she assisted at least one other student affected by the death of a friend.
32.In 1997 Mr Sinclair took up what he regarded as a “prestigious” appointment, as Head of English at Baulkham Hills High School, a “selective” high school, described in the evidence as a “high profile school in a conservative community”. Several of Julian’s friends and classmates attended the school while Mr Sinclair was a teacher there, and they were in his Year 12 classes in 2001.
33.In 1999, Ms Shackle’s creative writing talents came to Mr Sinclair’s notice when he was judging a school writing competition. She was a student in Year 9 at his school, and submitted what he found to be a touching story about the death of her maternal grandfather (apparently when she was in Year 5). She introduced herself to him in November 1999, and became a member of his Year 10 English class in 2000.
34.Mr and Mrs Sinclair gradually developed a personal association with Ms Shackle outside the school environment. Mrs Sinclair had helped her husband choose Nicki’s story as the winner of the writing competition. Nicki appeared to them to be having some problems in her relationship with her parents, and both tried to be of help to her. The Shackles seemed to approve of Nicki’s association with the Sinclairs until they complained to the school about it, first in mid 2000, and then in February 2001.
35.Mr and Mrs Shackle contacted the school counsellor about the relationship between their eldest daughter and Mr Sinclair in May 2000, after Mrs Shackle had secretly read Nicki’s diary, in which Mr Sinclair was mentioned “numerous” times. It is also noted by the Department’s witnesses that Mrs Shackle told them she searched Nicki’s wardrobe for computer disks, and accused Nicki, in about June 2000, of “having an affair”, but no official Departmental action resulted from the mid 2000 complaint.
36.Mr and Mrs Shackle appear to have been reassured about Nicki’s relationship with Mr Sinclair, after that mid 2000 contact with the school, because they were in contact with him and the school for assistance after Nicki apparently “cut” her wrist in late November 2000, and persisted in threatening to leave home. Department of Community Services (DOCS) also became involved, at the instigation of teachers at the school (other than Mr Sinclair), in early 2001, and the Head Teacher Welfare suggested arranging alternative housing for her.
37.However, on 10 February 2001, Mrs Shackle found a series of emails Nicki appeared to have sent to an unidentified person between 27 October 2000 and 29 January 2001. Mrs Shackle suspected Nicki had sent them to Mr Sinclair. Mr Sinclair testified that he was overseas from about 20 December 2000 until about 19 or 20 January 2001.
38.The Shackles saw the Principal of the school, Mr Fugaccia, on 12 February 2001. (Nicki apparently then made a “tearful” phone call to another teacher, Ms Kennedy, on the night of 14 February 2001). The information Mr & Mrs Shackle provided about Nicki, and their allegations against Mr Sinclair, were referred to the Department’s Child Protection Investigation Unit (“CPID”), and Ms Jill Carlon commenced an official investigation on behalf of the Department. (Ms Carlon was replaced as investigator by Mr John Malins but was again directly involved in the case from June 2001 until August 2003 as Chief Investigator, and Mr Malins’ supervisor).
39.A departmental investigation was also commenced into an incident in which Ms Shackle had possibly been touched improperly by a teacher when she was in Year 5. She told her parents of that incident only in August 2000, and it was also notified to the Unit by another person, close to the Shackles, on 8 February 2001. Mr Sinclair was told of the incident by Mrs Shackle, shortly after she herself was told, in mid August 2000. Ms Shackle’s grandfather apparently passed away a few months after this Year 5 incident.
40.The Department has documented protocols in place for such matters, and the Commission has before it a “manual” dated 10 March 1997 entitled “Child Protection: Procedures to be Followed in Response to Allegations of Improper Conduct of a Sexual Nature by a Staff Member against a Student” (97/018 (S.017)).
41.This procedures document adopts a wide definition of “improper conduct” of a sexual nature. It obviously includes sexual intercourse, and various forms of child sexual abuse, but also covers inappropriate conversation, obscene language, suggestive remarks or actions, jokes, inappropriate touching, exhibitionism, “personal correspondence with students in respect of the teacher’s or other staff member’s sexual feelings for the student”, and “deliberate exposure of students to sexual behaviour of others, other than in the case of prescribed curriculum material in which sexual themes are contextual”.
42.The relevant statutory provision is s 83 of the Teaching Services Act 1980, which provides:
“Breaches of discipline
An officer or temporary employee of a Teaching Service who:
a.commits any breach of this Act or the regulations,
b.engages in any misconduct,
c.uses intoxicating beverages or drugs to excess,
d.wilfully disobeys, or wilfully disregards, any lawful order made or given by a person having authority to make or give the order,
e.is negligent, careless, inefficient or incompetent in the discharge of his or her duties, or
f.engages in any disgraceful or improper conduct,
is guilty of a breach of discipline.”
43.Ms Carlon held taped interviews with Mr & Mrs Shackle, and with Nicki Shackle, on 15 February 2001 and took delivery of some hard copy emails. Various other inquiries were undertaken and an “Initial Investigation Plan” was formulated. In that “plan” Ms Carlon:
(i)noted that Mr and Mrs Shackle had discussed their concerns with a principal at another school, who was married to one of Mr Sinclair’s colleagues at Baulkham Hills High School, and
(ii)commented that Mr Sinclair’s “professional reputation may be permanently damaged if he is removed from the school if the allegations are unsubstantiated”.
44.The investigation “plan” was submitted to Pat Egan, the Acting Chief Inspector of the CPID, with the following “Recommendation”:
“That consideration is given to notifying Mr Sinclair of the investigation and the specific nature of the allegations.
That consideration is given to having Mr Sinclair remain on normal duties at this stage pending further information about the e-mail correspondence being available.
That consideration is given to providing the principal with specific advice regarding risk management at the time of delivery of the letter to Mr Sinclair notifying him of the investigation.”
45.Mr/Ms Egan wrote on the plan:
“The assessment of risk is particularly of concern. It would seem that Mr Sinclair’s presence at the school is not likely to pose an increased risk – in fact, his removal may cause Nicki to pursue some inappropriate course. Risk assessment should be conducted on a continuing basis and further consideration given to removal of Mr Sinclair from the school as information comes available. The principal should be asked to provide appropriate advice/direction to Mr Sinclair when he receives his letter of notification.”
46.Mr/Ms Egan then sent a private and confidential letter to Mr Sinclair, dated 21 February 2001, delivered to him at the school, which included the following remarks:
“… an allegation has been made that you engaged in conduct which could amount to improper conduct against a student. In particular, it has been alleged that you developed a close personal relationship with a student.
Mr John Malins, Acting Principal Investigator, who will contact you, will investigate the allegation. While this investigation is proceeding, you are to take no action, which would hinder its progress, including contacting any student currently enrolled at Baulkham Hills High School by telephone, letter or card, by e-mail or through an intermediary. Your conduct must be professional and in keeping with your position and status as head teacher.
Until the matter is finalised by the Child Protection Investigation Unit, applications for promotion, transfer, long service leave, leave without pay, separation from the department, participation in a teacher exchange and/or the issue of a record of employment generally will not be approved.”
47.The letter went on to point out that the investigation would be conducted consistent with the departmental policy document 97/018, and advised that the Principal of the school has been asked to hand the letter to him and “provide you with appropriate support and advice”. The availability of counselling support under the Department’s Employee Assistance Programme (“EAP”) and other options for support and counselling were outlined. In the last paragraph of the letter Mr Sinclair was invited to contact Mr Malins if he required any further information, or wished to arrange to be interviewed.
48.On Friday 23 February 2001 Ms Shackle left home, and began living in “share” accommodation at Castle Hill and Baulkham Hills, but Mr Sinclair maintains that that action on her part “has absolutely nothing to do with me; the conflict between Nicki and her mother has a long history”. At all relevant times Nicki appears to have had a boyfriend (“Brett”) some 3 years older than herself, and already at University. Her parents were very restrictive of her dealings with him and that caused conflict both with the parents and with Brett. In his oral evidence (T17) Mr Sinclair specifically denied that her leaving home was related to his receipt of the Departmental letter.
49.Over the weekend 24-25 February 2001, Mr & Mrs Shackle discovered further “suspicious” emails, which Mr Shackle downloaded on to a disk, and Mrs Shackle contacted Mr Malins regarding them on Monday 26 February 2001. Mr Shackle emailed something to the then Minister for Education the same day. Many of the relevant emails were written under the pseudonym “Charles Sarah”. According to Ms Carlon, they were sent from [email protected] to [email protected], and their existence and content were regarded as central to the Department’s investigation. (Ms Carlon notes a similarity to characters in the popular novel “The French Lieutenant’s Woman”, which deals with an unconventional love affair).
50.On Monday 26 February 2001, the Investigation Unit reconsidered the risk factors involving Nicki Shackle, and it was decided to transfer Mr Sinclair to alternative duties. The subsequent private and confidential letter from Val Macaulay, the Director of the Unit, again delivered to Mr Sinclair at the school, dated 26 February 2001, included the following remarks:
“…following consultation with your District Superintendent Mr Robert Manwarring, I have determined that you should be placed on alternative duties while the investigation is carried out. Consequently, I am directing you to alternative duties at Parramatta District Office under the supervision of Mr Manwarring, District Superintendent, as from Tuesday 27 February 2001… You will remain on alternative duties until advised otherwise. You will work school hours and conditions on your current salary.
I have asked Mr Manwarring to arrange for you to receive this letter and to provide you with support via the Staff Welfare Officer.
During the period of the investigation, your conduct must be professional and in keeping with your position and status as an employee of the Department of Training & Education (sic). You are to take no action which would hinder the progress of the investigation. This includes not visiting or meeting any student of Baulkham Hills High School face to face, not contacting any student by telephone, letter or card, through an intermediary or via any computer based system, including e-mail”.
51.The letter went on to again draw Mr Sinclair’s attention to various support systems available by way of counselling, and the like.
52.On receipt of that letter Mr Sinclair took no further classes at the school and reported for duty at the Parramatta District Office. He “missed school terribly”, and remained very concerned about his classes and his responsibilities as “Head of the Faculty”. He tried to give some direction to the English Department “by remote control” from the Parramatta Office when he thought he would soon be returning to duty at the school (see T7-8). He “held on” at work in the Parramatta Office until the end of the 2001 school year (T65).
53.Ms Carlon’s statement includes a chronological schedule detailing what occurred during the investigation following Mr Sinclair’s redeployment to Parramatta. It is noted, inter alia, that the investigation was suspended at the request of police from 12 April 2001 till 14 June 2001. The police decided to take no action, and the media reported that DOCS also decided, after inquiry, not to intervene in the matter. Mr Malins wrote to Mr Sinclair on 25 May 2001 detailing sources of support, but indicating that it was not possible to predict precisely how long an investigation might take.
54.Although Mr Sinclair made occasional enquiries of the Department, he had no further official communication from the Department regarding the investigation until Ms Carlon wrote to him at some length on 8 November 2001, detailing the Department’s allegations against him. The Department’s Jane Thorpe defends the “enormous forensic work” involved in the investigation between February and November 2001 as necessary for the “complex and serious allegations” to be put to Mr Sinclair, for his response, “in a fair and direct way”.
55.Sometime during 2001 Mr Sinclair’s father died. The date of that unfortunate event is not clear from the evidence, but on 25 or 27 July 2001 Mr Sinclair felt so depressed that he commenced a series of counselling sessions with an EAP counsellor, Fran Fagan. In early September 2001 Ms Fagan recommended Mr Sinclair see his general practitioner (Dr Pendel) to obtain a prescription for anti-depressants. Mr Sinclair says that by the time he received Ms Carlon’s lengthy letter of 8 November 2001 he was “having regular medical and psychological treatment, was diagnosed as clinically depressed, and regarded as ‘at risk’ of ‘self-harm’.”
56.That letter of 8 November 2001 detailed a series of allegations that the Department claim “evidenced” the development and maintenance, by him, during 2000 and 2001, of “an improper personal relationship, including a sexual relationship” with Nicola Shackle. Extensive particulars were given of the “evidence” relied on, including alleged meetings, other shared events, visits by Mr Sinclair to Ms Shackle’s workplace, numerous telephone calls, the giving of gifts (including, allegedly, a silver “engagement” ring on her 16th birthday, 11 November 2000), internet contact, and so on.
57.It was further alleged that Mr Sinclair “knowingly breached” the direction given in Val Macaulay’s letter of 26 February 2001 that he was to “take no action which would hinder the progress of the investigation” and, in particular, not visit, meet or contact any student of Baulkham Hills High School. The particulars of that allegation were given as a series of telephone discussions with Ms Shackle between March and August 2001, but he appears not to have seen her in person between February and April or May 2001 (see T55), even though Mrs Sinclair may have.
58.Mr Sinclair was invited to respond to these allegations either in writing, or orally, to Mr Malins. It was indicated that pending his response “further investigation may be undertaken into this matter”.
59.On 14 November 2001, Mr Sinclair notified his “injury” and applied for workers compensation benefits. He commenced a series of consultations with psychologist Vicki Garner on 30 January 2002. He worked full-time during school year 2001, at least until 14 November 2001, but did not resume work following the Christmas 2001 school holidays on 1 February 2002 (see T12), and on 21 February 2002 he formally relinquished his post as Head of English at Baulkham Hills High School, “in view of my long absence from school and the fact that a date of return remains uncertain”. He was frequently consulting his general practitioner Dr Pendel for “depression” at that stage. He also commenced a rehabilitation programme in early 2002 with CRS Australia, and began writing a book about Julian. Dr Pendel eventually referred him to see a psychiatrist, Dr Teoh. Mr Sinclair says he first consulted Dr Teoh on 7 May 2002, but Dr Teoh appears not to have seen him until August 2002. The Department’s workers compensation insurer (GIO Treasury Managed Fund - “TMF”) had agreed, in a letter dated 4 March 2002, to pay Mr Sinclair weekly benefits and treatment expenses.
60.Sabina Sinclair went overseas in February 2002, and did not return until 17 July 2002. During that time Mr Sinclair allowed Ms Shackle to use the Sinclair home to eat, wash, iron, study and occasionally sleep “away from the cramped and noisy environment of her own accommodation”. He occasionally let her use his car. When Sabina Sinclair returned home, she and Mr Sinclair formally separated, and he moved to his sister’s home soon afterwards. Mr Sinclair claims that Ms Shackle “continued living at Baulkham Hills … until after she completed her schooling” (see pars 54-58 of his statement dated 12 June 2003). Mr Sinclair’s evidence is that the breakdown of his marriage to Sabina was “traumatic”, but had occurred over a period of time as a result of a number of factors, including the way they coped with Julian’s death, but not including any aspect of his “relationship with Nicki” (see T65-66).
61.Mr Sinclair responded formally to the allegations letter of 8 November 2001 on 22 February 2002. Essentially, he admitted to a close personal association with Ms Shackle beyond that normally found between teacher and student, but based on “mutual respect” and his being “increasingly concerned for her well-being and welfare both before and after she left home in February 2001”. Mr & Mrs Sinclair paid some rent for Nicki, and gave her some food, “about a month after I had been removed from the school and instructed not to make contact”.
62.He has consistently denied any impropriety, intimacy or sexual relationship during the relevant period, and has rejected the allegation that any of his behaviour was “directed at developing and maintaining [a] personal and intimate relationship”. It is common ground that they began living together in due course, but Mr Sinclair’s case is that this occurred only after Ms Shackle completed her HSC at the end of November 2002 (T44). The position he put, in his response of 22 February 2002, and has maintained, is that he tried to be supportive of Nicki Shackle in her personal life, and to foster her special ability in English and writing. As a result he had conversations with her outside of normal lesson times, but “did this in her best educational interests”. He claims to have been, at all times, “an English teacher trying to assist a very talented writer to develop her skills …”. He was “determined that she complete her High School studies, and in an environment where she could perform to her ability”.
63.The Department obviously sent Mr Sinclair a package of “tabbed “ material, to which reference is made in the particulars provided in the letter of 8 November 2001. Several tabbed items were emails and at p 9 of his letter in response Mr Sinclair said: “Nicki e-mailed us occasionally during this period and we usually responded. In over half of these instances it was Sabina who responded”. He insists there was nothing in any way improper or sexual about this correspondence. “The only e-mail in the package that was written by me is the first one at TAB 5, dated 25 October”. He went on to say: “It would be best to ask Nicki herself about the origin of the other e-mails. The only light I can shed on the matter is that she told me that she had begun writing an epistolary (in the form of letters) novel, using the modern hypertext form of e-mail. She had created two characters who wrote e-mails to each other. Clearly, some of the details referred to are borrowed from reality. Equally clearly, some of the things referred to can’t be real. It is very common for fiction works to include details from reality”. Later on in that specific response (p 9) he again denied writing “these e-mails”. Nicki Shackle told the Department’s investigators that they were part of “a postmodern novel [Mr] Sinclair was helping her compose in his role as mentor for her creative writing, [and] that she had written most of the emails that appeared to have been written by him”, and Ms Carlon found them “inconclusive as to the real nature of [their] relationship” (Carlon statement par 9). Ms Shackle conceded that Mr Sinclair (i) had passwords for the email accounts because she wanted him, as her mentor, to be able to access her writings, and (ii) had written some emails, in character, for her, from Paris (T26). The Department in its November 2001 report of its investigation was understandably suspicious of this evidence.
64.The “supporting” material assembled by the Department, was not put in as evidence before the Arbitrator and so is not before me. During the cross-examination (see T26-39), counsel for the Department put a series of questions to Mr Sinclair about one particular email, apparently dated 17 January 2001 (while Mr Sinclair was overseas), which Mr Sinclair persistently and emphatically denied was sent to Nicki by him. It was shown to the Arbitrator, but no attempt was made to get it into evidence before him, and I refused leave, at the hearing of the appeal, for it to be put in as evidence before me (see P1-8).
65.Jane Thorpe indicated in her statement that the assessment of all the material available to the CPID was completed by 29 May 2002, but I note that that work did not culminate in any charges until 12 August 2002, when Carolyn Wells, then Acting Director of the CPID, sent Mr Sinclair a “Notice of Charges”, charging him with breaches of discipline within the meanings of both ss (f) and (d) of s 83 of the Teaching Services Act 1980 (see par 42 above).
66.In terms of the s 83(f) charge that he “engaged in improper conduct” the following particulars were provided:
“(A)During 2000, 2001, and 2002, developed and maintained an improper personal relationship, including a (sic) intimate relationship, with a Year 10 (2000), Year 11 (2001) and Year 12 (2002) female student of Baulkham Hills High School (namely Nicola Shackle, known as Nicki Shackle), in that you engaged in conduct that was directed at developing and maintaining the personal and intimate relationship, including:
(i)Socialising with the female student;
(ii)Communicating with the female student by use of telephone, mobile telephone and e-mails;
(iii)Allowing the female student to drive your car, registration number VBL 749;
(iv)From February 2002, when your wife, Sabina Sinclair, had gone overseas to work, you:
(a)Allowed the female student to move into your residence at 5 Cornwall Place, Bella Vista, without your wife’s knowledge;
(b)Allowed the female student to locate her clothing and personal effects in your residence, including but not limited to within the confines of you and your wife’s bedroom.”
67.In respect of the s 83(d) charge of “breach of discipline”, it was alleged that Mr Sinclair:
“Wilfully disobeyed, or wilfully disregarded, a lawful order made or given by a person having authority to make or give the order …[W]hilst employed as a Head Teacher at Baulkham Hills High School, you failed to comply with a written direction given to you by Ms Val Macaulay, Director, Child Protection Investigation Unit, in her letter dated 26 February 2001, which stated that ‘During the period of the investigation, your conduct must be professional and in keeping with your position and status as an employee of the Department of Training and Education. You are to take no action which would hinder the progress of the investigation. This includes not visiting or meeting any student of Baulkham Hills High School face to face, not contacting any student by telephone, letter or card, through an intermediary or via any computer based system, including e-mail’ in that you:
(A)Between March 2001 and 18 July 2002, were in contact with the female student either in person, and/or by telephone or mobile telephone;
(B)From February 2002 to 18 July 2002, allowed the female student to move into your residence at 5 Cornwall Place, Bella Vista.”
68.Mr Sinclair was given 14 days to provide a written response to those charges and his then solicitor, Mr Paul MacMahon, denied the charges on his behalf on 19 September 2002. Ms Carol McDiarmid, District Superintendent of the Department based at Orange, was appointed as “Prescribed Officer” to deal with the charges. The Department’s position on the matter was then in the hands of its Legal Department, and Ms McDiarmid subsequently sought submissions from Mr MacMahon as to whether to deal with the matter on the papers, or by inquiry. She decided to deal with it on the papers and, on 8 January 2003, required Mr Sinclair to provide all evidence upon which he intended to rely in defence of the charges, together with “any relevant submissions”. The CPID was also directed to provide Mr MacMahon’s firm with a copy of its evidence and submissions. The CPID provided its material to MacMahon on or about 31 March 2003, and MacMahon provided Mr Sinclair’s response on or about 13 June 2003, the centrepiece of the response being his detailed statement of 12 June 2003 (to which I have already referred).
69.In that statement Mr Sinclair accepted “for the most part” what it was alleged had taken place, and that his relationship with Ms Shackle was inappropriately beyond what was normal between teacher and student, but he denied he took any action at all with a view to developing and maintaining an “improper” relationship with her. In his oral evidence he justified his keeping in contact with her, in breach of the instruction, on the grounds of “humanitarian decency” (T19-20). Mr MacMahon submitted there was no evidence to base any finding there was a sexual relationship. Insofar as Mr Sinclair’s conduct may have been in breach of the written direction given by Ms Macaulay, he maintained that nothing he did would “hinder the progress of the investigation”.
70.Mr MacMahon submitted that the substance of a direction not to hinder the investigation was within power, but the broad terms of the direction given to Mr Sinclair were beyond power and could be for no legitimate purpose. Mr Sinclair pointed out that a number of his students lived close to his home, indeed one lived next door. It was hard to avoid them on shopping excursions, etc. The Year 12 students of 2001 included friends of Julian that Mr Sinclair had known since they were 5. He attempted to comply with the edict, despite the anxiety it caused, and the inconvenience which resulted from avoiding his nearest local shopping centre.
71.So far as maintaining contact with Ms Shackle, “mostly by telephone”, was concerned, Mr Sinclair said he believed “that by maintaining some contact with her she has survived these last two years and been afforded the chance to do reasonably well at her HSC. The pressure placed on her by her parents and by this investigation has been enormous and a great source of distraction from her studies”.
72.On about 18 November 2002 Mr Sinclair had returned to work at the Parramatta District Office two days per week, as arranged by Commonwealth Rehabilitation Services (“CRS”), and, on 10 February 2003 he increased his work time to 3 days per week.
73.During May and early June 2003 there was substantial, and quite confronting (see T14-16), media comment on the relationship between Mr Sinclair and Ms Shackle, causing him to have time off work, and, on 13 June 2003, Mr Sinclair made an application for medical retirement.
74.On 19 June 2003, Ms McDiarmid wrote to Mr MacMahon advising that she had found “the particulars of all of the charges proven”. She enclosed a copy of her report, which has not been put into evidence by either party to this appeal, and invited submissions on the question of punishment.
75.On 28 July 2003, Ms McDiarmid advised of her decision “to recommend to the Director-General that the penalty to be imposed should be dismissal” in respect of each of the two charges.
76.On 31 July 2003, the then Director-General of Education and Training, Ms Jan McClelland, wrote to Mr Sinclair, care of his solicitors, inviting submissions regarding the recommendation of dismissal. On 14 August 2003, Mr Sinclair submitted to the Director-General that he should not be dismissed, but, on 15 August 2003, he received his letter of dismissal, which then attracted substantial press attention.
77.On 20 August 2003, the TMF wrote to him refusing further workers compensation benefits beyond 2 September 2003, “because medical evidence indicates that you are now fit for pre-injury duties and pre-injury hours. Also medical evidence indicates you no longer suffer from a psychological injury arising out of or in the course of your employment”.
78.On 19 December 2003 the Ombudsman’s Office reported on its investigation of the department’s handling of Mr Sinclair’s case. Ms Carlon notes (at par 15 of her statement) that the report found that “all possible lines of enquiry were followed up, that the investigation’s progress was regularly reviewed, that evidence was appropriately considered, analysed and cross-referenced, and that all parties were sensitively dealt with”.
79.At the time Mr Sinclair ceased work, his salary as a Head Teacher was agreed to be about $80,000 per year (T19 L25-33). There is no evidence of what exactly he was being paid at that date. After his dismissal, and prior to the arbitration hearing, he earned some fees from one or more publishing companies, and did some casual work at a University Library. At the time of the appeal hearing he was stated to be overseas.
THE MEDICAL EVIDENCE
80.Mr Sinclair’s case is that it was “unreasonable”, and harmful to his health, for the Department to:
·Take him away from his responsibilities as Head Teacher, and as a teacher of several Year 12 classes,
·Assign him to a very different job at the Department’s District Office,
·Keep him waiting “in the dark” (T96) for more than 8 months before he was told the allegations against him,
·Subject him to behavioural limitations with which it was practically impossible, and personally very stressful, for him to try to comply, and
·Take more than two and a half years to conclude the investigation and consequential disciplinary proceedings.
“They should maintained (sic) human contact with me and treated me as somebody who had worked for them very, very hard for a very, very long time…. [W]hen you investigate something someone might be guilty, someone might be innocent. I was treated like I was guilty right from, you know, the first five minutes”. (T96)
81.He became “more disheartened and depressed”, “very discouraged”, and “increasingly morose” as the investigation proceeded during 2001. He began consulting an EAP psychologist, Ms Fran Fagan on 25 July 2001, and his regular GP in September 2001, about these symptoms. He was particularly “distressed” at not being able to see his Year 12 students, many of whom were Julian’s contemporaries – “this broke my heart”.
82.He further argues that any confidentiality was lost as a result of his sudden removal from the school, long before the allegations were put to him, which led to a great deal of “public comment, with questions raised about my whereabouts and health”, and was “exacerbated” by the release to the media of “mostly untrue” information about his case. “This media attention has been most stressful…”, but the Department denies any role in the media attention, attributing it to actions taken by Mr and Mrs Shackle. In none of the evidence is the media seen as any more significant in Mr Sinclair’s distress than as a subsidiary factor in the passage of the investigation.
83.Mr Sinclair readily concedes that the death of his son in 1996 “had a terrible and lasting effect” on him, but claims it made him work harder and gain more prominence in his chosen profession – writing textbooks (he has published six in all), and being promoted to Coordinator of the HSC English Advice Line (T3 L23-57). “…[M]y career flourished to its highest point after Julian’s death”, but the “investigation made me give up on everything”. He then contends that “when I finally gave up on myself and applied for Medical Retirement, the CPID blocked the application”, and the resultant delay “caused my retirement to come through just one day after I was dismissed”.
84.So far as expert medical evidence is concerned, the Arbitrator had before him:
·Certificates of incapacity and medical reports from Mr Sinclair’s treating doctors, Dr Janusz Pendel (his GP) and Dr Ben Teoh (his Psychiatrist).
·A certificate from the State’s “HealthQuest” dated 18 August 2003.
·A report from Clinical Psychologist, Vicki Garner whom Mr Sinclair consulted regularly between 30 January 2002 and 21 August 2003.
·A report from Dr Inglis Howe Synnott (a consultant psychiatrist retained on the Department’s behalf).
·Various rehabilitation reports from CRS Australia.
85.Dr Pendel had cared generally for Mr Sinclair since 1992, but for “work related anxiety and depression for over 2 years” (as at his report dated 13 June 2003), which exacerbated to such an extent that Mr Sinclair could not continue as a teacher from “early 2002”. Dr Pendel opined that Mr Sinclair’s condition was “chronic” and the prognosis “poor”. “In my opinion his depression and emotional problems are serious enough to render him permanently unfit for teaching duties. I strongly suggest that he retire from work in the education system”, but continue with treatment and counselling.
86.Ms Garner found Mr Sinclair to have developed symptoms of depression and anxiety linked to the “prolonged nature of the investigation”.
87.Dr Pendel referred Mr Sinclair to Dr Teoh, whose detailed report dated 28 February 2004 notes Mr Sinclair to be in good physical health (as at 26 August 2002), with no history of alcohol or substance abuse, but as presenting in a way “consistent with a diagnosis of an adjustment disorder with depressed mood”. Dr Teoh opined that Mr Sinclair’s “problems with the investigation and disciplinary proceeding have been a substantial contributing factor to his depression. However he has other factors that could be relevant including the death of his son in 1996 – he showed evidence of prolonged grief. He had vulnerable factors in his childhood with a sick mother and unhappy home environment. His wife had left him in 2002, this has no doubt contributed to his depression as well”. Dr Teoh treated him with psychotherapy and anti-depressant medication and opined that he will require ongoing psychotherapy.
88.The HealthQuest certificate of 18 August 2003 projects that Mr Sinclair’s “health condition” will “in all likelihood prove permanent”. It certifies him as unable to perform the inherent requirements and job demands of a Head Teacher position “for the foreseeable future”.
89.Dr Synnott saw Mr Sinclair on 19 May 2003, on the Department’s behalf, and Mr Sinclair appears to have been frank and comprehensive with him. He was working 3 days per week on planning and professional development tasks and could not face more days/hours, even though he had kept working following the tragic death of his son in 1996. He told Dr Synnott that the major cause of his then psychological symptoms was “the delay in resolving” the complaint against him, there being “no end in sight” after 2 ½ years. He told Dr Synnott he “had problems” with being shown on television and being described as a “disgraced teacher”.
90.Dr Synnott found no “pre-existing condition”, and “no overt evidence of any current major psychiatric disorder” (P43), but diagnosed “309.28 Adjustment Disorder with mixed anxiety and depressed mood”. He opined that “Employment with the Department of Education & Training contributed to the development of the Adjustment Disorder, but it was not the only contributing factor. Also, the Adjustment Disorder did not produce any significant psychiatric impairment and it was not a contraindication to Mr Sinclair returning to work”. Later in his report he concludes that “employment with the Department of Education & Training was a substantial contributing factor”. Other “causes” he found to be “the death of his son several years earlier, the disintegrating marriage with his wife, the death of his father and the pre-existing personality vulnerability that only became apparent when he became anxious about his own future”.
91.Dr Synnott concluded: “From a strictly psychiatric perspective, Mr Sinclair could ‘resume normal pre-injury duties if they (sic) wanted to’”. He found him fit to resume normal teaching duties, or the duties of a professional development officer at Parramatta District Office. Although fit, his lack of motivation “may well be the major reason why he ultimately does not end up resuming face-to-face teaching, or being involved with students in any way in the future”. Dr Synnott would put no restrictions on Mr Sinclair resuming employment. He saw no reason to change his medication or undertake further specialist treatment. “The ‘injury’ will improve and the patient recover only if his motivation to work improves…There is no permanent psychiatric impairment”.
92.The CRS reports (of which No.6 in the series is missing) deal mainly with the Department’s efforts, in which Mr Sinclair was cooperative, to get him back to substantial work after his inability to resume in early 2002. They note fluctuations in his fitness and/or preparedness to increase his hours beyond 16 per week, as certified in October 2002. For example, he commenced doing 3 days per week in the week of 24 February 2003, but was certified unfit for any work during some period in May/June 2003, as a result of “increased stress due to media attention about the internal departmental investigation”. Report No.9 (dated 11 August 2003) notes that Mr Sinclair’s “mental state remains variable depending on his external circumstances”, including medical and legal appointments, and concludes that “an increase in hours/days of work is not viable until the investigation is settled”.
THE ARBITRATION
93.As noted above (pars 8-9) the Department declined to negotiate a settlement of its workers compensation dispute with Mr Sinclair when it came before the Arbitrator, first at a teleconference, and then face-to-face, and the Arbitrator received some additional documentary evidence, and heard oral evidence from Mr Sinclair, and then submissions from Mr Sinclair’s solicitor and junior counsel for the Department, Mr Saul, before reserving his decision for a week.
94.Mr Sinclair was, as one might expect from an English scholar, very careful about the words used, both during the investigation and during his oral evidence, to describe various stages of his developing “close personal relationship” with Ms Shackle, and he was at pains to make clear that the allegation of a sexual relationship at any relevant time was denied, as unfounded, and no such allegation was pursued by the Department during the charging phase of its investigation. Nor was it the subject of submissions to the Arbitrator on behalf of the Department.
95.The Arbitrator also made clear that the proceedings before him turned on questions such as “injury”, and capacity to work, and could not be a “rehash” of the disciplinary proceedings (see T47), and the resultant dismissal of the worker by the Department.
96.The submissions made to the Arbitrator on Mr Sinclair’s behalf focussed on the fact that Mr Sinclair sought professional counselling, and obtained a prescription for medication – there is some argument about whether he took, or persisted with, medication in the relatively early stages – between receiving the letters of allegation and the notices of charges, and well before Mrs Sinclair returned from overseas and formally separated from him. It was submitted that there was little change in Mr Sinclair’s symptoms from September 2001 onwards, although he did not cease work until he failed to resume after the school holidays in early 2002, and he then remained off work till late that year.
97.Throughout the case Mr Sinclair has admitted disobedience of the order given that he was to have no contact with his Baulkham Hills students, not just Nicki Shackle, but his representative submitted that no “injury” sustained by Mr Sinclair flowed from that particular “misconduct”. In terms of what caused the “injury”, the allegations on his behalf are that Mr Sinclair’s transfer out of the school was handled unfairly and inappropriately, as were the investigation and charge proceedings which followed that transfer and the delay in specifying the allegations, making the charges, and then finalising the matter was excessive and/or unreasonable. It was suggested on Mr Sinclair’s behalf that the Department’s own procedures manual was not followed in every relevant respect. In November 2001 the allegations were particularised, but not beyond what was essentially known in February 2001. Mr Sinclair’s solicitor submitted that delay was caused by the Department “fishing … to find a sexual link” (T98).
98.The Department’s case before the Arbitrator was that once the “global allegation” of “close personal relationship with a student” is made, and directions given to the accused teacher, as to his conduct thereafter while still employed by the Department, any breach of such directions amounts to “serious and wilful misconduct” (T78 and T83), whatever may explain or excuse the teacher’s actual conduct. “It is sufficient that he has entered into a close personal relationship with a student, and that has essentially caused some form of injury when he received that letter …” (T83), in that the development of the relationship (even short of a sexual relationship) is “misconduct” of the type which would engage s 14 (T82).
THE ARBITRATOR’S WRITTEN DECISION
99.In his Reasons published on 22 March 2004 [par 7], the Arbitrator identified 5 questions he had to answer:
(1)Did the Applicant receive an injury arising out of or in the course of employment (s 9)?
(2)Was the Applicant’s employment a substantial contributing factor to his injury (s 9A)?
(3)Does the Applicant suffer from an incapacity for work?
(4)Is the Applicant’s injury the result of reasonable action with respect to discipline (s 11A)?
(5)Was the Applicant’s injury solely attributable to serious and wilful misconduct (s 14)?
100.In par [11] of his Reasons the Arbitrator listed the documents which he took into account in making his decision, but it is clear that he also had before him a “Chronology” filed on behalf of Mr Sinclair on 12 January 2004 (P92).
101.The Arbitrator’s recitation of the facts, while not as comprehensive as mine, is certainly thorough and accurate.
102.The Arbitrator noted that the extensive cross-examination of Mr Sinclair by Counsel for the Department was directed to his credit, and said he found Mr Sinclair “to be a cautious witness”, who sought to clarify terms having “a wide range of meaning”. He did not agree with Counsel for the Department that Mr Sinclair attempted to avoid questions. “In my view the Applicant was doing his best to truthfully answer questions about what was ultimately a very difficult and personal matter. I found no reason to doubt the veracity of the Applicant as a witness” [par 23].
103.He made a finding of injury [par 28], and proceeded to acknowledge other potential causes of Mr Sinclair’s condition. He accepted the unanimous medical opinion that “employment was a substantial contributing factor” [par 29], and then turned his attention to the s 14 argument. In par [31] he noted the Department’s case in the following terms:
“The Respondent contends that there are two bases for finding that the Applicant’s injury is due to serious and wilful misconduct. It is firstly alleged that by February 2001 the Applicant was engaged in improper relationship with Nicki Shackle which was contrary to the directions and expectations of the Respondent. Secondly it is submitted that following February 2001 the Applicant acted in contravention of a direct order when he had contact with Nicki Shackle. It was that contact which gave rise to the charges that were ultimately made in August 2002 and which lead (sic) to his dismissal.”
104.After reviewing the relevant facts he concluded:
(i)“… I am satisfied that the Applicant had a relationship with Ms Shackle that involved Ms Shackle confiding in the Applicant and seeking guidance in a way that would make her stand apart from the other students. There is no evidence that by February 2001 there was any sexual relationship or any intimacy which would be the precursor to such a relationship. At that stage Ms Shackle viewed the Applicant more as a father figure and the Applicant was doing no more than providing guidance to a student. Whilst that guidance is wider than the strict confines of teaching the English syllabus there is no evidence that at that stage it was outside what would be expected of a caring teaching (sic) with an interest in his students. As at February 2001 I am not satisfied that the Applicant had engaged in serious and wilful misconduct or was acting outside the scope of his employment .” [par 32]
(a)the weekly amount which the worker would probably have been earning as a worker but for the injury and had the worker continued to be employed in the same or some comparable employment (but not exceeding $1,000), and
(b)the average weekly amount that the worker is earning, or would be able to earn in some suitable employment, from time to time after the injury (but not exceeding $1,000).
…
(3)Ability to earn in suitable employment. The determination of the amount that an injured worker would be able to earn in some suitable employment is subject to the following:
(a)the determination is to be based on the worker's ability to earn in the general labour market reasonably accessible to the worker,
(b)the determination is to be made having regard to suitable employment for the worker within the meaning of section 43A.
(4)Rehabilitation—unemployed (or not fully employed) workers. An injured worker who duly undertakes rehabilitation training under section 38 is not to be disadvantaged under this section by any increase in the amount that the worker would be able to earn merely because of that training, unless the worker unreasonably refuses an offer of suitable employment for which the worker has been trained. The Commission may determine any dispute about the operation of this subsection.
(5)Maximum rate of compensation. The weekly payment of compensation to an injured worker in respect of any period of partial incapacity for work is not to exceed the weekly payment that would be payable to the worker if it were a period of total incapacity for work.
…”
191.Section 43A(1) relevantly provides:
(1)“For the purposes of sections 38, 38A and 40:
suitable employment, in relation to a worker, means employment in work for which the worker is suited, having regard to the following:
(a)the nature of the worker's incapacity and pre‑injury employment,
(b)the worker's age, education, skills and work experience,
(c)the worker's place of residence,
(d)the details given in the medical certificate supplied by the worker,
(e)the provisions of any injury management plan for the worker,
(f)any suitable employment for which the worker has received rehabilitation training,
(g)the length of time the worker has been seeking suitable employment,
(h)any other relevant circumstances.”
192.Section 52A(1) relevantly provides:
“(1) Weekly payments of compensation in respect of partial incapacity for work are not payable for any period beyond the first 104 weeks of partial incapacity for work (whether or not any part of that period is compensated as if the incapacity for work was total) but only if one or more of the following paragraphs (referred to in this section as grounds for discontinuation) applies to the worker at the relevant time:
(a)the worker is not suitably employed (within the meaning of section 43A) and is not seeking suitable employment (as determined in accordance with section 38A),
(b)the worker is not suitably employed (within the meaning of section 43A) and has previously unreasonably rejected suitable employment (within the meaning of section 40 (2B)),
(c)the worker has sought suitable employment but has failed to obtain suitable employment primarily because of the state of the labour market (rather than because of the effects of the worker's injury).”
193.I will now set out the relevant grounds of appeal advanced by the Department:
7.The arbitrator failed to properly consider and incorrectly applied the provisions of section 38 and section 38A to this case, and failed to take into consideration any compensation payments that had been made prior to the award in determining the quantum of weekly payments of compensation.
8.The arbitrator failed to properly consider section 40 in respect of the worker’s probable earnings but for injury and the appellant’s ability to earn.
8A.In particular, the arbitrator failed to consider the appellant’s submissions regarding the workers probable earnings but for injury, and the worker’s current weekly earnings in light of the dismissal by the appellant of the worker for misconduct and the worker’s inability to continue to work as a teacher either for the appellant or on the open labour market as a result of such misconduct.
9.The arbitrator failed to consider the exercise of discretion pursuant to section 40.
…
11.The arbitrator erred in finding that the earnings from MacMillan Publishing were not as a result of employment, and erred in not taking these earnings into account when making his award.
12.The arbitrator, on the weight of the evidence, failed to properly assess the ability to earn of the worker since his dismissal from the employment with the appellant.
194.During the oral argument of this appeal there was some conflict between Senior Counsel about the involvement of s 38 and/or s 40 in the thinking of the Arbitrator and in his decision. The sections are not specifically referred to in the orders made by the Arbitrator at par [50] of his Reasons, and embodied in the Commission’s Determination, but the Arbitrator found s 38 “satisfied” (in par [48]), and Order No.3, dealing with the period from 21 January 2004 onwards would appear to be founded upon s 40. Junior Counsel for the Department addressed both sections in, at least, his oral submissions to the Arbitrator (see T86 L7ff).
195.In respect of s 40, the Department submitted (p43) that “no proper analysis[was] undertaken by the arbitrator when considering any section 40 entitlement” and that the proper approach was to inquire as to Mr Sinclair’s “probable earnings post dismissal …as if uninjured” and then as to his “ability to earn in that context”. The submissions on behalf of Mr Sinclair (par 48 on p40) accept that approach, and refer to Mitchell v Central West Health Service (1997) 14 NSW CCR 526, a Court of Appeal decision which reviewed and applied the decision in Australian Wheat Board v Pantaleo (1984) 3 NSWLR 530, to which Senior Counsel for the Department referred me. See also Williams v Boambee Bay Time Share Resort Pty Ltd & Anor [2004] NSW CA 59.
196.Reading those cases in the light of the differences in procedures prescribed for the former Compensation Court and those now prescribed for this Commission, I can see no error in what the Arbitrator has done overall in regard to determining that compensation is payable to Mr Sinclair pursuant to s 40.
197.The Department further submitted on this appeal simply that the Arbitrator did not refer (presumably in his Reasons) to its submissions that Mr Sinclair’s “probable earnings but for injury” should not be taken to be those of a teacher employed by the Department, “given that his employment was terminated as a result of the worker’s own misconduct”. Hence, it argued, his compensation entitlement should be zero from the date of dismissal, despite the evidence, accepted by the Arbitrator, that Mr Sinclair is able to work only three days per week (a 40% reduction in capacity). In the dialogue between the Arbitrator and counsel for the Department (at T86 particularly) it seems clear he took that submission on board as relevant to the question of discretion, but no authority is cited for that proposition, and it flies in the face of the whole workers compensation system, unless the “disentitling conduct” defence to any and all entitlement is made out. Injured workers in the NSW system are compensated for the economic effects of work-related injury, not for the economic effects of work-related dismissal. Australian Iron & Steel Pty Ltd v Elliott [1966] SR (NSW) 87.
198.In the written submissions made on Mr Sinclair’s behalf (nominally in regard only to Ground 7), the following submissions are made (in pars 45-46 on p 38):
“45.… Given that the section 38 award (which commenced on 15 August 2003) overlapped the voluntary payments, presumably made under section 40, the arbitrator, allowed the appellant to have credit for all payments made until 2 September 2003 so as to prevent doble (sic) compensation. If the appellant did in fact continue to make voluntary payments until October 2003, or if those voluntary payments were made under section 38, the respondent has no objection to the arbitrator’s order being amended under the slip rule to reflect this.
46.The liability under section 38 subsists for a period of 52 weeks from the date of the employer’s failure to provide light duties, which in this case was found to be on 15 August 2003. There is no evidence to suggest that any payments of weekly compensation under section 38 of the WCA had been made prior to this time. A (sic) such the respondent was, it is submitted, entitled to receive compensation for the full 52 week period as specified in section 38(2) of the WCA. The award made after 20 January 2004 appears to be made pursuant to section 40 on the basis of a single worker without dependants. It is submitted that this is an error in applying the law to the facts and should be varied such that the section 38 award continued until 14 August 2004. The respondent seeks variation of the award in accordingly (sic).
199.Mr Sinclair went off work for the first time on 14 November 2001 and resumed part-time work on 19 November 2002. He worked two days per week until March 2003, and then three days per week until his employment was terminated on 15 August 2003. He bears the onus of satisfying the provisions of these sections of the 1987 Act, and the Department submits (p41) that the Arbitrator failed to consider the relevant provisions of s 38A in deciding to make an award pursuant to s 38 – namely, that Mr Sinclair failed to prove that he was (at the time of the arbitration) (i) seeking suitable employment, (ii) ready, willing and able to perform suitable duties, and (iii) seeking or receiving approved rehabilitation.
200.The Department further submits (p42) (a) that s 38A cannot apply where the worker has been dismissed for improper conduct as there is no opportunity for suitable employment with the relevant employer, (b) that the Arbitrator failed to take into account “voluntary” payments of compensation “from November 2001 to October 2002” when determining the quantum of compensation, and (c) that the Arbitrator failed to consider whether the 52 week time limit in s 38(2) had already expired.
201.The Department failed to develop its argument on any of these points (concerning Ground 7), in either its written or oral submissions, and I note that the sixth paragraph of the Commission’s formal determination specifically provides for the Department “to have credit for payments made between 15 August 2003 and 2 September 2003”, those being, respectively, the dates of dismissal and cessation of benefits.
202.The submissions made in this appeal on Mr Sinclair’s behalf point out that the Arbitrator effectively invoked s 38 by drawing, from the evidence before him, the appropriate inferences regarding Mr Sinclair’s state of fitness, his pre-termination work for the Department, and his search for “light duties” since (par [48] of the Reasons). Subject to his continued fitness to work at least 3 days per week, Mr Sinclair is obviously fit to do professional writing, casual library work, administrative and clerical work, curriculum and some professional development work, and, presumably, light physical work. He anticipates that teaching will be too exhausting, but the circumstances of his departure from the Department would make it very difficult for him to obtain a classroom or other child-related position anyway (see T70-71, and P82). Given the termination of his employment, and the availability of the CRS and other reports, it does not seem unreasonable that specific medical certificates might not have been presented (as contemplated by s 38A(2)(b)). Given the termination of his workers compensation benefits it is also not unreasonable that he is not paying personally for a continuation of rehabilitation and counselling services.
203.Many of the older cases on the predecessors of these provisions dealt with people beyond some mandatory (sometimes statutory) retirement age – see, e.g. Wall v Australian Iron & Steel Pty Ltd [1983] 1 NSWLR 654 – and acceptance of voluntary redundancy has been held not to extinguish entitlements in the nature of s 38 benefits - Archer v Australian Iron & Steel Pty Ltd [1982] WCR (NSW) 122. However, I know of no authority for the proposition that termination by the employer, for whatever cause, should extinguish entitlements to such benefits. As the High Court observed in Campbell v The Commissioner for Railways of the State of New South Wales (1971) 126 CLR 36, the purpose of such provisions is to protect the incapacitated worker if, for any reason, suitable employment is not provided by the employer.
204.In par [48] of his Reasons, the Arbitrator summarised the evidence before him on the question of Mr Sinclair’s capacity/incapacity for work, finding him “partially incapacitated” as at the date of his dismissal. The Arbitrator then summarised the evidence concerning subsequent earnings, distinguishing between those derived by Mr Sinclair from a contractual publishing arrangement ($7,200 as at the date of the arbitration – T19 L5-7), and those derived from part-time work in a university library ($900).
205.The Arbitrator took the view that the publishing income should not be counted, as such contractual arrangements “do not constitute employment”, and that the library income should, for the purposes of calculating compensation entitlements, be presumed to have been earned in a single week. I respectfully disagree with both these conclusions.
206.In respect of ground 11, which concerns the Arbitrator’s approach to the publishing income, the Department contends before me that the key issue is capacity to earn income, not how the income is structured or regarded. The Department urges that the income should be (i) “credited against any award monies awarded (sic)”, and also (ii) “taken into consideration when assessing … ability to earn”. The Arbitrator chose to do (ii) but not (i). There was before him evidence that Mr Sinclair was involved in – and was possibly paid for – the publication of text-books prior to 2001, so it was certainly part of his pre-injury life, and may have contributed to his pre-injury and pre-dismissal earnings. I see no reason for it to be ignored, and know of no authority requiring that it be ignored. The decision of the Court of Appeal in Hill v Bryant [1974] 2 NSWLR 423 would certainly suggest that all income earned, from whatever source, should be taken into account.
207.Secondly, regarding the library income, it is to be noted that, in his oral evidence, Mr Sinclair said he earned the $900 over a three-week period in November 2003 (T19 L13-15).
208.In par (49] the Arbitrator made a finding that Mr Sinclair’s “earnings but for injury exceed the relevant s 35 maximum”, but it is not clear from the Reasons how the precise amounts in par [50] were arrived at, and under what sections each was ordered. I am left to guess the sections, but I cannot reconcile the amounts in the orders. The Arbitrator deducted (at their highest, and as he found them to be) Mr Sinclair’s earnings from employment, and exercised his discretion, in the light of submissions put to him on behalf of the Department, including some substantial written submissions – see T87 L28-35, c.f. par 12 above, and also the dialogue between Counsel and the Arbitrator beginning at T86 L7.
209. In summary, it is clear that Mr Sinclair was entitled to workers compensation, under s 40, until he was dismissed, namely 15 August 2003, and to workers compensation, under s 38, from that date for as long as he was partially incapacitated, subject to the statutory maximum period of 52 weeks. Thereafter, his ongoing entitlements, if any, should be determined in accordance with s 40.
210.The Arbitrator sought to make monetary orders to that effect. In the end, the Department says the amounts ordered are in some respects too high, and the submissions on Mr Sinclair’s behalf suggest they might be too low, but neither side has put specific amounts to me in this regard.
211.In respect of these remaining six grounds of appeal, therefore, the appropriate order for me to make is to direct the parties to confer upon, and file with the Registrar within 28 days of the date of this decision, appropriate draft orders specifying the correct amounts of Mr Sinclair’s specific statutory entitlements for all components of the period 15 August 2003 to date and continuing, in accordance with these Reasons.
DECISION
212.The Department’s appeal is dismissed. The Arbitrator’s decision in favour of Jeffrey Sinclair and paragraphs 4, 5 and 6 of the Commission’s Determination of 22 March 2004 are confirmed, but the parties are to confer upon, and file with the Registrar within 28 days of the date of this decision, appropriate draft orders specifying the correct amounts of Mr Sinclair’s specific statutory entitlements for all components of the period 15 August 2003 to date and continuing, in accordance with these Reasons.
COSTS
213.As the appeal has been unsuccessful in respect of all its grounds, the Department is ordered to pay Mr Sinclair’s costs as agreed or assessed according to law.
President
16 December 2004
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF JUSTICE TERRY SHEAHAN, PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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