Edwards v Secretary, Department of Education and Communities - [2016] NSWWCCPD 45

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Edwards v Secretary, Department of Education and Communities [2016] NSWWCCPD 45
APPELLANT:	Penelope Edwards
RESPONDENT:	Secretary, Department of Education and Communities
INSURER:	Allianz Australia Insurance Limited as Agent for NSW Self Insurance Corporation
FILE NUMBER:	A1-4197/15
ARBITRATOR:	Ms C Rimmer
DATE OF ARBITRATOR’S DECISION:	3 May 2016
DATE OF APPEAL DECISION:	14 September 2016
SUBJECT MATTER OF DECISION:	Section 11A(1) of the Workers Compensation Act 1987: “wholly or predominantly caused by”; “reasonable action taken or proposed to be taken”
PRESIDENTIAL MEMBER:	Deputy President Michael Snell
HEARING:	On the papers
REPRESENTATION:	Appellant:	Shaddick Legal Pty Ltd t/as Shaddicks Lawyers
Respondent:	Bartier Perry
ORDERS MADE ON APPEAL:	1. The identity of the respondent is amended to “Secretary, Department of Education and Communities”. 2. The Arbitrator’s determination dated 3 May 2016 is confirmed.

INTRODUCTION

This appeal raises issues going to the application of s 11A(1) of the Workers Compensation Act 1987 (the 1987 Act) in a claim involving psychological injury.

BACKGROUND

Penelope Edwards (the appellant) was employed by the Department of Education and Communities (the respondent) as a teacher from about 1974. She taught science at Colo High School from May 1984. She suffered psychological injury, involving aggravation of a pre-existing condition of adjustment disorder with depressed mood, as a result of her duties with the respondent from January 2008 to 29 November 2011.
The respondent denied liability for the psychological injury in a s 74 notice dated 27 July 2009. The grounds of denial included s 11A(1) of the 1987 Act, on the basis that any injury was “wholly or predominantly caused by reasonable action taken, or proposed to be taken, by the employer in relation to performance appraisal”.
The insurer reviewed its decision in correspondence dated 19 September 2013. The denial of liability was maintained, on the basis that the appellant had not suffered a psychological injury, and also that the Department had a defence on the basis of s 11A(1) of the 1987 Act.
The appellant suffered an injury in the course of her employment on 29 January 2010 when she tripped at work. She was described as suffering a left occipital bleed in that incident. It was not pleaded as an injury in the current proceedings.
Dr Rastogi, psychiatrist, assessed the appellant at the request of her solicitors, and reported on 28 May 2014. She assessed 23 per cent whole person impairment in respect of psychological injury. A permanent impairment claim form, consistent with this assessment, was served on Allianz Australia Insurance Limited (the insurer) on 28 July 2014.
The insurer declined liability in a s 74 notice dated 12 August 2014, relying on s 65A(1) of the 1987 Act, which precludes permanent impairment claims for “secondary psychological injury”. It also denied that the appellant’s psychological injury was “a workplace injury”. It relied on s 11A(1) of the 1987 Act, saying that the psychological injury was “wholly attributable to the reasonable actions taken or proposed to be taken by or on behalf of the employer with respect to promotion, performance appraisal and discipline”. It also put in issue whether the provisions of s 9A of the 1987 Act were satisfied.

THE ARBITRAL PROCEEDINGS

These proceedings were commenced by Application to Resolve a Dispute registered on 22 July 2015 (the Application). The appellant claimed lump sum compensation in respect of 23 per cent whole person impairment (“Psychiatric/Psychological” injury).
The proceedings were initially listed for arbitration hearing on 2 November 2015. Mr Grant of counsel appeared for the appellant, and Ms Wood of counsel appeared for the respondent. Mr Grant, by leave, amended Part 4 of the Application, to expand the period of employment relied on as causing injury, to run from January 2008 to 29 November 2011. As a consequence of the amendment, the matter could not conclude on that arbitration date.
The further listing of the matter was delayed, to some extent, by the respondent’s need to conduct further investigations and to serve further material (4.4.16, T6.19–28). A date of 5 February 2016 was vacated by consent. The matter was next listed for arbitration hearing on 4 April 2016, when it proceeded. The respondent had served relatively voluminous material late, on which it relied. No oral evidence was adduced. Both parties made submissions. Orders were made for the respondent to lodge written submissions in reply within seven days, and for the appellant to put on any further submissions in writing within 14 days thereafter. The respondent’s submissions in reply, dated 10 April 2016, were lodged on 21 April 2016.

THE ARBITRATOR’S DECISION

The Certificate of Determination was dated 3 May 2016. The respondent’s identity was amended to read “Secretary, Department of Education”. There was an award for the respondent. The Certificate was accompanied by 57 pages of detailed reasons.
The Arbitrator found that the appellant suffered psychological injury, involving the aggravation of a pre-existing adjustment disorder with depressed mood, arising out of or in the course of her employment with the respondent between January 2008 and 29 November 2011 (her reasons at [241] and [245]). The causative factors which the Arbitrator found were set out at [242] of her reasons:
(a)     the appellant’s disciplinary problems with her students;
(b)     the pre-improvement program in 2008;
(c)     the meeting on 22 September 2008, when the appellant was removed from her classes and referred to Healthquest;
(d)     the meeting on 5 November 2008, when the appellant was directed to leave the school premises;
(e)     the pre-improvement program in 2009;
(f)      the formal improvement program, and
(g)     the appellant’s dismissal.
The Arbitrator found that the provisions of s 9A of the 1987 Act were satisfied, and the appellant’s employment was a substantial contributing factor to the found injury (her reasons at [246]–[252]). She then concluded that the appellant’s “employment was the main contributing factor to the aggravation, acceleration, exacerbation or deterioration of a disease, namely, pre-existing depression” (her reasons at [253]–[261]). The reference to “the cervical spine” at [253] was clearly a typographical error. In context, the analysis related to the found psychological injury.
The Arbitrator then set out the provisions of s 11A(1) of the 1987 Act, and referred to a number of decisions going to the application of the provision (her reasons at [262]–[271]). She repeated (at [281]) the finding on causation which she had made at [242]. She said that these “were all events with respect to or as a consequence of performance appraisal, discipline or transfer and were causative” (her reasons at [281]). At [282], the Arbitrator said that “the disciplinary problems in her classes in 2008 may have been a stressor”. She said that the “disciplinary problems in her classes in 2008 were not matters with respect to performance appraisal, discipline, transfer and dismissal”.
Although there may be some internal contradiction in how the findings on causation at [281]–[282] were expressed, the Arbitrator’s reasons should be read as a whole (Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 at 444). When this is done, it is tolerably clear that the Arbitrator found the disciplinary problems in the appellant’s classes in 2008 to have been amongst the stressors which were causative of the injury, and not to have been “matters with respect to performance appraisal, discipline, transfer and dismissal”.
The Arbitrator, at [285] of her reasons, said:
“In all the circumstances, I find that the disciplinary problems in her classes in 2008 were not a stressor that contributed to any significant extent, but were relatively minor as compared with the other work-related causal factors which I have found contributed to the psychological injury.”
The Arbitrator reviewed a number of appellate authorities dealing with the test of reasonableness. She referred to Jeffery v Lintipal Pty Ltd [2008] NSWCA 138 (Jeffery), as authority for the proposition that the “test of reasonableness is an objective one” (her reasons at [289]). At [292] she referred to the test:
“The respondent’s defence is dependent on the causative events, viewing the process as a whole, being reasonable action by or on behalf of the respondent with respect to performance appraisal, discipline, transfer and dismissal of the [appellant].”
The Arbitrator referred to meetings, associated with the pre-improvement program, and then implementation of a formal improvement program, in June and August 2008. She referred to a meeting on 22 September 2008, at which the appellant was told that she would be taken off her classes and referred to Healthquest. The appellant was placed onto suitable duties. She referred to a meeting on 5 November 2008, where the appellant became distressed and was told to leave the school grounds (see the reasons at [293]–[299]).
The Arbitrator referred to the appellant’s resumption of duties in Term 2, 2009, and her placement on a second pre-improvement program. She referred to a meeting on 11 May 2009, where the appellant was told that she had failed this pre-improvement program, and was to be placed on a “10 week formal improvement program” (the Arbitrator’s reasons at [301]–[304]).
The Arbitrator referred to correspondence from the respondent dated 29 November 2011, regarding why the appellant should not be placed on a “not to be employed list”. The Arbitrator noted that there was subsequent correspondence between the respondent and the appellant’s then solicitors, which resulted in limited approval for casual teaching, with the possibility of extension if she could provide evidence of “successful teaching experience from two Principals”.
The Arbitrator said “the series of actions” which led to the psychological injury were “appropriately characterised as action with respect to performance appraisal, discipline, dismissal, and transfer” (at [309]). She concluded that the respondent’s actions were “reasonable”, and “involved genuine attempts to address the [appellant’s] problems as a teacher” (at [311]). She concluded that “the psychiatric disability is entirely due to events falling within section 11A” (at [313]). The respondent’s relevant actions were “the predominant cause of the [appellant’s] psychological injury and were reasonable”; “the respondent had discharged its onus of establishing a defence pursuant to section 11A(1) of the 1987 Act” (at [313]). There was an award for the respondent.

ON THE PAPERS

Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Nos 1 and 6; the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.

THRESHOLD MATTERS

There is no dispute between the parties that the threshold requirements as to quantum and time as found in the provisions of ss 352(3) and 352(4) of the 1998 Act have been met.

THE NATURE OF THE APPEAL

This appeal is governed by the provisions of s 352 of the 1998 Act. The nature and scope of such an appeal is as provided by s 352(5):
“An appeal under this section is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of any such error. The appeal is not a review or new hearing.”
The powers of the Commission upon conduct of such an appeal are defined by the provisions of s 352(7):
“On appeal, the decision may be confirmed or may be revoked and a new decision made in its place.
Alternatively, the matter may be remitted back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions of the Commission.”

ISSUES IN DISPUTE

The issues in dispute in the appeal are:
(a) Whether the Arbitrator erred in her consideration of “the causative impact” of “insults from issues” that were not within the scope of s 11A(1), on production of the found psychiatric injury?
(b) Whether the Arbitrator erred in fact, in her finding that the respondent “acted reasonably in regard to those issues covered by the [r]espondent’s Sec. 11A WCA defence”?
(c) Whether the Arbitrator erred in fact, in her finding that the injury resulted wholly or predominantly from events covered by s 11A(1)?

THE LEGISLATION

Section 11A(1) of the 1987 Act 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 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.”

GROUND NUMBERS 1 & 3 – THE CAUSATIVE IMPACT OF MATTERS OUTSIDE THE SCOPE OF SECTION 11A(1) OF THE 1987 ACT

The Appellant’s Submissions

These grounds effectively raise the same argument. It is whether the appellant’s proneness, to misperceive the actions of others, and psychological fragility, were appropriately taken into account by the Arbitrator in dealing with whether the found psychological injury resulted wholly or predominantly from actions or proposed actions falling within s 11A(1). The submissions on both grounds refer to, and rely on, the opinion of Dr McMahon, psychologist, dealing with the appellant’s “transient paranoid ideation”.
The appellant submits that, in the first half of 2008, complaints about the appellant’s teaching ability and class control increased. She failed to complete marking and reports on time. The appellant met with Ms Wright (a deputy principal) and Ms Watson (the head science teacher) on 18 June 2008. The appellant there said that she had been under stress during Semester 1, and “working terribly inefficiently”. The appellant’s condition worsened thereafter, so that by 22 September 2008 she was removed from teaching classes. On 5 November 2008, following a meeting with Ms Pollett (relieving workers compensation and rehabilitation manager) and Mr Hall (relieving staff support officer), the appellant was told to leave the school.
The appellant refers to Dr McMahon’s report dated 19 October 2015, in which he said:
“Given her personality structure it may be that she has construed innocuous events as personal attacks.”
And:
“Mrs Edwards reaction was in part to the discipline, performance appraisal and transfer during this period [January 2008 to August 2008]. It is possible that the stress of these events has caused her to misperceive the actions of others by transient paranoid ideation common to some personality disorders aggravated by scrutiny inherent in these processes.”
The appellant refers to the Arbitrator’s preference for the “evidence of the [r]espondent’s witnesses to that of the [appellant] where there was a conflict between the accounts given”. The appellant submits that the Arbitrator, in considering “the interaction between the [appellant] and her colleagues … should have had a clear understanding of the symptoms that the [appellant] suffered as a result of the injury”, and this “she did not do”. The appellant submits that, in evaluating “the perceived actions of others upon the [appellant]”, the Arbitrator’s “process of evaluation” was “flawed”. It is submitted that the way the appellant “interacted was a reflection of her developing condition and was to be expected”.
The appellant refers to Attorney-General’s Department v K [2010] NSWWCCPD 76; 8 DDCR 120 (Attorney-General’s Department v K), and submits on:
“[Attorney-General’s Department v K having] relevance to the consideration of whether or not a worker might suffer psychiatric injury at work in circumstance wherein the worker’s perception of events could lead to a perception of offence of hostility which in turn it is submitted could be interpreted as bullying or harassment. Clearly through the evidence there was a difference of opinion as to whether or not a particular person acted reasonably or not and it is submitted that unless the Arbitrator evaluated the accounts with perception of insult in mind which she failed to do, her reasoning process was flawed and to that extent an error of fact occurred.”
The appellant’s submissions refer to instances where the appellant’s perceptions arguably differed from how situations were assessed by other witnesses. The appellant said that Ms Pollett “brow-beat her” in a meeting on 5 November 2008. Ms Pollett said that “she remained calm and reasonable in the meeting”. The appellant submits that, “given her accepted condition [she] may well have perceived that Ms Pollett brow-beat her”.
The appellant submits that, in assessing her reaction to matters such as being left uninformed on performance issues, and the delay in arrangements for her to attend Healthquest, her behaviour should be assessed with “these histrionic traits in mind”. The appellant submits that, whether or not Ms Watson screamed at her or failed to support her, it is likely that the appellant’s perception was that Ms Watson was aggressive.
The appellant also refers to her interaction with Mr Burke. The appellant submits that she was clearly upset “to the point that she made complaints about his behaviour”. The appellant refers to the Arbitrator’s conclusion that conflict between the appellant and Mr Burke “was clearly a series of minor and insignificant events which did not amount to bullying and harassment”. The appellant submits:
“The Arbitrator appears to have approached issues such as delay, class discipline and interactions that took place between the [appellant] and Mr Burke and categorised the events as trivial on a scale applicable to a normal person acting normally. The [appellant] was through out the period in question not a normal person acting normally but to treat her as such while evaluating the impact of events is a seriously flawed approach and an error of fact.”

The Respondent’s Submissions

The respondent submits that the Arbitrator concisely recorded the appellant’s evidence of falling behind, and her problems with discipline. The appellant states that it “is common ground that the [a]ppellant’s condition deteriorated throughout 2008”.
The respondent submits that in assessing whether the relevant actions taken or proposed to be taken by the respondent were reasonable:
“… the Arbitrator is required to examine the facts and decide which version of events is objectively reliable. To view the conduct as it is perceived by the [a]ppellant whose evidence, the Arbitrator accepted, was unreliable, would result in the Arbitrator making a subjective assessment of the weight of the evidence, rather than an objective one.”
The respondent refers to the following passage from the judgment of Armitage J in Ritchie v Department of Community Services (1998) 16 NSWCCR 727 (Ritchie) at [47]:
“… the test in this case is an objective one, where one must weigh the consequences of the respondent’s conduct against the reasons given for it, and I have done so. It follows of course from the objective nature of the test that evidence given by the applicant as to the perceived unreasonableness of the respondent’s conduct or from the respondent as to the reasonableness of its conduct from its perspective will not be determinative of this issue.”

The respondent submits that:
“… following consideration of the reliability of the evidence of the [a]ppellant and that of the [r]espondent, it was open on the evidence to prefer the [r]espondent’s evidence as being a reliable factual account of what occurred, how it was delivered and what transpired.”
The respondent refers to the appellant’s reliance on Attorney-General’s Department v K, and submits that these submissions:
“… appear to be confusing the parameters for determining injury with the question of whether an objective assessment of the actions of the [r]espondent were reasonable. The [r]espondent submits that they are two distinct principles.”
The respondent refers to the Arbitrator’s finding that the appellant’s problem with classroom discipline, while causative of injury, was “minor in the context of the ensuing disciplinary process”. It submits that this conclusion was clearly supported by evidence. There is reference to the psychologist’s contemporaneous notes, the absence of complaint about such matters to Dr McMahon, Dr George and Dr Rastogi, and Dr Rastogi’s opinion on causation.

Discussion

It should be specifically observed that the Arbitrator made a finding of psychological injury in the appellant’s favour, which is not the subject of challenge. This appeal relates solely to the finding that a defence was made out pursuant to s 11A(1) of the 1987 Act.
In Manly Pacific International Hotel Pty Ltd v Doyle [1999] NSWCA 465; 19 NSWCCR 181 (Doyle) at [4]–[5] Fitzgerald JA (Mason P agreeing) at [4] said:
“Before this Court, it was not disputed that Mr Doyle’s employment was a substantial cause of his psychological injury. That being so, the Compensation Court was required to decide whether (i) the whole or predominant cause of Mr Doyle’s psychological injury was the appellant’s action with respect to Mr Doyle’s transfer from one position to another, and, (ii) if so, whether the appellant’s action with respect to Mr Doyle’s transfer was reasonable.
Ground Numbers 1 and 3 go to the first of the questions raised in Doyle at [4]: did the injury result wholly or predominantly from those matters falling within the scope of s 11A(1)? It goes to the Arbitrator’s ultimate findings of fact, at [313]–[314] of her reasons.
In Temelkov v Kemblawarra Portuguese Sports & Social Club Ltd [2008] NSWWCCPD 96 Roche DP considered the nature of the test of causation posed in s 11A(1). The Deputy President, at [79], said:
“The leading authority on causation in workers compensation claims is Kooragang Cement Pty Ltd v Bates(1994) 35 NSWLR 452 (‘Kooragang’) where it was observed that causation is a question of fact to be determined on the evidence in each case. That case concerned the question of whether the death of a worker had ‘resulted from’ the relevant work injury. The present matter concerns whether ‘the injury was wholly or predominantly caused by reasonable action’. Acting Deputy President Handley considered the phrase ‘predominantly caused’ in Ponnan v George Weston Foods Ltd[2007] NSWWCCPD 92 and applied the dictionary meaning (at [24]) of ‘mainly or principally caused’. I agree with that definition and intend to apply it in the present matter.”
The matters the Arbitrator found to be causative of the injury were set out at [242] of her reasons (see [12] above). One of these, the appellant’s disciplinary problems with her students, was not a matter with respect to performance appraisal, discipline, transfer and dismissal, and did not fall within the classes of action described in s 11A(1) (see [15] above). The appellant, on this appeal, does not challenge the Arbitrator’s conclusion that the other causative factors, identified at [242] of the reasons, were matters with respect to performance appraisal, discipline, transfer and dismissal (reasons at [281]–[282]).
The appellant’s submissions refer to two specific matters not falling within the scope of s 11A(1), as being causative of the injury.

The Disciplinary Problems

The first of these is the disciplinary problems in 2008. The appellant’s submissions refer to the worsening of her condition in 2008, leading to her being removed from duties on 22 September 2008, and being told to leave the school on 5 November 2008.
The Arbitrator, at [284] of her reasons, specifically addressed the question:
“… whether the disciplinary problems in [the appellant’s] classes in 2008 were a causative factor which would preclude a finding that injury was wholly or predominantly caused by reasonable action taken by the respondent with respect to performance appraisal, discipline, transfer and dismissal.”
The Arbitrator dealt with this question at [285] of her reasons. She observed that there were “only two reported instances of disciplinary problems with particular students provided by Ms McLean [the treating psychologist] and they appeared to have occurred in the first half of 2008”. The appellant appeared to have coped “reasonably well with being placed on the first pre improvement program in May 2008. She told Dr George that she quite enjoyed this because ‘the head teacher had to help me … it was really good’.” The Arbitrator said the “first real conflict appeared to occur in the meeting in August 2008”. The Arbitrator noted that the appellant was certified unfit to work in late October 2008, after the meeting in September 2008 when she was taken off her classes, and was awaiting advice of a Healthquest assessment. She did not seek treatment from a psychiatrist until November 2008.
After referring to these events, the Arbitrator concluded that the disciplinary problems, although a stressor, were “relatively minor as compared to the other work-related causal factors”.
The appellant’s submissions going to Grounds Numbered 1 and 3, other than a reference to the opinion of Dr McMahon dealing with the appellant’s perception, do not deal with the medical evidence relevant to causation.
The appellant relied on Dr Rastogi. That doctor’s opinion, on causation of the psychological injury, was ultimately not accepted by the Arbitrator ([275] of her reasons). Dr Rastogi took a history of “episodic anxiety and depression over the last two decades in the context of work related bullying and harassment by different colleagues”. She did not record any history of disciplinary or related problems as a stressor. She took an extensive history of bullying by multiple staff members.
Dr George, a psychiatrist qualified by the insurer, examined the appellant and reported on 18 December 2008. He recorded a history of the appellant’s mother’s death in December 2007, and thought the appellant had “not coped particularly well subsequently. This loss would have probably precipitated the work performance review.” His history (taken at the end of 2008) included that the appellant was a bit late with her marking, and that she was being put onto a program “to get my teaching up to scratch”. He did not record a history of disciplinary problems in the appellant’s classes.
Dr Stewart, who conducted the Healthquest examination, reported on 30 January 2009. He referred to the history of depression. He said:
“History given and medical advice indicates that Ms Edwards has been treated for depression. She does not appear to have needed extensive time off work due to this condition. It appears that she had a relapse in her condition with associated anxiety symptoms following the death of her mother and difficulty coping with some particularly difficult disciplinary problems in the classroom during 2008. The administrative issues which followed, regarding her work performance, caused her further distress and anxiety.
Since being off work in November 2008 and undergoing treatment, Ms Edwards appears to have made a positive recovery. She impressed as being highly motivated to return to work and is willing to complete the Improvement Program.”
Dr George re-examined the appellant, and reported on 20 October 2015. Again, there was no specific history of class disciplinary problems. Dr George did not, at that time, believe there was “an ongoing psychiatric disorder”. He took a history of the fall on 29 January 2010, and the resultant intracerebral haemorrhage. He said the appellant struggled to cope with teaching demands when she returned to work in late May 2010. She had difficulty with reading and comprehension. The head injury is not a subject of the current proceedings.
Dr George reported again on 24 February 2016, after a re-examination. There was an ongoing history taken, which did not focus on past events. Again, Dr George did not think there was “an ongoing functional psychiatric disorder”. He said there appeared to be “elements suggestive of a mild neurocognitive disorder”, and also of an “underlying mixed personality disorder”. He did not believe the appellant had “suffered a psychiatric disorder within the meaning of Section 11A(3) of the Workers Compensation Act 1987”. He did not believe the appellant’s employment from January 2008 to 29 November 2011 was a substantial contributing factor to the development of any psychological condition.
The appellant’s submissions refer to the report of Dr McMahon, a psychologist qualified by the insurer, dated 19 October 2015. His recorded history was of bullying by a male teacher who would push objects onto the appellant’s desk, and say negative things about her. There was a history of a lack of support by the principal in relation to this, an improvement program and meetings. He recorded that, when the appellant returned to work in mid-2010, after the fall involving an intracerebral haemorrhage, she had difficulties with vision and reading. There was no history recorded of disciplinary and associated problems being a cause of her problems.
Dr McMahon thought that the appellant had suffered an aggravation of her underlying major depressive disorder, due to the events from January to August 2008. This was in response to a question which asked whether there was psychological injury as a result of “workplace bullying” between January 2008 and August 2008. When asked to nominate the “specific events” which contributed to the development of the psychological injury, Dr McMahon referred to being performance managed, and the history of bullying and harassment by a male teacher. Dr McMahon made the comments, raised in the appellant’s submissions on appeal, regarding the possibility that the appellant “construed innocuous events as personal attacks”.
The appellant’s statement dated 14 May 2009 did not place great emphasis on disciplinary and associated pressures as a source of stress. At [8] she stated that in 2008 she had “a lot of problems with my Year 7 and Year 9 classes”. She said that after one girl, who had been sent out, was returned to her class by Ms Watson (the head teacher), the class misbehaved more. She said the misbehaving students “added to my stress”. She described getting behind with her reports, and eventually completing them late. At [15] she said:
“Once I completed the reports I felt relieved, relaxed and felt great and my brain had cleared. I also had some control back of my Year 7 and 9 classes.”
The appellant’s statement, at [16] onwards, described a series of events, from 28 May 2008 onwards, involving complaints, meetings, a pre-improvement program, a formal improvement program, and a referral to Healthquest. The appellant’s description of these events is littered with references to stress, anxiety, shock and distress. The statement does not contain further reference to stress associated with disciplinary or associated problems. Eventually, in November 2008, the appellant was given an appointment to attend Healthquest. Dr Schultz (the treating psychiatrist) wrote to the principal of Colo High School on 27 November 2008, saying that he had seen the appellant once, on that day. He said that she was experiencing anxiety symptoms, was unfit to attend work, and that he had advised her against travelling to the Healthquest appointment “next week”.
The appellant’s second statement, dated 11 November 2014, contained a reference at [34] to an interaction between the appellant and Ms Watson (the head teacher), about putting a child on detention. The appellant said that she had continuing trouble with the child, and also students in her year 9 science class. The statement did not place emphasis on these matters as a source of psychological stress. Like the earlier statement, it placed much greater emphasis on the various improvement plans, and associated alleged bullying, which subsequently occurred.
The Arbitrator engaged in a comprehensive review of the medical evidence, at [153]–[194] and [200]–[215] of her reasons. She referred in detail to the appellant’s statements. The Arbitrator, dealing with the causation issue at [279] of her reasons, specifically noted that Dr Rastogi, Dr George and Dr McMahon did not refer to disciplinary problems. However she referred to Ms McLean (who had taken a history of disciplinary problems) and to Dr Stewart’s views. She said that those practitioners saw the appellant closer in time to the events of 2008.
The appellant’s submissions on appeal at [29], dealing with the conclusion by the Arbitrator relating to the causal significance of the disciplinary problems, said:
“What the Arbitrator did not do is provide how she arrived at this conclusion given that the lack of disciplinary ability lead [sic] very quickly in 2008 to the [appellant] being evaluated by her superiors and being place [sic] on the first of her pre-improvement programs and soon after lead [sic] to her decompensating, seeking medical attention and being removed from class work. Clearly problems that she was having managing her classes and the other work associated with this was stressful to the [appellant] because she said so and her performance thereafter deteriorated sharply.”
The Arbitrator did say how she arrived at the conclusion, at [284]–[285] of her reasons. She did so by reference to the history recorded by Ms McLean, psychologist, in 2008. She did so by reference to when various events occurred, such as the development of the first real conflict, the appellant being certified unfit, and the appellant coming under the care of a psychiatrist (Dr Schultz, who she first saw on 27 November 2008).
The Arbitrator, at [268]–[270], referred to authorities on the meaning of “wholly or predominantly caused”. The Arbitrator’s conclusion on the relative importance of various causative factors involved an evaluative process. The Arbitrator concluded the disciplinary problems, as a stressor, were “relatively minor as compared to the other work-related causal factors”. The Arbitrator’s reasons at [313] referred to the appellant’s “psychiatric disability” being “entirely due to events falling within section 11A”. At [314], she made a formal finding that “the respondent’s actions taken with respect to performance appraisal, discipline, dismissal and transfer of the [appellant] were the predominant cause of the [appellant’s] psychiatric injury and were reasonable”. Given her finding that the problems with discipline of students were causative, but only to a relatively minor extent, the correct finding is that the relevant actions were the predominant cause.
On the basis of the lay evidence, including the appellant’s statements, and the medical evidence (which the Arbitrator reviewed in detail), the finding of fact which the Arbitrator made on this issue was well open to her, and disclosed no error.

The Interaction with Mr Burke

The second specific matter not falling within the scope of s 11A(1), argued by the appellant to potentially have had a significant causal role, was the appellant’s interaction with Mr Burke. The appellant submits that this interaction was upsetting to her, as she made a complaint about it. The appellant submits that this may have involved different perceptions (or misperceptions) on her part, given her psychological condition. The seriousness of the events should have been evaluated with the appellant’s underlying condition in mind.
Mr Burke was not mentioned in the appellant’s statement dated 14 May 2009. He was mentioned at [35]–[37] of the statement dated 11 November 2014. It said that Mr Burke and Mr Eggleston, two first year out teachers, started at the school, and Mr Burke harassed and bullied Mr Eggleston, which made the staffroom unpleasant. She said that Ms Watson “at times joined in the laughter”. The appellant at [35] said:
“After a few months I started doing similar things to Thomas [Burke] but nowhere to the extent that Thomas was doing. This did not slow Thomas down but caused him to add me to his victims.”
The appellant went on to say, at [36] of that statement, that “after quite a few years” she could not take Mr Burke’s bullying any longer, and made a formal complaint to the principal. She said that she was “abused” by Mr De Paoli (the principal), told that she was “as much at fault as Thomas”, and was told “if there was any more of this nonsense we would both be transferred”. The statement did not identify when these events allegedly occurred.
Dr Rastogi, Dr George, Ms McLean and Dr Stewart recorded no history relevant to the alleged bullying by Mr Burke. Dr McMahon recorded a history that “one male teacher ‘bullied me’”. He would push objects off the shelf onto the appellant’s desk and say negative things about her. He moved tables close to the wall so the appellant could not get out of her chair. There was a conversation with the principal, in which the appellant was blamed, and told “if it happens again you will be transferred out of the school”.
Dr McMahon thought there was an aggravation of an underlying major depressive disorder. Asked about the events which contributed to this, he referred to the appellant being performance managed, and “her perception of being bullied and harassed by a male teacher” (emphasis added). He commented that the appellant’s personality structure may have caused her to construe “innocuous events as personal attacks”.
There are a series of letters from Mr De Paoli to the appellant, relating to Mr Burke. The letter dated 25 September 2009 related to a complaint by the appellant of harassment, on 22 September 2009. Mr De Paoli said he visited the science faculty work station, and spoke to Ms Watson (the head teacher). It said that Ms Watson spoke to a “faculty member”, who indicated that work had been placed on that member’s desk, and it had simply been returned to the appellant’s chair. The appellant’s work station was “untidy with books, cans, papers surrounding [the appellant’s] chair”. There was a box of books under her chair. The appellant said that she was trying to tidy up. The walkway into the tea room was a “possible trip hazard”.
Mr De Paoli said that he did not believe “there is a case of harassment”, “simply a fellow worker(s) attempting to redress a work-site and re-establish some order to a work-station that has over a number of years suffered from prolonged abuse.”
Mr De Paoli wrote again to the appellant on 9 November 2009, regarding her letter dated 1 October 2009. The complaint on this occasion related to “‘the removal of two large cupcakes from the freezer … replaced with six large soft drink bottles …’ was carried out by Mr Burke.” Mr De Paoli said that he had taken a written statement from Mr Burke; food had been rearranged to fit other items in the freezer, as the appellant’s food “occupied the entire freezer”. “At no time did he have malicious intent …” Mr De Paoli said he did “not believe your claim of harassment has been substantiated”.
Mr De Paoli wrote to the appellant again on 17 November 2009. The letter referred to a formal response by the appellant to a “formal complaint lodged on 11^th November 2009”. It referred to the appellant having been advised by her psychologist to “manage the, at times, strained relationship”. It referred to the wish of both parties “to move on”. It said the appellant had stated “… Mrs Watson and my colleagues have organised everything and the situation has been fine since I returned”. The letter said in part:
“I thank you for your time and effort and explanation. I am particularly pleased that you have stated that ‘now that the situation appears to have been resolved and Mr Burke and I rarely have anything to do with each other. And he has moved away from me’. Furthermore, I have spoken to Mr Burke and he has confirmed that this is the situation at present.”

Mr De Paoli, in a statement dated 21 January 2016, said that he did not recall receiving a complaint from the appellant about Mr Burke. He said he was unaware of conflict between two new teachers which made the staff room unpleasant.
Ms Watson, in a statement dated 22 February 2016, said that she was not aware that Mr Burke was bullying the appellant. She recalled the appellant making a complaint to Mr De Paoli about Mr Burke moving something of hers in the freezer compartment in the staff room. She said this was “to make room in the freezer”. She recalled that the complaint was investigated.
These statements of Mr De Paoli and Ms Watson were referred to by the Arbitrator in her reasons.
The Arbitrator dealt with the allegations regarding Mr Burke at [211], [217], [224], [225], [228], [229] and [277] of her reasons.
Some of the matters involving Mr Burke (those mentioned in Mr De Paoli’s correspondence referred to above) occurred after 14 May 2009 (the date of the appellant’s first statement). However, the alleged bullying behaviour had, according to the appellant’s statement dated 11 November 2014, been going on for “quite a few years” before the appellant made a complaint. On that basis, the alleged bullying by Mr Burke was well established from long before the statement dated 14 May 2009 was given. The Arbitrator, at [217] of her reasons, described it as “odd that they [the alleged occasions of bullying] were not included in the first statement”.
At [224] of her reasons, the Arbitrator referred to the evidence of Ms Watson, that she was unaware of Mr Burke bullying the appellant, and that what occurred between Mr Burke and Mr Eggleston was “a form of banter and joking”, which had been misrepresented. At [225] the Arbitrator rejected, as implausible, the appellant’s evidence that Mr De Paoli threatened the appellant with a transfer, and that Ms Mahboub (Mr De Paoli’s secretary) changed the minutes of that meeting.
The Arbitrator, at [229], said that the appellant’s complaints to Mr De Paoli, regarding Mr Burke, were based on “unreliable” descriptions of what happened. The Arbitrator considered that “personality factors were involved”. When details were examined, the behaviour described as “harassment and bullying was merely a series of minor and insignificant events”. The conduct could not be “categorised as harassment or bullying”.
The Arbitrator at [277] said that it was “probable” that the man referred to in Dr McMahon’s history was Mr Burke. She referred to Mr De Paoli’s letter dated 17 November 2009. She concluded that at that point the “situation between the [appellant] and Mr Burke had been resolved”. She said:
“It seems odd that the [appellant] had told Dr McMahon in October 2015 about problems with Mr Burke that occurred in 2009 and had been resolved to her satisfaction. I do not accept that the [appellant] was ‘bullied and harassed’ by a male teacher. It is not probable, in my view, that the behaviour of Mr Burke was a causative factor in the [appellant’s] psychological injury particularly when contrasted with the other events during this period such as the pre improvement programs, the formal improvement program and the removal from classes. I find that the behaviour of Mr Burke was not a stressor or causative factor in the [appellant’s] psychological injury.”
The appellant’s submissions at [30] state that whilst the events involving Mr Burke, “to a normal person might seem minor and of no consequence”, they were significant to the appellant, and “may be an example of misperception on her part”. The appellant at the time was “not a normal person acting normally, and it is erroneous to treat her as such, whilst evaluating the impact of events”.
The appellant refers to Attorney-General’s Department v K. In a passage of that decision (quoted by the Arbitrator at [216] of her reasons) after reviewing a number of authorities dealing with the proof of psychological injury, Roche DP at [52] said:
“The following conclusions can be drawn from the above authorities:
(a)     employers take their employees as they find them. There is an ‘egg-shell psyche’ principle which is the equivalent of the ‘egg-shell skull’ principle (Spigelman CJ in Chemler [State Transit Authority of New South Wales v Chemler [2007] NSWCA 249; 5 DDCR 286] at [40]);
(b)     a perception of real events, which are not external events, can satisfy the test of injury arising out of or in the course of employment (Spigelman CJ in Chemler at [54]);
(c)     if events which actually occurred in the workplace were perceived as creating an offensive or hostile working environment, and a psychological injury followed, it is open to the Commission to conclude that causation is established (Basten JA in Chemler at [69]);
(d)     so long as the events within the workplace were real, rather than imaginary, it does not matter that they affected the worker’s psyche because of a flawed perception of events because of a disordered mind (President Hall in Sheridan [Leigh Sheridan v Q-Comp [2009] QIC 12; 191 QGIG 13]);
(e)     there is no requirement at law that the worker’s perception of the events must have been one that passed some qualitative test based on an ‘objective measure of reasonableness’ (Von Doussa J in Wiegand [Wiegand v Comcare Australia [2002] FCA 1464] at [31]), and
(f)      it is not necessary that the worker’s reaction to the events must have been ‘rational, reasonable and proportionate’ before compensation can be recovered.”
Spigelman CJ (Basten JA and Bryson AJA agreeing) in State Transit Authority of New South Wales v Chemler [2007] NSWCA 249; 5 DDCR 286 at [40] said:
“In this area of law, as in negligence, the talem qualem principle is applicable i.e. employers take their employees as they find them. With respect to psychological injury there is an ‘eggshell psyche’ principle which, like the equivalent ‘eggshell skull’ principle, is a rule of compensation not of liability. The element of foreseeability required by the law of negligence is not the basis of the ‘eggshell skull’ principle and it can be applied by way of analogy to claims for compensation under the 1987 Act. (See Morgan v Tame (2000) 49 NSWLR 21 esp at [23]–[29] and cases quoted therein. See also Tame v New South Wales (2002) 211 CLR 317 esp at [318] and Nominal Defendant v Gardikiotis (1995) 186 CLR 49 at 68.)”
The respondent, at [17] of its submissions, submits that the “alleged incident involving Mr Burke more likely than not occurred well before the period claimed by the [a]ppellant as being the period during which her psychological condition arose”. Having regard to the correspondence from Mr De Paoli in 2009, this submission is probably accurate regarding some of what the appellant alleged, but not all.
The events involving the appellant’s interaction with Mr Burke, on the available evidence, do appear (as the Arbitrator said at [229]) to be “minor and insignificant”. Applying the principles discussed in Attorney-General’s Department v K, this does not preclude the possibility that they caused or contributed to the appellant’s psychological injury, given her vulnerability. The Arbitrator at [229] referred to “personality factors” and “difficulties in maintaining interpersonal relationships with colleagues”. However, in considering whether they did contribute to the injury, there were a number of factors which the Arbitrator was entitled to take into account.
There was a history of these difficulties with Mr Burke given to Dr McMahon on 19 October 2015. They were not raised (according to the recorded histories) with Ms McLean (in 2008 and 2009), Dr George (on 18 December 2008 and 19 October 2015), Dr Stewart (on 22 January 2009) or Dr Rastogi (on 4 November 2013 and 3 March 2014). Mr De Paoli, giving his statement dated 21 January 2016, did not recall these events. Ms Watson (who was the head teacher in the department in which the appellant taught), recalled the event in which some things (probably the cupcakes) were moved in the freezer, leading to a complaint.
Mr Burke’s behaviour was not raised in the appellant’s initial statement dated 14 May 2009. According to the appellant’s statement dated 11 November 2014 at [36], the unpleasant interaction with Mr Burke had been occurring for “quite a few years” before she made a complaint about it. On the appellant’s version, Mr Burke’s behaviour was established well before the histories and statement recorded in 2008 and 2009, which did not refer to it.
Mr De Paoli’s letter dated 17 November 2009 indicated that, by that point, the situation was “resolved”, and the appellant and Mr Burke rarely had anything to do with each other. As the Arbitrator observed, it “seems odd that the [appellant] had told Dr McMahon in October 2015 about problems with Mr Burke that occurred in 2009 and had been resolved to her satisfaction”. The implication, at the least, is that the interaction with Mr Burke did not figure large in the appellant’s mind.
The Arbitrator made credit findings that she preferred the evidence of multiple witnesses to that of the appellant. These were Ms Watson (reasons at [220]–[223]), Mr De Paoli (reasons at [231]–[233]), Ms Pollett (reasons at [238]), Mr Hall (reasons at [238]) and Ms Wright (reasons at [231]). There was a credit finding at [239] of the reasons, that the Arbitrator preferred the evidence of all of these people, “where their evidence is in conflict with that of the [appellant]”.
The appellant’s statements, and recorded medical histories, contained extensive description of the improvement programs (formal and informal) and associated events, during 2008 and subsequently. By way of example, the history recorded by Dr Rastogi, under ‘Clinical Issues’, referred to the appellant feeling victimised, hopeless, traumatised, intimidated, under duress, verbally harassed and acutely anxious. Against this background, the Arbitrator made her finding at [277]:
“It is not probable, in my view, that the behaviour of Mr Burke was a causative factor in the [appellant’s] psychological injury particularly when contrasted with the other events during this period such as the pre improvement programs, the formal improvement program and the removal from classes.”
The Arbitrator approached the issue of ‘injury’ mindful of the principles in Attorney-General’s Department v K, which she quoted at [216] of her reasons. Interpersonal conflict involving the appellant and Mr Burke was a matter that the Arbitrator specifically avoided making a positive finding of, at [217]. The appellant’s evidence on this topic was essentially uncorroborated, save for Ms Watson’s mention of a complaint regarding something being moved in the staff room freezer, and the written complaints responded to by Mr De Paoli.
The Arbitrator’s finding, that the behaviour of Mr Burke was “not a stressor or causative factor in the [appellant’s] psychological injury” was open to her on the evidence, particularly given the view she had formed of the appellant’s credit.
The appellant refers to the likelihood of her misperceiving the actions of superiors, and matters such as the Healthquest delays, given her paranoid ideation. She refers to Dr McMahon’s opinion. This would be relevant in considering, consistent with Attorney-General’s Department v K, whether she had sustained psychological injury, which may result from a misperception of real events. The issue of ‘injury’ was determined in the appellant’s favour, and is not challenged on this appeal.

The Effect of the Appellant’s Condition on Credit Issues

The appellant’s submissions at [22] refer to “significant differences” between the appellant’s evidence and that of the respondent’s lay witnesses. The Arbitrator preferred the evidence of the respondent’s lay witnesses. The appellant at [23] submits:
“… the Arbitrator failed to evaluate the perceived actions of others upon the [appellant] at the school that her process of evaluation of the evidence as far as it relates to difference in the accounts is flawed and is an error of fact.”
The submission appears to be that, in dealing with the inconsistencies between the appellant and other lay witnesses, the Arbitrator should have considered the extent to which the appellant’s perception may have been flawed due to her developing psychological injury. The submission continues at [25] where, after referring to Attorney-General’s Department v K, the appellant says:
“Clearly through the evidence there was a difference of opinion as to whether or not a particular person acted reasonably or not and it is submitted that unless the Arbitrator evaluated the accounts with perception of insult in mind which she failed to do, her reasoning process was flawed and to that extent an error of fact occurred.”
The respondent at [6]–[7] of its submissions submits:
“… in assessing the actions of the [r]espondent, the Arbitrator was required to examine the facts and decide which version of events is objectively reliable. To view the conduct as it is perceived by the [a]ppellant whose evidence, the Arbitrator accepted, was unreliable, would result in the Arbitrator making a subjective assessment of the weight of the evidence, rather than an objective one.
The [r]espondent submits that the [a]ppellant’s perception of events may be relevant to the question of injury but is not relevant to the question of assessing the reasonableness of the respondent’s actions.”
I accept the respondent’s submissions on this point. In Jeffery Basten JA at [50] said of s 11A(1):
“There is a clear distinction to be drawn between a statutory test which requires an objective assessment by the Commission of the reasonableness of the action of the employer and a test by which it is sufficient for the employer to demonstrate to the Commission that, in all the circumstances, the action appeared to it to be reasonable. In my view, the present statutory provision engages the former test.”
The above was referred to with approval by Sackville AJA (Basten and Ward JJA agreeing) in Northern NSW Local Health Network v Heggie [2013] NSWCA 255; 12 DDCR 95 (Heggie) at [53]. It is consistent with the passage of Ritchie quoted at [39] above, relied on by the respondent.
Whether the respondent’s actions, taken or proposed, were reasonable within the meaning of s 11A(1), was a factual issue to be assessed objectively. The Arbitrator’s approach in dealing with this question objectively, rather than by reference to the subjective perceptions of the parties, was correct. This includes determining the factual issues relevant to reasonableness.
The respondent also submits that there was no medical evidence, contemporaneous to the 2008 events, that would have indicated to the respondent that the appellant suffered from more than “depression diagnosed towards the latter part of 2008, and the [a]ppellant’s significant physical conditions”. That is, the respondent was not on notice of the “transient paranoid ideation” subsequently commented on by Dr McMahon in his report dated 19 October 2015. It is submitted that questions of reasonableness are to be determined by the facts known to the respondent at the time, not what may have become apparent at some later stage: Heggie at [61]. I accept this submission.
For the above reasons, Ground Numbers 1 and 3 fail.

GROUND NUMBER 2 – WERE THE RESPONDENT’S ACTIONS REASONABLE?

The Appellant’s Submissions

The appellant referred to the symptoms she suffered as a result of the found psychological injury, particularly those mentioned by Dr McMahon, quoted at [31] above. She submits that her condition steadily worsened through 2008 into 2009. At the same time the appellant “came under the tighter control of her superiors”, who observed her to become “more and more difficult to deal with and irrational”. Dr Pham’s certificate dated 22 September 2008, which was given to the principal, said the appellant suffered from problems related to teaching.
The Arbitrator’s findings on ‘injury’ are that each of the meetings and improvement programs represented “substantial contributing factors to the development of [the appellant’s] condition”. The appellant submits that the respondent, acting reasonably, “should have been aware that the [a]ppellant was fragile and needed to be treated accordingly”. The appellant refers to specific meetings which occurred on 18 June 2008, 19 August 2008 and 10 September 2008. She submits that “each was an escalation of the one before it”. The meetings were imposed on the appellant in circumstances where “her health was deteriorating and the School should have known it”.
The appellant submits that, by the time of the September 2008 meeting, the respondent should have known, through Ms Watson or Ms Wright, that the appellant was “progressively more fragile and that her work performance was not improving”. That meeting, with so many senior employees of the respondent present, “would, at the very least, be intimidating”. It was an unreasonable approach, akin to a manager shouting at someone.
The appellant submits:
“If one accepts that the test of what is reasonable or not is objective and a decision is reached after weighing all of the relevant factors it is submitted that the behaviour of the [r]espondent at least from September 2008 onwards cannot be considered to be reasonable behaviour on its part towards the [a]ppellant.”
By the time of the meeting on 5 November 2008, the appellant “was extremely upset”. The appellant submits that:
“To deal with a psychiatrically ill person in the manner that Ms Pollett and Mr Hall did given what the school knew by that time about the [a]ppellant’s condition is not reasonable and to find otherwise is an error of fact.”
The appellant submits that to order a teacher of the appellant’s experience from the school cannot be considered reasonable behaviour.
The appellant additionally submits that the respondent is a large public institution, and should:
“… at least have had access to proper advice as to how to deal with persons suffering symptoms of a psychiatric nature such as the [a]ppellant to avoid further injury being sustained.”
The appellant refers also to the correspondence in November 2011, informing the appellant she was to be placed on a confidential ‘not to be employed’ list, submitting:
“Such a dismissal of a teacher of the [a]ppellant’s standing in such a manner is clearly unreasonable and to find otherwise [is] an error of fact.”

The Respondent’s Submissions

The respondent submits that the appellant continues, in the submissions on this ground, to rely on her own version of events. “The Arbitrator did not accept her version of events as reliable.”
The respondent submits that the Arbitrator was required to deal with a difficult situation. The appellant was a:
“seriously underperforming teacher about whom parental complaints had been made and whose performance had come to the attention of her superiors. In conducting themselves, the [r]espondent’s employees were required to give regard to occupational health and safety issues but were also required to balance those against the needs of the educational requirements of the students and the employer. There is no other process that the [a]ppellant suggests that would have been reasonable other than to conduct the meetings in a manner different to the version given by the [a]ppellant.”
It submits that it had “no other choice than to introduce the disciplinary process in accordance with its policies and in the manner and at the time that it did”.
The appellant was requested to leave the school in November 2008 as she was “not in a position to remain safely”. It was reasonable to ask her to leave “until appropriate medical assessment and clearance could be obtained”.
The respondent suggested the possibility of medical retirement against a background of the appellant “advising that she was not coping”. This was “hardly an inappropriate response”.
The respondent submits that it relies on Ritchie (quoted at [39] above). It also submits that the question of reasonableness is to be determined by reference to the facts known to the respondent at the time of the relevant actions, not by reference to facts which became apparent at a later time (Dr McMahon’s opinion on the appellant’s personality disorder and her proneness to misinterpret events).

The respondent submits that the Arbitrator’s finding on ‘reasonableness’ was a finding she was entitled to reach. She applied the relevant principles and determined the issue correctly.

Discussion

The employer carries the onus of establishing a defence based on s 11A(1): Department of Education and Training v Sinclair [2005] NSWCA 465; 4 DDCR 206 (Sinclair) at [18]–[19], Heggie at [54]. The test of reasonableness requires an objective assessment by the Commission. In Jeffery (a case involving ‘transfer’) Basten JA at [50] said:
“If it were sufficient that the employer took action because it appeared to the employer, on grounds upon which it was reasonable to rely, to be reasonable action, the legislature could have said so. However, it did not. In my view, if, in the view of the Commission, the action taken by the employer in transferring an employee is not reasonable in all the circumstances, the employer cannot rely upon s 11A because it held a genuine belief, based on reasonable grounds, that its action was reasonable.”
In Sinclair, a case involving ‘discipline’, Spigelman CJ (Hodgson and Bryson JJA agreeing) at [96]–[97] said:
“96 Furthermore, the case before Sheahan J primarily focused on the whole course of Departmental conduct as constituting the relevant ‘substantial contributing factor’ for purposes of s9A. His Honour appeared to approach the s11A issue on the same basis. This is an appropriate course to adopt in a context concerned, and concerned only, with psychological injury arising from matters such as ‘demotion, promotion, performance, appraisal, discipline, retrenchment or dismissal’. Such actions usually involve a series of steps which cumulatively can have psychological effects. More often than not it will not be possible to isolate the effect of a single step. In such a context the ‘whole or predominant cause’ is the entirety of the conduct with respect to, relevantly, discipline.
97 His Honour’s analysis, as that of the Arbitrator, appears to assume that any specific blemish in the disciplinary process, however material in a causative sense or not, was such as to deprive the whole course of conduct of the characterisation ‘reasonable action with respect to discipline’. In my opinion, a course of conduct may still be ‘reasonable action’, even if particular steps are not. If the ‘whole or predominant cause’ was the entirety of the disciplinary process, as much of the evidence suggested and his Honour appeared to assume, his Honour did not determine whether the whole process was, notwithstanding the blemishes, ‘reasonable action’. For this alternative reason the appeal should be allowed.”
In Heggie Sackville AJA (Basten and Ward JJA agreeing) at [61] said:
“In my opinion, the better view is that the reasonableness of an employer’s action for the purposes of s 11A(1) of the WC Act is to be determined by the facts that were known to the employer at the time or that could have been ascertained by reasonably diligent inquiries.”
In Commissioner of Police v Minehan [2003] NSWCA 239 (Minehan) Foster AJA (Sheller and Santow JJA agreeing) cited with approval a passage from a decision of Geraghty J in Irwin v Director-General of School Education (unreported 18 June 1998):
“The question of reasonableness is one of fact, weighing all the relevant factors. The test is less demanding than the test of necessity, but more demanding than a test of convenience. The test of ‘reasonableness’ is objective, and must weigh the rights of employees against the objective of the employer. Whether an action is reasonable should be attended, in all the circumstances, by a question of fairness.”
In Heggie Sackville AJA said the above passage from Minehan needed to be understood in the context of the facts of the particular case. His Honour at [59] distilled the following from the passage:
“The assessment of reasonableness should take into account the rights of the employee, but the extent to which these rights are to be given weight in a particular case depends on the circumstances.”
The Arbitrator, at [309] of her reasons, found:
“The series of actions by the respondent which led to the [appellant’s] psychological injury are appropriately characterised as action with respect to performance appraisal, discipline, dismissal and transfer.”
The appellant has not challenged the characterisation of the actions in this way. These various classes of action all fall within s 11A(1) of the 1987 Act. It should be noted that, to the extent to which the appellant’s disciplinary problems with her classes were causative of the injury, this did not fall within the classes of action described in s 11A(1) (see [15] above).
The respondent submits that its actions were taken in response to a “difficult situation”. The appellant was “seriously underperforming”, there had been parental complaints, it needed to balance the appellant’s occupational health and safety issues against the educational needs of the students and the employer.
The appellant’s submissions do not assert that the taking of action by the respondent, in the circumstances, was not reasonable. The appellant specifically referred (without criticism) to the Arbitrator’s reasons at [87], which deal with the meeting on 18 June 2008, involving the appellant, Ms Wright (the deputy principal) and Ms Watson (the head teacher, science). The paragraph reads in part:
“Ms Watson said that the [appellant] acknowledged that she felt under stress during Semester 1 and stated that she had lots of problems and had been working terribly inefficiently.”
There is a considerable body of evidence dealing with the nature of the situation the respondent was faced with, by 2008. Mr De Paoli’s statement dated 20 May 2009 said that:
“… [f]rom about 2002 there have been regular complaints from parents, students and Head Teacher Science, Christine Watson, regarding [the appellant’s] lack of meeting her obligations as teacher such as classroom management, non completion of her marking and reports by the due dates, poor lesson preparation and lesson delivery, inappropriate behaviour with her students.”
Mr De Paoli said that in 2008 “the complaints about [the appellant] continued and became more frequent”. There is a body of material, following Mr De Paoli’s statement, in the factual investigation report dated 22 May 2009. One of the documents is headed “Compilation of incidents or inappropriate comments and behaviour towards students over a prolonged period of time”. It refers to eight events, the last three of which occurred between March 2008 and May 2008. These are set out in the Arbitrator’s reasons at [145]. The material includes copies of letters, or records, of complaints from parents. They extend beyond those in the “compilation”.
Ms Wright, in her statement dated 18 May 2009, said that Ms Watson, since approximately 2006, regularly informed her that there were work performance issues with the appellant, “in relation to her classroom management, planning of units of work and therefore lessons, not meeting deadlines for reports and not meeting deadlines for marking of work in the first place”. Ms Wright said:
“In the first half of 2008 there was an increase of complaints from students and parents regarding student progress in [the appellant’s] classes and her classroom management. During the same period [the appellant] failed to complete her marking and student reports by the due dates. I also reviewed [the appellant’s] TARS [Teacher Assessment and Review Schedule] for the previous 3 or 4 years which consistently showed issues relating to her classroom management and completion of marking and reports.”
The appellant’s statement dated 14 May 2009 said she was diagnosed with diabetes, type 2 at the end of term 1, 2008. She said that tests, during the holiday between term 1 and term 2, caused her body to become exhausted. She said that she was very tired at the commencement of term 2, and fell behind in preparation and marking. She struggled to get her reports done, and completed them late. She said that when the reports were completed she was “relieved, relaxed and felt great”. She said her meeting with Mr De Paoli on 28 May 2008, at which she was given a letter setting out complaints about her and her teaching over the previous eight years, came “out of the blue at a time that I was quite happy”.
The respondent’s submission that, by May 2008, there was a difficult situation which needed to be addressed, was justified. The appellant’s submissions do not dispute the fact that it was reasonable for some action to be taken by May 2008. Rather, her submissions focus on the reasonableness (or alleged lack of it) of how the process was implemented.
The initial relevant meeting was that involving the appellant, Ms Wright and Ms Watson, on 18 June 2008. Ms Wright described it as “an informal discussion to assist her”. The appellant acknowledged “lots of problems” and “working terribly inefficiently”. She was told she would be placed on an informal support program. She was provided with “some release from face to face teaching”. The appellant, in her statement dated 14 May 2009 at [20], said that she was “actually happy to be on this program”, as she would “receive assistance and support from Christine Watson”.
Ms Wright noted that use of the informal program was, consistent with the respondent’s Teacher Improvement Policy, to be “offered and implemented prior to any formal program being considered”. It is true, as the appellant submits on this appeal, that the respondent by this point knew that the appellant was struggling. That is why the program was put in place.
The appellant, in her statement dated 14 May 2009 at [21], said that the program “dragged on” for more than three weeks. She said that Ms Wright carried out observations of her classes and provided her with feedback and observations, which were “helpful and constructive”. She said that Mr Coleman (a deputy principal) did not do all of his class observations, and did not provide feedback.
By mid-August 2008, Mr De Paoli decided that, given the appellant’s lack of significant improvement, she would be placed on a Formal Improvement Program. There was a meeting on 19 August 2008 where the appellant was informed of this. According to Ms Wright the appellant was “not happy” about being placed on a formal program, but did not raise any issues about her health at this meeting.
On 19 August 2008 the appellant met with Mr De Paoli, Ms Wright and Ms Watson. Mr De Paoli discussed the appellant’s ongoing difficulties, told her that she had failed the pre-improvement program, and informed her she would be placed on a Formal Improvement Program for 10 weeks. He advised her that the contents would be developed, and a further meeting would be held. The appellant, in her statement dated 14 May 2009 at [24], referred to a meeting in mid-August 2008. She said that she asked Mr De Paoli whether she could wait a few weeks to start the program, because she needed to sort out her diabetes. The appellant said that Mr De Paoli said no, then referred to medical retirement and Healthquest because of diabetes, and getting a doctor’s certificate about her conditions. The appellant’s description of this meeting is similar to the meeting described by others (Ms Wright and Mr De Paoli) as occurring on 10 September 2008.
There was a meeting on 10 September 2008. Present (according to Ms Wright) were Mr De Paoli, Ms Watson, Ms Wright, and Ms Biddle (from the Teachers Federation, there as a support person). The appellant was informed that the Formal Program would commence from 17 September 2008, and “go for 10 weeks”. The appellant at that stage, “expressed concerns about her health which she said had affected her work performance”. Mr De Paoli informed her that she should seek medical advice, and mentioned the possibility of “medical retirement” if the appellant’s health was affecting her work performance.
Mr De Paoli said that the appellant, on 11 September 2008, gave him a report outlining her health history. The material from the school, attached to the factual investigation report, includes a report from Dr Pham, the appellant’s general practitioner, dated 11 September 2008. I infer this was the document provided to Mr De Paoli on that date. It described the appellant as a person “who suffer[s] from Depression which would affect her capacity to deal with the stress involved in her job as a teacher”. The “Past History” set out referred to gastric banding, depression, hypertension, obesity, gastro-oesophageal reflux, seborrhoeic dermatitis and diabetes mellitus. The reference to depression in the past history was next to the date 4 May 2007.
Mr De Paoli stated that, “[i]n view of the medical report, the Formal Improvement Program for [the appellant] was not commenced”. He said that he referred the medical report, with a covering letter, to Mr Hall, Staff Support Officer, for the appellant “to be assessed by Healthquest for her fitness to continue working as a teacher”.
Mr De Paoli stated that on 16 September 2008 he spoke to the appellant, and told her he had spoken to Mr Barnes, from the Teachers Federation, who suggested that “the Teachers Federation Welfare Officer be involved”.
The appellant met with Mr De Paoli and Ms Watson on 22 September 2008. Also present were Mr Hall and Mr Cramer (staff support officers) and Ms Biddle. Mr De Paoli stated that, in view of the “doctor’s letter”, and pending a Healthquest assessment, the appellant was told that the Formal Improvement Program would be suspended, and she would be placed on “approved suitable duties” at the school. The appellant described herself as being “shocked and distressed”, and said she felt concerned about her classes, particularly Year 10 who were about to sit the School Certificate.
The appellant then carried out suitable duties for a period, apparently with some absences. Mr De Paoli stated that during October 2008, he asked the appellant “to sign an authority for Andrew Hall to speak to her doctor regarding her health and suitable duties that she can do, which she refused.”
There was a further meeting on 5 November 2008, involving the appellant, Mr Hall and Ms Pollett. Mr Hall stated that the appellant said that she did not have any medical certificates for her absences. She then “spoke about all the issues”; the Improvement Program; the wait to see Healthquest, and her issues with Mr Coleman.
Mr Hall said that the appellant was asked to sign an Injury Management Consent Form, so that a return to work plan could be developed, after discussion with Dr Pham regarding her restrictions. He said the appellant refused to sign such a document, and became “agitated, angry and hostile”. He said that Ms Pollett told the appellant that she should leave the school, “for her own safety”, as there was “no return to work plan and no set suitable duties had been identified”. He said the appellant became “more agitated and hostile”, questioning why she could not remain at the school. Eventually the appellant signed the consent form and left the school.
Mr De Paoli’s statement indicates that the appellant resumed some selected duties from 12 November 2008. Her attendance appears to have been sporadic, and she ceased performing such duties from 26 November 2008.
The appellant was assessed by Dr Stewart and Ms Berg (a psychologist) on 22 January 2009, on behalf of Healthquest. Dr Stewart reported to the respondent on 30 January 2009. The report said:
“Since being off work in November 2008 and undergoing treatment, [the appellant] appears to have made a positive recovery. She impressed as being highly motivated to return to work and is willing to complete the Improvement Program.”
Dr Stewart’s “Final Recommendations” were:
“1. Ms Edwards is FIT for the full range of duties of the substantive position of Classroom Teacher.
2. Ms Edwards is fit to participate in an Improvement Program.”
The appellant stated that she resumed work in week 3 of term 1 of 2009, when the Healthquest result was provided to Mr Hall. She was placed on another Pre-Improvement Program. Mr De Paoli stated that this was on advice from Mr Hall and EPAC, “in view of [the appellant’s] health concerns in late 2008”.
The appellant stated that she was not told the result of her Pre-Improvement Program until Term 2, as Mr De Paoli went overseas. Mr De Paoli said there was a meeting on 11 May 2009, involving himself, the appellant, Ms Wright and Ms Watson. He said there was “positive feedback as well as areas still for concern”. The appellant was told she was required to go on a 10 week Formal Program of Improvement, which would commence when it was finalised by EPAC. He said that the appellant attacked him and kept yelling at him. She said the delay had caused her great stress and she would not survive financially if she had to retire, and it was his fault if it ended her career. Mr De Paoli described the appellant as “very upset”, “talking to herself and appeared quite agitated”. The appellant thereafter continued at work.
Material from the school indicates that the appellant took part in an Improvement Program from July to November 2009. A Principal’s Report dated 17 November 2009, at the completion of that program, said that the appellant had “failed to respond adequately and make the necessary improvement” in four areas discussed in the report. It recommended that the appellant “be granted the six week extension period to do so”.
On 29 January 2010 the appellant, at work, suffered a fall referred to above, sustaining a left sided intracerebral occipital haemorrhage. She next resumed work on 10 June 2010. A Principal’s Report dated 28 February 2011, signed by Mr De Paoli, indicates that, following a meeting on 9 June 2010, a Further Improvement Program commenced on 19 July 2010. Although there were some absences, the appellant continued in the program until about 2 August 2010. She then was off work until 1 September 2010, when she advised that she would not return before the end of term. The appellant stated that on 1 September 2010 she was “advised that I had failed the Program”.
A meeting involving the appellant, Mr De Paoli, Ms Molluso (School Education Director) and Mr Cramer was held on 28 February 2011. The recommendation set out in the Principal’s Report was that “the program is deemed unsuccessful and the case immediately referred for independent review”.
Mr Phipps, the Regional Director, Western Sydney, wrote to the appellant on 28 February 2011, advising that the principal had recommended determination of her efficiency as “not satisfying requirements for the position held”. The matter was referred for independent review. The appellant was directed to report to Penrith Regional Office from 1 March 2011 “to perform alternative duties until further notice”. An independent review dated 3 May 2011 indicated that correct procedures had been followed, and that the appellant had “failed to meet the level of performance required”.
Mr Phipps wrote to the appellant on 29 August 2011, saying that he was “considering imposing disciplinary action” and giving the appellant an opportunity to make a submission and provide additional information. He then, apparently in response to a request from the appellant, gave her an extension until 21 October 2011 to make a submission. On 9 November 2011, Mr Phipps wrote to the appellant advising that he had decided to dismiss her, with effect from 10 November 2011.
On 12 December 2011, Mr Phipps wrote to the appellant advising her that she was granted “limited casual approval” in “Biology and Science 7 –10”, for two terms from the commencement of Term 2, 2012. Consideration would be given to extending this casual approval at the end of that time, if the appellant provided evidence of successful teaching experience from two principals.
The appellant’s submissions on appeal focus on the alleged level of knowledge that the respondent had, or should have had, of the appellant’s psychological vulnerability, during the process. The appellant specifically refers to the following:
(a)     The appellant’s condition steadily worsened throughout 2008 and on into 2009 and beyond. She came “under the tighter control of her superiors”, who observed her to become more difficult and irrational. The appellant, in this regard, refers to “the evidence of the various witnesses relied upon by the [r]espondent”.
(b)     On 18 June 2008, at a meeting with Ms Wright and Ms Watson, the appellant said that she had lots of problems and had not been working efficiently. This it is submitted, put Ms Wright on notice that the appellant was struggling.
(c)     At a meeting on 19 August 2008, when the appellant was advised that a formal improvement program would be developed for her, she was “not happy”.
(d)     At a meeting on 10 September 2008, when the appellant was advised about the formal improvement program, she objected to being placed on it. She said she had concerns about her health. Mr De Paoli said that the appellant should seek medical advice. There was also reference to whether, if the appellant’s health was affecting her work performance, she should explore the possibility of medical retirement.
(e)     Dr Pham’s certificate dated 22 September 2008 said the appellant was “suffering relating to problems with her teaching”. This was handed to Mr De Paoli.
(f)      At a meeting on 5 November 2008, the appellant was “extremely upset”.
(g)     The respondent, as a large public institution, should have had access to proper advice, in how to deal with people suffering from psychiatric symptoms.

The appellant’s submission, in general terms, is that, given her psychiatric condition, what may have been reasonable action, if dealing with a less vulnerable person, was not reasonable action in her case. This submission was put at the arbitration hearing (4.4.16, T64.31–71.8), and is referred to in the Arbitrator’s reasons (at [265]), as is the respondent’s submission that the appellant “could not rely on the notion of perception to succeed against a section 11A defence” (at [266]). On specific query, the appellant’s counsel was unable to refer the Arbitrator to any authority in support of the submission.
The Arbitrator did not, in her reasons going to s 11A(1), specifically deal with this argument. She did not specifically accept it. She referred to the objective nature of the test, citing Jeffery (her reasons at [289]). She analysed the evidence relevant to the reasonableness in an objective fashion.
I accept the submission that, in considering whether the actions or proposed actions of an employer are reasonable within the meaning of s 11A(1), it is appropriate to have regard to the circumstances of the worker. This is consistent with the passage from Minehan (quoted at [125] above). Within the more restricted operation of that passage, as stated in Heggie (quoted at [126] above), it remains necessary to take into account the rights of the employee, although the weight to be attached to that consideration will depend on the circumstances. The circumstances of the employee include health considerations.
To take an extreme example, if a one legged teacher was placed on an improvement program which involved standing in front of a class for five hours per day, this may be unreasonable having regard to his or her circumstances, although it may be reasonable for a teacher without such a disability. On the other hand, if a teacher, due to a psychological condition, was an imminent and serious physical danger to students, it may well be that the employee’s rights in those circumstances would be entitled to less weight. This does not involve departing from the principle that the test is to be applied objectively. Rather it involves assessing the reasonableness of action or proposed action in the particular circumstances, consistent with the principle stated at [59] in Heggie.
The appellant’s submission, based on this proposition, was put at some length before the Arbitrator. Whilst the Arbitrator did not specifically deal with the submission, it appears that she dealt with the issue of the reasonableness of the respondent’s actions and proposed actions in a way consistent with it.
At [296] of her reasons, the Arbitrator dealt with the appellant being taken off her classes and placed on suitable duties, at the meeting on 22 September 2008. The Arbitrator said:
“I consider that an adequate explanation was given to the [appellant] for her being taken off classes on 22 September 2008. The respondent provided the [appellant] with approved suitable duties. The [appellant] had provided the respondent with a medical certificate stating that the [appellant] was suffering from depression ‘which would affect her capacity to deal with the stress involved in her job as a teacher’. The respondent owed the [appellant] a duty of care and in these circumstances had no reasonable alternative but to place or transfer the [appellant] onto suitable duties which would avoid the stress that she might experience as a teacher. I consider that the respondent’s actions were reasonable.”
The Arbitrator dealt with the direction of Ms Pollett to the appellant, to go home on 5 November 2008. At [299] of her reasons the Arbitrator said:
“The [appellant] had told Ms Pollett and Mr Hall at the meeting that her doctor had told her that she should not even be there because she was too unwell. In those circumstances and in view of the behaviour of the [appellant] and her distress during the meeting, it was reasonable for Ms Pollett to direct her to leave the school and to go home. I am satisfied that Ms Pollett and Mr Hall dealt with the [appellant] in a fair and professional manner in the meeting.”
In a similar vein, at [311] of her reasons, the Arbitrator said:
“Placing the [appellant] on the pre-improvement plans and then eventually the formal improvement plan was appropriate and fair. The respondent had a duty to ensure that teachers were competent and met the required levels of performance. The respondent’s actions in attempting to improve the [appellant’s] level of performance as a teacher were comprehensive and, in my view, involved genuine attempts to address the [appellant’s] problems as a teacher.”
The analysis set out in the preceding paragraph is consistent with the passage quoted in Minehan, referred to above. The Arbitrator weighed the rights of the employee against the objective of the employer. She did so by specific reference to concepts of fairness. The passages from [296] and [299] of the reasons, quoted above, demonstrate that the Arbitrator analysed the concept of whether the respondent’s behaviour was reasonable, by specific reference to the fact that it was dealing with an employee who was affected by a psychological condition.
The appellant, in support of its argument on this issue, sought to rely on the knowledge the respondent had, from time to time, of her situation. This ultimately does not much assist the appellant’s argument.
The submission referred to at [160(a)] above is unhelpful, given its failure to refer to any specific evidence. It is unclear which of the witnesses allegedly observed that the appellant became more difficult and irrational with the passage of time. The reference to the “tighter control of her superiors”, similarly, is unhelpful. It does not refer to specifics. It is unsurprising that the appellant had more contact with other teachers and her superiors, whilst she was on a program which involved her observing other teachers, and others observing her, with a view to improvement of her teaching abilities.
At (b) of that paragraph, reference was made to the meeting on 18 June 2008. It is said the respondent was placed on notice that the appellant was “struggling”. This much was apparent from the fact that the appellant was being placed on the Pre-Improvement Program. It does not necessarily indicate that the appellant was struggling emotionally. It does not put the appellant on specific notice that the appellant was suffering from a psychological condition.
At (c) of the paragraph, there is reference to the meeting on 19 August 2008, at which the appellant was said to be “not happy”. This reference, in context, is to be found in the statement of Ms Wright, which at [22] said the appellant “was not happy about being placed on a Formal Program as she alleged that she had not been provided with regular feedback regarding the Informal/Pre-Program Support”. It is not necessarily a reference to the appellant’s emotional state.
At (d) of that paragraph, there is reference to the meeting on 10 September 2008, when the appellant said that she had concerns about her health. On the evidence, the respondent responded to this specific situation when it was raised. Mr De Paoli said he told the appellant that, if her health was being affected, she should consult her doctor and consider her future plans in teaching. On 11 September 2008 the appellant provided Mr De Paoli with the report of Dr Pham of that date (referred to at (e) of [160]). This included the reference to depression affecting the appellant’s capacity to deal with the stress of teaching. The respondent responded to this by not proceeding with the commencement of the Formal Improvement Program, and arranging a referral to Healthquest to ascertain the appellant’s fitness to continue working as a teacher.
At (f) of that paragraph, the appellant refers to the appellant being “extremely upset” at a meeting on 5 November 2008. This was the meeting where Mr Hall and Ms Pollett sought to have the appellant sign a consent form so that they could discuss her condition with Dr Pham. According to Mr Hall, he told the appellant that a Return to Work Plan needed to be developed, as she was back at work without such a plan. The context of this meeting, based on the lay evidence which the Arbitrator accepted, was an attempt by the respondent to access the views of the appellant’s general practitioner, to assist in complying with its return to work obligations. The appellant initially refused to sign a consent form, and appears to have become agitated while this was being discussed.
At (g) of that paragraph, the appellant submits that the respondent, as a large institution, should have had access to “proper advice” in dealing with people with psychiatric symptoms. It was not submitted, before the Arbitrator, that the respondent’s actions were not reasonable within the meaning of s 11A(1), due to a failure to arrange or take advice on dealing with people with psychiatric symptoms. The appellant should not be permitted to raise this specific submission for the first time on appeal: Metwally v University of Wollongong [1985] HCA 28; 60 ALR 68; 59 ALJR 481 at [7].
For the sake of completeness, it should be noted that, when the appellant’s health was raised with Mr De Paoli, and he was given a report from Dr Pham setting out multiple health problems, he arranged a referral to Healthquest. It was only when the resultant report indicated that the appellant was fit for the full duties of a classroom teacher, and an Improvement Program, that the respondent again put an Improvement Program in place.
The above are consistent with the respondent, when the appellant’s psychological condition was raised as an issue, being responsive to it.
The appellant’s submissions also make reference to the view of Dr McMahon, that the appellant may construe “innocuous events as personal attacks”, and “may misperceive the actions of others by transient paranoid ideation”. This medical opinion was first available to the respondent when Dr McMahon’s report, dated 19 October 2015, was supplied to its solicitors. It was not a fact known to the respondent at the time of the relevant actions or proposed actions, nor was it a fact that could have been ascertained at that time by reasonably diligent inquiries: Heggie at [61], quoted at [124] above. The reasonableness of the respondent’s actions or proposed actions is not to be assessed on the basis of knowledge of the opinion of Dr McMahon, which it did not have at the relevant time.
The Arbitrator referred to authorities relevant to s 11A(1). She applied the principles to be found in those authorities. This included considering whether the respondent’s actions or proposed actions were reasonable, in the context of dealing with an employee who suffered from psychological difficulties. She carefully analysed the lay and medical evidence in detail. Consistent with Sinclair at [96], the Arbitrator considered the reasonableness of the whole course of the conduct. Her conclusion, going to whether the actions or proposed actions of the respondent were reasonable, was clearly open, and was supported by the preponderance of the evidence. Her finding on this issue was not in error (see Raulston v Toll Pty Ltd [2011] NSWWCCPD 25 at [19]).
Ground Number 2 fails.
It follows that the appeal is unsuccessful.

DECISION

The identity of the respondent is amended to “Secretary, Department of Education and Communities”.
The Arbitrator’s determination dated 3 May 2016 is confirmed.

Michael Snell
Deputy President

14 September 2016