Fry v Secretary, Department of Education

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Fry v Secretary, Department of Education [2025] NSWPIC 79
APPLICANT:	Rachelle Fry
RESPONDENT:	Secretary, Department of Education
MEMBER:	Rachel Homan
DATE OF DECISION:	10 March 2025
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987; claim for weekly compensation and incurred treatment expenses for two psychological injuries; defence pursuant to section 11A(1) raised in respect of second injury; whether incapacity relates to first or second injury; Held – the respondent failed to discharge its onus with respect to section 11A(1); incapacity resulted from both injuries; at parties’ request further opportunity provided to lodge signed consent orders quantifying the entitlement to weekly compensation; general order for medical expenses.
DETERMINATIONS MADE:	The Commission determines: 1. The injury deemed to have occurred on 16 November 2022 was not wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the respondent with respect to transfer, discipline and/or dismissal for the purposes of s 11A(1) of the Workers Compensation Act 1987. 2. In the period since 1 February 2023, the applicant has been incapacitated as a result of both the injury deemed to have occurred on 2 August 2022 and the injury deemed to have occurred on 16 November 2022. The Commission orders: 1. The respondent to pay the applicant’s reasonably necessary medical and related treatment expenses in accordance with s 60 of the Workers Compensation Act 1987 upon production of accounts, receipts and/or Medicare notice of charge. 2. The parties to file signed consent orders resolving the claim for weekly compensation on or before 24 March 2025. 3. In the event the parties are unable to reach agreement with respect to the claim for weekly compensation, detailed amended wages schedules are to be served and lodged on or before 31 March 2025, following which the matter is to be listed for further preliminary conference. A brief statement is attached setting out the Commission’s reasons for the determination.

STATEMENT OF REASONS

BACKGROUND

Ms Rachelle Fry (the applicant) was employed by the Department of Education (the respondent) as a special educator.
The applicant claimed compensation for a psychological injury arising out of or in the course of her employment with a deemed date of 2 August 2022. Liability for that injury was initially accepted by the respondent’s insurer.
Liability to pay ongoing compensation in respect of the injury was subsequently disputed in a notice issued pursuant to s 78 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) on 10 October 2023, on the ground that the injury had resolved. That decision was maintained following internal review in notices issued on
15 February 2024 and 22 October 2024.
A second claim for compensation was made in respect of a psychological injury deemed to have occurred on 16 November 2022. Liability to pay compensation in respect of the second injury was disputed in a notice issued pursuant to s 78 of the 1998 Act on 15 December 2022, on grounds that included that the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by the respondent with respect to discipline, transfer and/or dismissal under s 11A(1) of the Workers Compensation Act 1987 (the 1987 Act).
The decision to dispute liability in respect of the second psychological injury was maintained in a further s 78 notice issued on 20 June 2023 and following internal review in notices issued on 26 July 2023, 15 February 2024, and 22 October 2024.
The present proceedings were commenced in the Personal Injury Commission (Commission) by lodgement of an Application to Resolve a Dispute (ARD) on 1 November 2024.
The applicant seeks weekly compensation for various periods from 1 February 2023 onwards as well as general medical and related treatment expenses. The applicant relies on both the injury deemed to have occurred on 2 August 2022 and that deemed to have occurred on
16 November 2022.

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION

The parties appeared before the Commission for conciliation conference and arbitration hearing on 10 February 2025. The applicant was represented by Mr Graham Barter of counsel instructed by Mr Digby Dunn. The respondent was represented by Mr Brendan Jones of counsel instructed by Ms Katelyn Cant.
The parties were unable to reach agreement. Having regard to the complexities of the claim for weekly compensation, the parties agreed that the Commission should make determinations in respect of the liability disputes. In the event that those disputes were resolved in favour of the applicant, it was agreed that the parties would be offered a further opportunity to file consent orders resolving the claim for weekly compensation. In lieu thereof, the matter would be listed for further preliminary conference.
It was also agreed that a general order for payment of the applicant’s reasonably necessary medical and related treatment expenses on production of accounts, receipts and/or Medicare notice of charge ought to be made if the applicant were to succeed.
I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.

ISSUES FOR DETERMINATION

The parties agree that the following issues remain in dispute:
(a) whether the injury deemed to have occurred on 16 November 2022 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, discipline and/or dismissal pursuant to s 11A(1) of the 1987 Act;
(b) the extent to which any incapacity in the periods from 1 February 2023 onwards resulted from:
(i)the injury deemed to have occurred on 2 August 2022; and
(ii)the injury deemed to have occurred on 16 November 2022;
(c) the quantification of any incapacity, and
(d) the entitlement to medical and related treatment expenses pursuant to s 60 of the 1987 Act.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)    ARD and attached documents;
(b)    Reply and attached documents;
(c)    documents attached to an Application to Lodge Additional Documents lodged by the applicant on 23 January 2025;
(d)    documents attached to an Application to Lodge Additional Documents lodged by the respondent on 3 February 2025, and
(e)    an amended wages schedule lodged by the applicant on 10 February 2025.
Neither party applied to adduce oral evidence or cross-examine any witness.

Applicant’s evidence

The applicant’s evidence is set out in written statements made by her on 1 September 2023, 29 January 2024 and 22 August 2024.
In her first statement, the applicant stated that she had been employed by the respondent as a special educator for over 27 years. The applicant commenced employment as a casual teacher before being offered a permanent position at Great Lakes College Forster Campus as a classroom teacher in the Support Unit.
In 2012, the applicant was appointed the Head Teacher of Special Education and, in 2022, was appointed the Deputy Principal Support and Inclusion.
The applicant worked with students with a variety of disabilities and disorders. The applicant frequently worked 60 to 70 hours per week. The applicant described a number of challenges associated with her role including, violent assaults threats and verbal abuse. The applicant said she had an exceptional reputation, had taken minimal leave and had not been the subject of any formal complaints over the course of her 27 years of employment.
The applicant said that in the middle of 2022, a conflict developed between the applicant and some staff members with whom she had worked for many years and with whom she had developed relationships of trust and friendship.
The conflict involved petty disgruntlement about some planned changes to seating and office arrangements but escalated to malicious gossip and the applicant being ostracised by some staff members.
By August 2022, the conflict escalated further with a complaint being lodged in which a number of “false and malicious” accusations were made against the applicant.
The applicant said she was not informed of the details of the accusations and so could not address them immediately or clear up any misunderstandings. The applicant was only informed, in general terms, that complaints and accusations had been made, which would be investigated.
The applicant said she felt upset and had a deep feeling of betrayal. The applicant was confused and distressed and was not coping. The applicant’s doctor put her off work for four days.
The next day, the applicant received a phone call informing her that a close colleague and fellow Deputy Principal had died suddenly of a heart attack. The applicant went into school to support her faculty. When she returned to work a few days later, her relationships with the antagonistic staff did not improve. Other staff members began to ignore the applicant. There were times when she would walk into a room and staff would stop talking and blush when the applicant approached.
The applicant remained unaware of what she had been accused of and continued to consult her doctors and psychologist regularly.
On 19 August 2022, the applicant received a letter of allegations which was still expressed in very general and vague terms. It was impossible for the applicant to refute the allegations or prove her innocence. The applicant was shocked and horrified at the nature of the allegations.
The workplace became difficult to manage due to the gossip and because the applicant was still unaware of the details of the allegations. The applicant felt unsupported by the Principal with regard to the gossip and bullying to which she was being subjected.
On 16 November 2022, the applicant was placed on alternative duties and told she was unable to enter school grounds. The letter informing her of this described the applicant as a “risk to the department”. The applicant commented,
“This horrified me. I was unable to function for days after this letter — A risk to the department?!!!! I found this deeply upsetting and disgusting with no evidence. I believe this has ruined my career. This is a small town and the gossip is very damaging.”
The applicant said she had gone through hours of counselling and support to deal with the words, “risk you pose to the department”. The applicant said the majority of her recovery had been focused on those comments and how she came to be regarded by her employer such a risk. After all her time within the department and given the incidents and risks she had dealt with, the applicant could not comprehend how she came to be regarded as a risk herself.
The applicant said she moved away as she could not face working in the department office in the same small town. The applicant was not allowed to teach, so asked to be placed in a different office elsewhere to perform her alternative duties. The applicant said she was being paid for her alternative duties work but not the full amount she would normally earn in her usual role.
The applicant did not receive details of the allegations until July 2023.
In her subsequent statement, the applicant provided further details of the workplace conflict and the allegations that were made against her.
The applicant said the workplace conflict coincided with the applicant being promoted to the Deputy Principal Support and Inclusion position in July 2022. The applicant became responsible for the overall supervision of the people involved in the conflict. The position was newly created for schools with seven support classes or more.
Immediately prior to this, the applicant had been in the position of acting Deputy Principal (Stage 5). The applicant did not experience any conflict while in that role. Before that, the applicant had been Head Teacher (Support) for 10 years.
The applicant’s Head Teacher position was not immediately filled and for a few months the applicant performed both roles. The member of staff who temporarily filled the position had declined to continue on a permanent basis to protect her own mental health, alleging that she had been abused by other staff, ostracised, gossiped about ignored and her instructions not followed.
The applicant identified five colleagues involved in the workplace conflict. The applicant said she had previously gotten along well and formed close friendships with some of those colleagues.
In particular, the applicant identified a student support officer, Annette Whiting, as involved in the conflict. The applicant said that her positive relationship with Ms Whiting came to an abrupt end when she overheard discussions regarding the possibility of the applicant’s new office being put into the room that Ms Whiting occupied. Ms Whiting stopped speaking to the applicant and joined with three other colleagues to act against the applicant. The applicant said Ms Whiting had an extremely close relationship with the Principal, which gave her extraordinary power within the school. She was well-known to gather gossip and report it to the Principal. The applicant expressed the view that most of the school were afraid of getting on the wrong side of Ms Whiting.
The applicant said she became aware that Ms Whiting was involved in spreading rumours about her when she picked up the unattended phone of another colleague, Maree Breese, to bring it to her. Displayed on the phone was a message from Ms Whiting saying that she had sent an email to the Principal informing him that Ms Breese was too scared to say no to the applicant due to fear of retaliation. This was a few weeks after Ms Whiting got angry about the possible loss of her office. The applicant had previously regarded Ms Breese as a very close friend.
The applicant noted that after the death of her colleague, she was asked to come to school to support her faculty. The applicant said,
“I did not want to return to work so soon. I was unwell and in a fragile emotional state, not only because of the sudden loss of my colleague, but because of the confusion about the betrayal I felt from my own staff and former friends. However, I returned because I felt obliged to do so and to support my colleagues and friends. After a short period of time at work that day, I became too unwell to continue and left for the day.”
After returning to work on 9 August 2022, the applicant raised concerns about the gossip and its impact on her mental health with the relief Principal, Scott Brown. He suggested the applicant rely on the school’s Employee Assistance Program.
On 18 August 2022, the applicant was attending a professional development session with
Mr Brown when an email notification was displayed on his computer with a subject to the effect of, “From PES, Ms Rachel Fry, Letter of Allegations.” The applicant said she was shocked and terrified that she was about to be terminated without having a chance to defend herself.
After the session finished, the applicant asked Mr Brown to give her the email which he said he could not do. The applicant suffered a panic attack and went to the closest bathroom where she vomited.
After discussing the situation with another colleague, the applicant again asked for the letter. Mr Brown handed the applicant the letter. There was no discussion or meeting about the letter. The applicant said she was shocked and horrified by its contents. The applicant was terribly upset and in retrospect should not have driven home given the state she was in.
The applicant then described receiving a further letter on 16 November 2022 by which she was made a Teacher on Alternative Duties (“TOAD”). The applicant said that being classed as a “TOAD” horrified her as, in her experience, teachers under investigation for serious offences such as sexual misconduct and assault were assigned to TOAD positions and their location of work was often referred to as the “TOAD Hole”.
After receiving this letter, the applicant could not function for days, the applicant could not eat or move, did not want to get out of bed and considered killing herself. The applicant felt humiliated and belittled. The applicant was not coping and did not want to continue working as a teacher. The shame and stigma were too much to bear.
The applicant said that there was no meeting or discussion around this letter. She had received an email the previous day asking her to meet with Mr Brown. When the applicant attended his office on 16 November 2022, Mr Brown handed the applicant the letter while she stood in the doorway. He then left his office and closed the door. When the applicant read the letter, she became extremely upset. The applicant went to the office of another deputy principal who was present. Although the applicant was visibly very upset, the colleague did nothing to support the applicant. The applicant was in no fit state to drive but had been ordered to leave the school grounds. Mr Brown saw the applicant’s level of distress while she was sitting in her car but did and said nothing.
In a further letter, dated 28 June 2023, from the respondent’s Professional and Ethical Standards Directorate (PES), the allegations of misconduct were finally particularised. The applicant engaged a solicitor to respond to the allegations but continued to perform alternative duties.
On 18 November 2023, the applicant received a letter indicating that, following an investigation, the applicant was likely to be demoted to a classroom teacher role with a pay reduction of approximately $50,000 per year. This represented a demotion by two levels from the position the applicant had worked years to attain.
The applicant described the allegations of misconduct in the investigation report as relatively low level. Having been made aware of the details of the alleged misconduct and the statements made by other people involved, the applicant was now in a position to refute almost all of the allegations as untrue or having been properly authorised by Mr Brown at the time.
The applicant expressed the view that the low-level misconduct alleged against her did not justify suspension from her teaching duties or being prohibited from entering school grounds. At most the allegations might warrant a reprimand and could easily have been addressed promptly rather than raised as cumulative allegations seven years later. The conduct in question was regarded as collegial and helpful at the time.
In her final statement, the applicant described in more detail the nature of her work whilst performing alternative duties. The applicant said that as a result of her injury she was no longer able to perform a significant number of the important duties and responsibilities of her previous deputy principal role. These included leadership responsibilities, researching pedagogical practices, collaborating with the principal, providing constructive feedback, managing staff performance and promoting and strengthening a culture of high expectations in the workplace.
The applicant said she was currently working as a support teacher at another school. Her duties were at the level of a classroom teacher. The applicant left school grounds immediately at the end of the teaching day and did not engage with other teachers or spend time in the staff room. The applicant did her lesson preparation work in the safety of her own home. The applicant said she was just managing to cope with this workload but had concerns about her ability to continue to do so. The applicant said she was earning about $39,000 less per year doing this job.

Mr Adams

The applicant relies on a written statement prepared by Michael Adams, a Deputy Principal at Great Lakes College Forster Campus.
Mr Adams expressed concerns about the management of the allegations against the applicant and the effect this had on her mental health.
Mr Adams said the allegations made against the applicant fell into two categories, one being the misuse of departmental human resources and the second being allegations of bullying to staff. According to the department’s guidelines, these ought to have been investigated separately. Only the first category ought to have been reported to PES, whereas the other category of allegations would normally be managed at the school level.
Mr Adams said the bullying complaints involved complex interpersonal relationships across many members of staff and would ordinarily be managed in a local context.
Merging the two categories of allegations into one investigation compromised the effective and timely management of the complaints. The length of the investigation meant that many witnesses had time to collaborate on their testimony. The senior executive of the school were aware of numerous breaches of confidentiality by some of the complainants. Staff across the school were aware, to some degree, of the allegations that had been made. Mr Adams expressed the view that an ‘echo chamber’ effect occurred amongst the complainants with the potential for misleading and exaggerated claims when they were later interviewed.
Mr Adams noted that it was over 12 months before the applicant was given all of the allegations and a chance to respond. She was never fully informed of the circumstances which justified her removal from the school while the investigation proceeded. This had exacerbated the applicant’s mental health injury.

Mr Brown

A written statement prepared by Scott Brown on 30 November 2022 described a meeting with the applicant on 16 November 2022.
Mr Brown said that when he arrived at work, the applicant was outside his office. The applicant indicated that she did not need a support person and would like to start the meeting straight away. The applicant came into the office and remained standing. Mr Brown handed her the letter from PES. The applicant said “thank you I am now going to go home and will probably be off for a few days”. The applicant did not open the letter and left the school shortly afterwards.
Mr Brown said he understood that the allegations related to bullying/unprofessional behaviour and misuse of support staff dating back several years.
The decision to direct the applicant to perform alternative duties was made by PES after consideration of the allegations and speaking with witnesses.
The applicant had previously returned to work on 11 August 2022 after being on leave between 3 August 2022 and 9 August 2022.
Attached to Mr Brown’s statement was an email dated 15 November 2022 addressed to the applicant, in which Mr Brown stated:
“I have been contacted by PES this afternoon and requested to organise a meeting with you tomorrow, 15th November 2022. At this meeting, I am to present a letter to you from PES regarding the investigation that you are aware of. You are encouraged to bring a support person with you if you wish. I was advised that I am not to discuss the contents of the letter with you until the meeting tomorrow. My only available time to meet during normal work hours tomorrow is 2pm. However, I would like to offer to meet with you before work at 7:30 am as I am aware that you would probably like the information as soon as possible. Please let me know your preferred time to meet.”

Departmental correspondence

Copies of the letters described in the applicant’s statement evidence are before the Commission.
A letter dated 19 August 2022 signed by the Director of Child Protection Investigations, informed the applicant that the PES had received allegations in relation to the applicant’s previous role as Head Teacher. The allegations were described in the following terms:
“●      making aggressive, derogatory and/or threatening comments towards or in the presence of staff including calling staff ‘cunts’
·        yelling at staff
·        requesting staff to attend your residence during work hours to complete personal jobs for you
·        requesting staff to shop for and deliver groceries during work hours for staff in isolation or who were unwell
·        misusing school funds to pay for staff morning tea
·        showing preferential treatment to staff, including Tanya Gallagher.”
The applicant was informed that the allegations were being investigated. No decision about the truth or accuracy of the allegations had been reached. The applicant was given several directions with regard to confidentiality and acting professionally. The applicant was invited to provide a submission about her own version of events and the names and details of witnesses with direct knowledge of the matters under investigation. The applicant was advised of the availability of support from the Employee Assistance Program and New South Wales Teachers Federation.
In a further letter, dated 13 October 2022, the applicant was advised that the investigation remained in the evidence gathering phase and that the applicant would be provided with the details of the allegations and an opportunity to respond once the information gathering phase was complete. The applicant was again reminded of the supports available to her.
A letter dated 15 November 2022, from the Executive Director, PES, referred to the investigation and contained new directions to the applicant said to be for the purposes of managing risk. The applicant was directed to undertake non-teaching alternative duties at the Forster Education Office. The letter stated,
“I have directed you to alternative duties because of the seriousness of the allegations and the risk you pose to the department.”
The applicant was advised that during the period of alternative duties she was not permitted to enter the grounds of any department school for any reason or purpose without written approval.
The applicant was advised that she could seek reconsideration of the decision to place her on alternative duties and reminded of the supports available to her.
A letter dated 28 June 2023, from the principal investigator provided the applicant with the complete list of allegations against her. The allegations included:
·        acting unprofessionally by having Ms Breese drive the applicant’s son to school during school hours on more than one occasion between 2005 and 2011;
·        asking department staff to complete various personal tasks for the applicant outside their job description during school hours between 2017 and 2022;
·        asking department staff to attend the applicant’s home to complete various personal tasks for her during school hours between 2017 and 2022, and
·        acting unprofessionally by delegating Head Teacher responsibilities to a school learning support officer and allowing the same officer to have time off without submitting a leave request.
The applicant was invited to respond to the allegations and advised of her ability to nominate an adult support person. The applicant was reminded of the supports available to her.
A Findings Report, dated 6 November 2023, found that most of the allegations were sustained. Most of the allegations were found to amount to misconduct but not reportable conduct.
The report noted,
“While Ms Fry consistently claims that the tasks performed by employees who reported to her were carried out as collegial courtesies, the evidence demonstrates that this was not the view of those people who were asked to complete the various tasks.
…
Ms Fry's requests were not in line with the job descriptions of the employees that reported to her and resulted in her receiving a personal benefit.”
In relation to the allegation concerning the school learning support officer, it was noted,
“It is important to note that anyone in an SLSO position should operate under the direct supervision and direction of a teacher. The evidence demonstrates that Ms Fry did not supply such direction and used the SLSO position as a means to abrogate her professional responsibilities.”
In summary, it was found:
“While each example of Ms Fry’s sustained misconduct may be relatively low level, collectively they demonstrate a pattern of behaviour that is incongruous with the expectations that the Department has of executive teachers. Ms Fry’s misuse of the human resources allocated to support the education of students demonstrates a level of personal entitlement that is not appropriate for a public servant. Ms Fry’s requests of the employees she supervised supplied her with personal benefits including personal comforts, time dividends from not performing tasks for herself (both professional and personal) and substantial financial benefits in terms of labour savings for work performed on her personal residence. I do not accept Ms Fry’s contentions that the actions of those who reported to her were the result of collegial reciprocity, these were not the views of those she managed.”
Also before the Commission are the Investigation Report and Post-Findings report and attachments.
In correspondence dated 18 November 2023, the applicant was advised of the outcome and findings of the Investigation Report and proposed disciplinary action. It was noted that the severest disciplinary action being contemplated was demotion to the position of classroom teacher and transfer to another position at that level. The applicant was invited to make submissions and again reminded of the supports available to her.

Mr Currie

The Executive Director of the PES, Mr Daryl Currie, prepared a written statement for the respondent’s solicitors on 5 April 2024.
Mr Currie’s statement provides a chronology of relevant events.
Mr Currie noted that the matter was allocated for investigation on 12 August 2022, with a letter of notification and directions being issued on 19 August 2022.
In a telephone call with the investigator on 15 September 2022, the applicant had made some admissions in relation to the allegations.
Mr Currie stated:
“The PES Principal Investigator subsequently undertook interviews with witnesses. These interviews appeared to confirm Ms Fry inappropriately and dishonestly used department resources and disadvantaged students. Some of the witnesses disclosed fear of being victimised by Ms Fry if they spoke of her behaviour or declined her requests.
Following careful consideration, given the potential for Ms Fry’s alleged conduct to bring the department into disrepute, I directed her to alternative duties on 15 November 2022. This was a risk management decision. No decision as to the truth or accuracy of the allegations had been made.”
Mr Currie noted that the applicant sought review of the decision to direct her to alternative duties on 23 November 2022. Following consultation with a disciplinary advisory panel on
8 December 2022, Mr Currie advised the applicant that he remained of the view that the direction to alternative duties was appropriate. To mitigate the stress and anxiety the applicant was experiencing, he approved a request for the applicant to undertake her alternative duties on the Central Coast.

Treating evidence

The applicant’s treating psychologist, Ms Michelle Hourigan, prepared a report on
[1] While this letter is dated 29 January 2023 it appears to have been prepared on 29 January 2024 as it refers to events occurring over the course of 2023.
29 January [2023][1] for the applicant’s solicitors.
In that report, Ms Hourigan noted that the applicant had attended approximately 30 appointments. Ms Hourigan stated:
“She presented following a psychological injury in the workplace in August 2022, wherein she experienced significant and prolonged shock and distress upon seeing a message on a friend's phone, which revealed that her friend and multiple other staff members were making a complaint about Ms Fry's conduct at work to PES.”
Ms Hourigan recorded that the applicant scored in the “extremely severe” range for depression, anxiety and stress on the DASS 21 on 16 August 2022 and was diagnosed with reactive depression/adjustment disorder with severe depressed and anxious features.
Ms Hourigan described the applicant’s symptoms, noting that the applicant was experiencing heightened anxiety and hypervigilance and was hypersensitive to signs of gossip, criticism and comments from others. The applicant had intense and frequent suicidal ideation. The applicant was unable to rely on her primary support networks as these individuals were involved with the school. The applicant was largely isolated from both a professional and personal support networks. Ms Hourigan said the applicant’s level of distress was so severe that she and the applicant’s general practitioner had regularly encouraged and instructed her to take time off work. From the date of injury through to November, the applicant was unable to work full-time hours and was regularly required to take sick leave.
On 8 November 2022, the applicant continued to score in the extremely severe range for anxiety, depression and stress scores in the moderate range on DASS 21.
Ms Hourigan described a deterioration in the applicant’s mental health following her removal from the school to alternative duties in November 2022. Ms Hourigan noted:
“I note that this second event in November 2022 was not accepted as a liable workcover injury, however, her original injury in August 2022 remained unresolved, and this event in November 2022 further destabilised Ms Fry's mental health and presented significant and prolonged barriers to her recovery from her original injury. This included, for example, rendering Ms Fry unable to engage in the final stages of exposure therapy to enable her to return to her pre-injury role and functioning, while the investigation was pending.”
Ms Hourigan commented further on the factors contributing to the applicant’s psychological condition:
“There were multiple factors contributing to the severity of impact these events had on Ms Fry. Throughout sessions, Ms Fry consistently and reliably reported that she had been genuinely unaware of any concerns around her conduct, neither from the complainants or other staff members at school. She stated that no concerns had been expressed to herself, and no complaints had been made through the standard protocols and procedures within the school. To the contrary, in the years, weeks and even days leading up to this event, Ms Fry stated she continued to receive positive and supportive text messages and comments from staff at school, including from the individuals specifically involved in the complaints. This resulted in these complaints coming as a complete shock to Ms Fry, as well as significant confusion and lack of understanding around what these allegations contained. Secondly, Ms Fry considered some of the complainants to be good friends; in particular, the complainant who's phone Ms Fry saw the message on was considered by Ms Fry to be an incredibly close, long term friend. This also resulted in the significant and abrupt loss of that close friendship and personal support. The escalation of the complaints directly to PES without Ms Fry being made aware of the concerns of staff members, and without Ms Fry being given an opportunity discuss their concerns and adjust her behaviour in the workplace, also contributed to significant shock and distress, particularly given the magnitude of the investigation and potential impact on her career. Furthermore, the protracted nature of the investigations resulted in Ms Fry being unaware of the content of the allegations for the better part of a year, which contributed to her psychological injury remaining unresolved, and intense, prolonged distress, anxiety, and uncertainty. During this time, Ms Fry also experienced week by week uncertainty regarding the investigation duration, as well as her financial and living situation, which further impaired her ability to work during this time.”
Ms Hourigan noted aspects of the applicant’s personal history that rendered her more vulnerable to this type of injury.
Ms Hourigan noted a significant improvement in the applicant’s condition once full details of the allegations were received in late 2023 as the applicant was able to finally make sense of the original injury. Ms Hourigan said that although the original injury remained unresolved, the applicant had been able to return to Forster and reengage with friends and colleagues. The applicant remained anxious about her role and encountering the individuals who made the complaint.
Ms Hourigan prepared a further report on 25 September 2024. Ms Hourigan noted that the applicant had been unable to continue appointments for most of 2024 due to financial stress after the claim being closed despite her own objections. Ms Hourigan commented:
“In my opinion, at the time Ms Fry's claim pertaining to her first injury had been closed, she had not yet demonstrated full recovery from her initial injury. She continued to experience severe anxiety, depression, suicidal ideation, and negative beliefs about self worth that had originated from her initial injury.”
Ms Hourigan clarified the factors causing and exacerbating the applicant’s injury.
Ms Hourigan described the “moment of the injury” in August 2022 as being when the applicant realised that several staff members, including an extremely close friend, were communicating and coordinating a formal complaint about her conduct.
Ms Hourigan said that when the applicant inadvertently saw the message on her friend’s phone, she experienced extreme shock and the onset of an adjustment disorder and extremely severe and prolonged anxiety, depression and stress. Ms Hourigan explained that this was in part due to the applicant’s belief that she had been thriving in her role as deputy principal and had strong personal and professional relationships with staff at the school including the complainants. The person on whose phone the applicant saw the message had been a friend for 16 years and the applicant had loved her like family. The applicant had not previously been made aware of any concerns or complaints regarding her conduct either personally or professionally. The applicant had consistently received positive feedback and messages from staff.
Ms Hourigan noted that the applicant had been unable to work for the majority of the time between August and November 2022, as she was struggling with acute distress, depression and anxiety.
The applicant’s removal from her position in November 2022 exacerbated the original injury. The applicant’s removal from the school suggested a gravity around the allegations that exacerbated the applicant’s anxiety, distress and depression.
Ms Hourigan commented:
“However, her difficulties associated with and originating from her first injury in August 2022 continued from November 2022 until appointments with myself ceased on 8th March 2024 due to significant financial stress.
…
Consequently, events in November 2022 exacerbated her difficulties from her first injury, and her ongoing depression and anxiety from her first injury rendered her more vulnerable to distress, anxiety, and depression from subsequent events in November. Furthermore, the interpersonal trauma from her first injury remained, and Ms Fry had not yet had the opportunity of resuming work within a school to directly expose her to and help resolve key triggers associated with her first injury.”
Ms Hourigan noted that during her most recent appointment on 15 September 2024, it was clear that the original injury remained a significant underlying factor in the applicant’s difficulties since August 2022. The applicant remained anxious about how she was perceived by other staff members and was hypervigilant about what she said and how this might be construed or twisted and used against her. The applicant was anxious about unintentionally doing the wrong thing or giving the wrong impression and having complaints made about her. The applicant was severely hypervigilant about other staff members talking and gossiping about her.

Ms Hourigan expressed the opinion that the applicant had not regained her full pre-injury capacity. The applicant was only capable of undertaking her current role because she was able to remove herself from the main parts of school. Her DASS 21 scores remained in the moderate range for depression and extremely severe for anxiety and stress.

Certificates of capacity

The applicant was first issued with a SIRA certificate of capacity certifying her as having no current work capacity for the period 3 August to 5 August 2022 as a result of injury on
2 August 2022.
On 24 November 2022, the applicant was certified as having capacity to engage in some type of employment for eight hours per day, five days per week between 25 November 2022 to 9 December 2022 in respect of the injury dated 2 August 2022.
A certificate of capacity dated 6 September 2023 certified the applicant as fit for pre-injury duties “once the department lifts the restrictions” in respect of the injury dated 2 August 2022.
The applicant also received certificates of capacity in relation to a date of injury of
16 November 2022, certifying her as having no current work capacity for any employment from 16 November 2022.

Dr Kumar

The respondent relies on medicolegal reports prepared by psychiatrist, Dr Mukesh Kumar, dated 18 May 2023, 13 June 2023, 14 September 2023 and 16 December 2024.
At the time of his first report, Dr Kumar noted that the applicant was currently back to work, working two days per week from home, with the other three days at the respondent’s Tuggerah office.
The applicant told Dr Kumar that she had two claims for compensation. The first was from August 2022 after she had received a letter and was bullied and harassed. There was a second claim on 16 November 2022, after she received a letter to go to the Forster office.
In relation to the first claim, Dr Kumar took a history that in August 2022 the applicant found out that her very close friends had joined with a student support officer who had organised a group of people to put together a complaint about various things done over the last five years. The applicant saw a text message on her best friend’s phone about this. The applicant was quite upset after seeing this text message.
The applicant had spoken to the principal about the issue, who told the applicant that he was unable to tell her anything. The applicant realised that Ms Whiting had organised other people to put in complaints about the applicant. The applicant described overhearing a conversation between two teachers where one was telling the other to put in a formal complaint against the applicant. Two weeks later, the applicant received a letter of allegations from PES.
The applicant reported that she had returned back to school but there was a lot of gossiping. The applicant was isolated. People were twisting her words and spreading false stories about her. A rumour had been spread that another Head Teacher had been sent to supervise and take notes on the applicant. The applicant discussed her concerns with the Principal. The applicant described a conflict with another teacher about whether that teacher should attend a school camp. During this period, the applicant received another letter placing her on alternative duties.
Dr Kumar took a past psychiatric history and recorded the applicant’s symptoms. After performing a mental state examination, Dr Kumar diagnosed an adjustment disorder. Under the heading, “rationale for diagnosis”, Dr Kumar said,
“The adjustment disorder is in response to the letter that she received from Professional and Ethics Standard where there were a number of allegations made against her. As this investigation is still ongoing, the adjustment disorder has continued. Though she has attempted to return back to work, it appears that she still had ongoing conflicts with her peers which then led the Department of Education to determine that she should work in alternative duties.”
This view was reiterated in response to a specific question as to whether the applicant had developed a psychological injury. Dr Kumar said that the adjustment disorder was in response to the letter advising the applicant that she was being investigated for multiple allegations of abuse. The symptoms had continued, however, the further conflicts following the applicant’s attempt to return to work it added to her ongoing symptoms.
Later, in responding to a question as to whether action taken by the employer in investigating the allegations of misconduct and directing the worker to alternative duties were the whole or predominant cause of the psychological injury, Dr Kumar stated:
“In my opinion, the actions taken by the employer investigating the allegations of misconduct as well as directing the worker to alternative duties is the predominant cause of her psychological injury. There were no symptoms prior to this, and her symptoms have started subsequent to these events.”
Dr Kumar noted that the applicant was working full-time and expressed the view that she was fit for work although not fit for pre-injury duties as a deputy principal in the context of her symptoms.
In his supplementary report dated 13 June 2023, Dr Kumar was asked specifically whether any of the applicant’s current symptoms related to the incident where she read a message on a colleague’s phone. Dr Kumar responded:
“The symptoms are not related to this incident, rather the predominant cause of her symptoms of the disciplinary letter she received from the Professional and Ethics Standards where she was advised that she is being investigated for multiple allegations for abuse. The incident above did not lead to any diagnosable psychiatric condition as there was no evidence of any significant impairment or any evidence of psychiatric symptoms. The symptoms have had an onset after she received the letter.”
In his supplementary report dated 14 September 2023, Dr Kumar noted the history recorded in his first report. The applicant reported at the time that her mood was now “really good”. The applicant’s sleep, concentration and appetite had improved and she was independent in the activities of daily living including self-care and personal hygiene. The applicant would go out and socialise and have visitors to her home. The applicant noted that some months earlier she had experienced suicidal thoughts but had received mental health support since then. The applicant remained on Lovan and Valdoxan.
Dr Kumar expressed the opinion that the applicant had no psychiatric symptoms which might constitute a diagnosable psychiatric condition. The previous diagnosis of an adjustment disorder was in complete remission. The applicant had no incapacity for work.
In his most recent supplementary report, dated 16 December 2024, Dr Kumar noted the previous histories. The respondent’s investigation was now complete. As a result of the allegations, the applicant was demoted and was now working as a classroom teacher at a different school.
The applicant reported experiencing financial and other personal stressors. Regarding work, the applicant reported:
“Regarding work, Ms Fry reported that she is able to work and added that she “puts on a good show at work.” She said that she enjoys working.”
The applicant described her mood as up and down and reported disturbed sleep, reduced concentration and increased appetite. The applicant had lost interest in activities she used to enjoy.
Dr Kumar diagnosed a persistent depressive disorder, commenting:
“Though Ms Fry has had depressive and anxiety symptoms since 2022, the severity does not reach the threshold of major depressive disorder. Her symptoms were initially considered as part of an adjustment disorder. During my last assessment in September 2023, there were no active psychiatric symptoms, and the adjustment disorder was considered to be in remission. Since then, she has developed depressive symptoms again. This appears to be in context of various factors including being demoted to a classroom teacher as well as non-work-related factors such as the illness of her father and financial stress.”
Dr Kumar reiterated his view that the direction to work in alternative duties had perpetuated the underlying adjustment disorder and that the aggravation had not resolved:
“The underlying aggravation has not been entirely resolved as Ms Fry is still struggling with the aftermath of the decisions by the department. She said that the allegations against her had been substantiated, and she was demoted to work as a classroom teacher.”
Asked whether the injury was wholly or predominantly caused by action taken or proposed to be taken by or on behalf of the employer with respect to the transfer, discipline and/or dismissal, Dr Kumar responded:
“The adjustment disorder was caused by the actions taken by the employer with respect to disciplinary action. Specifically, this relates to the allegations made against her which were later substantiated, as well as being asked to move to another office in Forster.”
Dr Kumar expressed the view that the applicant had the capacity to work in pre-injury duties and hours without restriction, commenting:
“Ms Fry has some psychiatric symptoms however these are not impacting on her functioning substantially. This is evidenced by the fact that she has been able to work full time as a classroom teacher without any significant impairment of functioning.”

Dr Gill

The applicant relies on a medicolegal report prepared by neuropsychiatrist, Dr Ronald Gill, dated 5 October 2024.
Dr Gill recorded a history that was broadly consistent with the applicant’s statement evidence and the history previously recounted to the respondent’s medicolegal expert, Dr Kumar.
Dr Gill noted that the applicant was currently working full-time as a classroom teacher, having been demoted as a result of the investigation.
Dr Gill recorded the applicant’s psychological symptoms and noted that there had been two prior attempts at suicide during the period of the investigation. After recording a personal and psychological history and mental status examination, Dr Gill summarised the applicant’s presentation as follows:
“The onset of her current psychological difficulties can be traced back to August 2022, when she discovered that several colleagues, including close friends, were coordinating a formal complaint against her. This revelation was a significant shock and led to feelings of betrayal, worthlessness, and intense distress. The subsequent investigation and how her employer handled it further aggravated her psychological state, leading to a deterioration in her mental health.”
Asked to comment on the applicant’s capacity for work, Dr Gill expressed the opinion:
“Ms Rachelle Fry currently exhibits a restricted capacity for work due to her major depressive disorder with anxious distress. Her psychological condition significantly impairs her ability to perform tasks that require sustained concentration, decision-making, and interaction with others. As a result, her capacity to engage in high-stress roles, such as that of a Deputy Principal, is severely limited. Given her current mental health status, Ms Fry is capable of fulfilling her duties as a classroom teacher, albeit with some necessary accommodations.”
Asked whether the applicant’s current incapacity was caused by injury at work, Dr Gill stated,
“The series of events, including workplace bullying, the subsequent formal complaints against her, and the prolonged investigation, have had a profound psychological impact. These work-related stressors have not only precipitated her major depressive disorder with anxious distress but have also significantly aggravated her underlying anxious personality traits.”
In response to further questions, Dr Gill said the applicant’s condition resulted from series of events rather than a single isolated incident. Initially, the applicant experienced workplace bullying including malicious gossip and ostracism. This situation was further exacerbated upon receiving distressing allegations which were not immediately clarified. The prolonged investigation added another layer of psychological burden. The isolation and unkind behaviour from colleagues upon the applicant’s return to part-time work in September compounded the applicant’s sense of alienation and emotional distress. The accumulation of these multiple stressors had led to the development of a major depressive disorder with anxious distress.
In response to a question as to whether workplace bullying in the period leading up to
4 August 2022 was “the main contributing factor” to the applicant’s illness, Dr Gill expressed agreement stating that the bullying episodes “directly precipitated the onset of the major depressive disorder with anxious distress”. Dr Gill commented:
“The specific characteristics of the bullying, including the betrayal from trusted colleagues, the lack of support from superiors, and the prolonged investigation, were particularly damaging. These experiences exacerbated her pre-existing anxieties, leading to a significant increase in the frequency and intensity of her symptoms. Furthermore, the timing of the bullying is crucial. It coincided with a period of significant professional responsibility for Ms Fry, as she had recently been promoted to Deputy Principal. This added pressure amplified the impact of the bullying, making it even more challenging for her to cope.”

Applicant’s submissions

The applicant referred to her long employment history with the respondent. The nature of her work involved looking after children with disabilities. This required close collaboration with support staff. The applicant built friendships with her colleagues that went beyond a teacher / support staff relationship.
The applicant’s evidence described a significant act of betrayal from some of those colleagues. The applicant submitted that she never recovered from the original betrayal.
The applicant noted that she received treatment from Ms Hourigan. Ms Hourigan’s evidence indicated that the applicant returned extremely severe scores on DASS 21 assessments performed on 16 August 2022 and 8 November 2022. The applicant submitted that these results indicated that she had not recovered from the first injury at the time of the subsequent injury.
Ms Hourigan’s evidence indicated that the applicant continued to struggle with severe distress, depression, anxiety, low self-worth and suicidal ideation over the course of 2023.
The applicant referred to Dr Gill’s evidence that workplace episodes leading up to
4 August 2022 played a pivotal and definitive role in causing the applicant’s illness. The applicant submitted that it was clear that the cumulative impact of a series of events had contributed to her psychological state rather than a single isolated incident.
The applicant submitted that the second injury in November 2022 constituted an aggravation of the applicant’s condition that had continued since the initial injury.
The applicant noted that although she had returned to work on a full-time basis as a classroom teacher, she sought compensation for the difference between what she would have earned as she remained in the position of deputy principal and what she was now able to earn. The applicant submitted that she had never recovered to the extent that she could resume her pre-injury duties although she was able to continue in suitable duties.
The applicant noted that in his September 2023 report, Dr Kumar appeared to take the view that the applicant’s condition was in remission. The applicant submitted that this opinion was not consistent with the contemporaneous treating evidence. The Commission would prefer the evidence of Dr Gill.

Respondent’s submissions

The respondent observed that the case was complicated by the dual injuries. It was necessary for the Commission to make factual findings around what did and did not occur. The first injury flowed from the applicant observing a text message on a colleague’s phone. The second injury occurred in response to being provided a letter directing the applicant to perform alternative duties. The respondent submitted that the whole or predominant cause of the second injury was reasonable action with respect to transfer, discipline or dismissal.
The respondent submitted that it was the second injury which gave rise to the applicant’s ongoing difficulties. The respondent submitted that the Commission would accept the opinion of Dr Kumar that the receipt of the letter on 16 November 2022 was causative of the applicant’s condition and that respondent’s conduct in issuing the letter was reasonable.
The respondent submitted that the Commission would prefer Dr Kumar’s evidence over the evidence from Ms Hourigan. Ms Hourigan’s evidence displayed “treater bias” in the way her opinions were expressed. A common sense approach to causation suggested Dr Kumar’s opinion was more correct.
The respondent submitted that Dr Gill’s evidence was internally inconsistent and lacked impartiality.
The respondent noted that the applicant’s statement evidence referred to interpersonal conflict around planned changes to her office. However, the only real event causing injury was the text message the applicant saw on Ms Breese’s phone. There was an immediate connection between the text message and the applicant going off work. The applicant read into the text message other matters which were not real. The respondent submitted that the Commission would not be satisfied that there was some prolonged campaign of bullying directed towards the applicant.
The respondent observed that the applicant’s statement evidence suggested the letter dated 15 November 2022 was the main trigger for her psychological problems. The respondent submitted that the second injury occurred following a single event, being the giving of the letter directing the applicant alternative duties. The respondent submitted that the Commission would find that action was entirely reasonable. Any subsequent events were not relevant. The respondent noted that the investigation reports substantiated many of the allegations.
The respondent submitted that the Commission would give greater weight to the medical evidence than the applicant’s own evidence with regard to the extent of her capacity. The applicant continued to work full-time.
The respondent referred to the email from Mr Adams and said the Commission would disregard it as biased. Mr Adams was clearly advocating for the applicant. Insofar as he raised concerns about the management of the investigation, those concerns were irrelevant. An injury had already been sustained. The respondent noted that the applicant’s own evidence did not raise the same concerns.
The respondent submitted that Mr Brown’s letter contained a contemporaneous recollection of meeting on 16 November 2022. The applicant was given advance notice of the meeting which was brought forward to the earliest possible time to convenience the applicant. The removal to suitable duties was appropriate where the health of the applicant’s colleagues was at risk.
The letter dated 15 November 2022 confirmed that no decision had been made about the truth or accuracy of the allegations. The direction to perform alternative duties was made to manage risk. The applicant was not being punished. The applicant was advised that she could seek reconsideration of that decision. Swift action was required by the respondent in the circumstances. The respondent submitted that its actions were reasonable.
The respondent submitted that the letter dated 19 August 2022 explained why the respondent took the steps it did. It was reasonable for the respondent to protect the applicant’s colleagues, weighing the interests of all parties concerned.
The respondent referred to Dr Kumar’s reports. Based on those reports, the respondent accepted that the applicant sustained an injury in November 2022 but said it was not a compensable injury. The predominant cause of that injury was the letter from PES.
In his report of 13 June 2023, Dr Kumar noted that the applicant had returned to work and was fit for suitable duties. In his 14 September 2023 report, Dr Kumar found the applicant’s condition was in complete remission.

Although in his most recent report, Dr Kumar diagnosed a persistent depressive disorder, he did not find it referable to any bullying and harassment rather it was a continuation of the November 2022 injury. Dr Kumar linked the applicant’s incapacity to the second injury.
The respondent submitted that the Commission would not be assisted by the report of
Dr Gill. Dr Gill’s opinion was based upon a false factual background. The respondent submitted that the Commission would not find the “bullying” on which Dr Gill relied was real. Dr Gill also ignored the evidence that the applicant had returned to work. Dr Gill appeared to conflate a primary injury with an aggravation injury. His reasoning was inconsistent with the applicant’s own factual evidence. The applicant’s level of functioning was difficult to reconcile with Dr Gill’s opinions.
The respondent observed that the applicant’s own statement evidence placed greater weight on the second incident. The applicant’s incapacity was to be assessed by reference to the role she had moved into at the time of the second injury.

Applicant’s submissions in reply

The applicant said that Dr Kumar’s diagnosis was referrable to the letter the applicant received in August 2022 not the letter in November 2022. No s 11A(1) defence had been raised in relation to the earlier letter.
In the alternative, the applicant submitted that the respondent’s actions around the letter dated 15 November 2022 were unreasonable. The action was heavy handed. The letter failed to set out details of the allegations against the applicant and the reasons for the decision to direct her to perform alternative duties. The letter was in template style and the words, “risk to the department” were not in keeping with the actual allegations in the applicant’s case. The letter suggested the allegations were incredibly serious. The applicant did not know what the actual allegations were as she was not told.

FINDINGS AND REASONS

Section 9 of the 1987 Act provides that a worker who has received an ‘injury’ shall receive compensation from the worker’s employer in accordance with the Act. The term ‘injury’ is relevantly defined in s 4 as it applies to this case as:
“4     Definition of ‘injury’
In this Act:
injury:
(a)     means personal injury arising out of or in the course of employment,
(b)     includes a disease injury, which means:
(i) a disease that is contracted by a worker in the course of employment but only if the employment was the main contributing factor to contracting the disease, and
(ii) the aggravation, acceleration, exacerbation or deterioration in the course of employment of any disease, but only if the employment was the main contributing factor to the aggravation, acceleration, exacerbation or deterioration of the disease, and
(c)     does not include (except in the case of a worker employed in or about a mine) a dust disease, as defined by the Workers’ Compensation (Dust Diseases) Act 1942, or the aggravation, acceleration, exacerbation or deterioration of a dust disease, as so defined.”
“Psychological injury” is further defined in s 11A(3) of the 1987 Act:
“(3) A psychological injury is an injury (as defined in s 4) that is a psychological or psychiatric disorder. The term extends to include the physiological effect of such a disorder on the nervous system.”
A psychological injury which meets the statutory definitions will not be compensable if a defence pursuant to s 11(A)(1) of the 1987 Act is made out:
“(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.”
Sub-section 11(A)(1) is a disentitling provision and an employer who wishes to rely upon it carries the onus of establishing that defence.[2]
[2] Pirie v Franklins Ltd [2001] NSWCC 167; Department of Education and Training v Sinclair [2005] NSWCA 465.
The test of reasonableness in s 11A(1) is an objective one.[3] In Commissioner of Police v Minahan[4] Foster AJA (Sheller and Santow JJA agreeing) cited with approval a passage from an unreported decision of Geraghty J in Irwin v Director-General of School Education:[5]
“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.”
[3] Jeffery v Lintipal Pty Ltd [2008] NSWCA 138.
[4] [2003] NSWCA 239.
[5] (unreported 18 June 1998).
In the decision of Van Vliet v Landscape Enterprises Pty Ltd,[6] Phillips P observed:
“The concept of reasonableness in s 11A(1) does not, with respect, require a counsel of perfection. It requires, consistent with the authorities (Heggie, Irwin), that all of the circumstances of the case are considered and that the action then be considered in an objective sense to be reasonable or not.
…
The Member found that the termination was imperfect, but in the circumstances reasonable.^[132] In terms of the Member’s fact finding, there is no error in this approach. The Member correctly considered all of the circumstances of the case, as the authorities require, in reaching a view about the reasonableness of the process adopted by the respondent. The member quite correctly noted the flexibility of the content of the obligation pertaining to procedural fairness,^[133] which stood in contradistinction to the inflexible approach urged upon the member by the appellant. In so doing the Member was involved in no error.”
[6] [2022] NSWPICPD 49.
There is no dispute between the parties in these proceedings that the applicant sustained a compensable psychological injury deemed to have occurred on 2 August 2022. It is apparent, however, that there is a dispute between the parties as to the causative events leading to that injury as well as its ongoing effects.
It is also not in dispute that a second psychological injury occurred on 16 November 2022 when the applicant received a letter directing her to perform suitable duties. The respondent disputes, however, that the second injury is compensable, relying on a defence under s 11A(1) of the 1987 Act.

The first injury

The first injury described in the Application to Resolve a Dispute was a disease injury caused by the “nature and conditions of the applicant’s employment, during which she was subjected to bullying and harassment by staff in the course of her employment as a Deputy Principal resulting in a psychological/psychiatric injury.”
The applicant’s evidence is that in the middle of 2022, after approximately 27 years of service with the respondent, interpersonal conflict developed between the applicant and some of her colleagues, particularly around changes to seating and office arrangements.
In her first statement, the applicant gave little insight as to the nature of that conflict or any “bullying and harassment” although she did indicate that it led to a complaint being made in which a number of false and malicious allegations were made against her.
Further details of the workplace conflict and the allegations were set out in the applicant’s second statement. The applicant noted that in July 2022 she was promoted to a new position of Deputy Principal Support and Inclusion. The applicant said that she overheard discussions between Ms Whiting and other colleagues about a proposal for the applicant’s new office to be moved into the room occupied by Ms Whiting. The applicant said Ms Whiting stopped talking to her and she became aware that Ms Whiting was spreading rumours about her when she picked up Ms Breese’s phone and saw a text message from her about the applicant.
The applicant described an acute onset of psychological symptoms after seeing the text message as she had previously regarded Ms Breese as a close friend. The applicant saw her doctor and received a SIRA certificate of capacity certifying her as having no current work capacity for the period 3 to 5 August 2022 as a result of an injury occurring on
2 August 2022.
Although the applicant returned to work shortly afterwards, following the death of a colleague, the applicant’s evidence was that she remained in a fragile emotional state due to the betrayal she felt from her own staff and former friends.
The applicant also described an intensification of her symptoms on 19 August 2022 upon becoming aware of correspondence advising her that a number of allegations had been made against her and that an investigation was to commence.
The treating evidence from Ms Hourigan confirmed that the event on 2 August 2022, when the applicant saw the message on Ms Breese’s phone, had triggered a significant and prolonged period of shock and distress. Mr Hourigan diagnosed a reactive depression/adjustment disorder with severe depressed and anxious feelings after the applicant returned scores in the extremely severe range for depression and anxiety and stress on the DASS 21 on 16 August 2022.
The event on 2 August 2022 is also prominent in the history recorded by Dr Gill in October 2024. Dr Gill recorded that the applicant felt devastated when she saw a text message on a friend’s phone about her. Dr Gill said this revelation was a significant shock and led to feelings of betrayal, worthlessness, and intense distress. Dr Gill said the onset of the applicant’s current psychological difficulties could be traced back to the August 2022 event.
The history recorded by Dr Kumar in his first report was broadly consistent with the other evidence. However, Dr Kumar regarded the letter received from PES as the trigger for the applicant’s psychological injury. Dr Kumar expressed the opinion that the adjustment disorder was in response to the letter in which a number of allegations were made against the applicant. The adjustment disorder was said to be continuing. Although there was a return to work, there was ongoing conflict, which then led the Department to determine that the applicant should work in alternative duties.
It is clear, reading Dr Kumar’s opinion in context, that the letter from PES that Dr Kumar was referring to was the letter dated 19 August 2022 in which the applicant was first formally advised that allegations had been made against her.
While the other evidence confirms that the letter dated 19 August 2022 had a significant impact on the applicant’s symptoms, the applicant had already, on 3 August 2022, consulted her general practitioner and obtained a SIRA certificate of capacity certifying her as having no current work capacity as a result of the event on 2 August 2022. Dr Hourigan’s evidence also indicates that the applicant had returned results in the extremely severe range for depression anxiety and stress on the DASS21 on 16 August 2022, that is, prior to receiving the first letter.
As a result, Dr Kumar’s view, as expressed in his report dated 13 June 2023, that the applicant’s symptoms were not related to viewing the text message but rather related to the disciplinary letter where the applicant was advised that she was being investigated for multiple allegations, is inconsistent with the contemporaneous treating evidence and the applicant’s statement evidence.
Furthermore, although it is apparent that there was some interpersonal conflict between the applicant and some of her colleagues, both before and after the text message incident, I am not satisfied that either the lay or medical evidence supports Dr Gill’s view that a broader campaign of “bullying and harassment” had caused the applicant’s injury.
I find that it was the discovery of Ms Whiting’s text message on Ms Breese’s phone which caused a particular decompensation and was the trigger for the applicant’s psychological injury.

The second injury

The Application to Resolve a Dispute described a second injury, being an aggravation of a disease caused by “unreasonable conduct of the employer and ongoing bullying by co-workers, including false accusations of misconduct, failure to investigate in a timely or reasonable manner and excessive redeployment action by the employer.” A deemed date of 16 November 2022 was nominated.
The respondent submits that any incapacity the applicant has had in the period of weekly compensation claimed resulted from the second injury on 16 November 2022. The respondent submits, however, that it is not liable to pay weekly compensation in respect of the incapacity as the second injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the respondent with respect to transfer, discipline and/or dismissal pursuant to s 11A(1) of the 1987 Act. In particular, the respondent submits that the second injury was wholly or predominantly caused by a single event, being the letter that the applicant received on 16 November 2022 directing her to perform alternative duties.
The applicant’s own evidence is that there was a significant and material aggravation of her symptoms when she received a letter on 16 November 2022 by which she was made a teacher on alternative duties. Although the applicant had been able to work immediately prior to receiving this letter, the applicant said she was not able to function for days, could not eat or get out of bed and had suicidal thoughts after receiving the letter.
The applicant’s general practitioner issued a new certificate of capacity certifying the applicant as having no current work capacity in respect of a new injury on 16 November 2022.
Ms Hourigan described a significant deterioration in the applicant’s mental health following the receipt of the letter on 16 November 2022. Ms Hourigan said this event suggested a gravity around the allegations that exacerbated the applicant’s anxiety, distress and depression.
Dr Gill agreed that the respondent’s handling of the investigation aggravated the applicant’s psychological state leading to a deterioration in her mental health. Dr Gill did not, however, place particular significance on the 16 November 2022 letter. Dr Gill said the cumulative effect of a series of events including bullying, the formal complaints and the prolonged investigation had precipitated the condition diagnosed by him as a major depressive disorder with anxious distress.
Dr Gill’s opinion, which notably was expressed some two years after the relevant events, does not overtly support a finding that there was a second aggravating injury. Rather, his report indicates that a series of events commencing with the August 2022 event cumulatively resulted in the condition found by him at the time of his examination.
Dr Kumar recorded that further conflict following the applicant’s return to work after the August 2022 incident had added to the applicant’s ongoing symptoms. Dr Kumar did, however, consider that the direction to the applicant to work in alternative duties was significant. Dr Kumar said that the actions taken by the employer investigating the allegations of misconduct as well as directing the worker to alternative duties were the predominant cause of her psychological injury.
In my view, neither Dr Gill nor Dr Kumar has provided a clear opinion that there was a distinct second injury in the nature of an aggravation of the applicant’s psychological condition to which employment was the main contributing factor. Both experts, appear to suggest that there was a single injury caused by multiple events. A second injury has, however, been accepted and is pleaded in the Application to Resolve a Dispute.
After carefully considering the evidence as a whole, I have formed the view that there were multiple events which exacerbated the applicant’s first injury.
I accept that following her return to work in August 2022, the applicant perceived that she was being isolated, gossiped about or bullied by her colleagues. This is evident from the applicant’s contemporaneous complaint to her Principal and Ms Hourigan’s contemporaneous treating evidence.
I am not in a position to form a view as to whether the applicant was in fact being isolated, gossiped about or bullied, although I do accept that there were real interactions at work that left the applicant with that perception. Ms Hourigan said the applicant was experiencing heightened anxiety and hypervigilance and was hypersensitive to signs of gossip, criticism and comments from others.
Dr Kumar also agreed that further conflicts with her peers following her return to work “added” to the applicant’s ongoing symptoms.
I also accept that the delay in providing the applicant with particulars of the allegations and the prolonged duration of the investigation impacted upon the applicant’s condition. Dr Gill’s opinion in this regard is consistent with Ms Hourigan’s evidence that the protracted nature of the investigation, during which time the applicant was unaware of the content of the allegations for the better part of a year, prolonged her symptoms.
The applicant’s own evidence placed particular emphasis on the letter dated
15 November 2022, including its contents and the language used. The applicant described a clear, further decompensation that coincided temporally with the receipt of that letter. The applicant said that the majority of her recovery had been focused on the comments contained in that letter and, in particular, how she came to be regarded by her employer as a “risk”.
Viewing the evidence as a whole, although I am not prepared to accept that the letter received on 16 November 2022 was the whole cause of an aggravation of the applicant’s condition, I do accept that it was the predominant cause of an aggravation of the applicant’s psychological condition.

Did the 16 November 2022 letter constitute reasonable action with respect to transfer, discipline and/or dismissal?

Having found that the letter received on 16 November 2022 was the predominant cause of an aggravation of the applicant’s psychological condition, the question which arises next is whether that letter constituted reasonable action with respect to transfer, discipline and/or dismissal for the purposes of s 11A(1) of the 1987 Act.
The respondent observed that Mr Brown gave evidence that the applicant was given advance notice of the meeting on 16 November 2022 at which the letter was given to the applicant. The meeting was brought forward to accommodate and convenience the applicant. The letter itself confirmed that no decision had been made about the truth or accuracy of the allegations. The direction to perform alternative duties was a risk management decision that had to be made swiftly after balancing the interests of the applicant against those of her co-workers. Having regard to the nature of the allegations set out in the letter dated 19 August 2022, the decision was appropriate where the health of the applicant’s colleagues was at risk. The letter made clear that the applicant was not being punished. The applicant was advised she could seek reconsideration of the decision to direct her to perform alternative duties. Weighing the interests of all the concerned parties, the respondent submitted that its action in issuing the letter was reasonable.
In contrast, the applicant submitted that the action was heavy handed. Neither that letter nor the previous letters sent to the applicant set out sufficient particulars of the allegations against her. The applicant was also not provided with particulars of the reason for the decision to direct her to perform alternative duties. Possibly as a consequence of the letter being in template format, it contained language that was not in keeping with the actual allegations made against the applicant. The words, “risk to the department” suggested that incredibly serious allegations had been made although the applicant remained unaware what those allegations were. As a result, the applicant submitted that the respondent’s action was not reasonable.

In considering this question, it is relevant to note that the initial letter of 19 August 2022 provided brief particulars of the allegations. Amongst them were allegations that the applicant had made aggressive, derogatory or threatening comments towards or in the presence of staff and had yelled at staff.
Nonetheless, it was determined, at that time, that it was safe for the applicant to continue on in her job while an investigation was being conducted. The applicant was given several directions about confidentiality and acting professionally but she was not required to perform alternative duties.
It is notable that the allegations of aggressive, derogatory or threatening comments and yelling did not appear in the final list of allegations set out in the letter dated 28 June 2023 or the subsequent Findings Report. It could be inferred that during the course of the “evidence gathering phase” of the investigation, those allegations were found to be without substance.
The allegations listed in the 28 June 2023 letter and the Findings Report concerned the applicant asking various staff to complete personal errands between 2005 and 2011 and 2017 and 2022 and the inappropriate assignment of duties to a school learning support officer and allowing the same officer to have time off without a leave request. The Findings Report acknowledged that each of the allegations sustained involved misconduct at a relatively low level.
At some point between 19 August 2022 and 15 November 2022, it was determined that it was necessary for the applicant to perform non-teaching alternative duties while the investigation was underway. The letter dated 15 November 2022 simply indicated that this was because of the “seriousness” of the allegations and the “risk” the applicant posed to the department. The applicant was told she was not permitted to enter the grounds of any department school for any reason or purpose without written approval.
The applicant submits that this change in direction led her to perceive that some new, incredibly serious allegations had been made, of which she was unaware. In the applicant’s experience as a teacher of 27 years, teachers under investigation for serious offences such as sexual misconduct and assault were assigned to alternative duties.
The applicant was given no indication of what new information might have come to light to warrant the change in direction. Although the applicant was advised that she could seek reconsideration of the decision to direct her to perform alternative duties, and in fact did so unsuccessfully, she was not, in my view, provided with sufficient information to enable her to meaningfully challenge the decision.
Some further insight the reasons for the decision to direct the applicant to perform alternative duties appears in the statement from Mr Currie. Mr Currie stated that in the course of interviews with witnesses, some disclosed fear of being victimised by the applicant if they spoke of her behaviour or declined her requests. The interviews tended to confirm that the applicant inappropriately and dishonestly used department resources and disadvantaged students. Given the potential for the applicant’s alleged conduct to bring the department into disrepute, Mr Currie determined that she should be directed to alternative duties.
It is not apparent on the material before me that this explanation was provided to the applicant. The explanation is also somewhat difficult to reconcile with the final list of allegations.
The decision had grave consequences for the applicant’s career and her mental health. The applicant had already made a workers compensation claim in respect of the first injury. The potential impact of the decision was acknowledged by Mr Currie, who said he approved the applicant’s request to perform her alternative duties in a different town to mitigate her stress and anxiety.
I find that there was a material denial of procedural fairness to the applicant arising from the failure to give her sufficient information to enable her to meaningfully respond to the decision that it was no longer safe for her to continue to work in her ordinary duties while the investigation was under way.
As a result, I am not satisfied that the second injury was predominantly caused by reasonable action taken or proposed to be taken with respect to transfer, discipline and/or dismissal for the purposes of s 11A(1) of the 1987 Act.
The second injury is compensable.

Ongoing effects of the first injury

A further dispute between the parties arises with regard to the ongoing effects of the first injury.
The respondent referred to the reports of Dr Kumar dated 13 June 2023 and 14 September 2023. Dr Kumar noted that the applicant had returned to work and was fit for suitable duties in the first of those reports. In the 14 September 2023 report, Dr Kumar found the applicant’s condition was in complete remission. The respondent submitted that, although Dr Kumar subsequently found that the applicant had a persistent depressive disorder, it was a continuation of the second injury and any incapacity during the period claim resulted from the second injury.
I have found above that the second injury was compensable. It remains necessary, however, to determine what the ongoing effects of the first injury were for the purposes of calculating the quantum of any entitlement to weekly compensation.
The contemporaneous treating evidence confirms that the applicant remained incapacitated as a result of the first injury despite her return to work shortly after the 2 August 2022 event.
Ms Hourigan’s evidence described the severity of the applicant’s symptoms in this period. Although the applicant returned to work, Ms Hourigan noted that the applicant would experience significant distress, panic and anxiety on the way to work and had significant and intrusive anxiety around staff members looking at her and gossiping whilst at work. The applicant experienced intense sadness and grief due to the loss of her previously close friendships with her work colleagues. The level of distress was so severe that both Ms Hourigan and the applicant’s general practitioner were encouraging and instructing her to take time off from work.
Ms Hourigan confirmed that from the date of the first injury through until November 2022, the applicant was unable to work full-time hours and was regularly required to take sick leave.
The applicant continued to receive certificates of capacity in respect of the first injury, certifying her as having capacity to engage in some type of employment, up until September 2023. Certificates of capacity in respect of the second injury were issued concurrently.
The certification that the applicant was fit to perform pre-injury duties once departmental restrictions were lifted, dated 6 September 2023, coincided with the supplementary report from Dr Kumar in the same month in which the applicant reported that her mood had improved. The applicant’s symptoms had improved to such an extent that Dr Kumar considered they did not constitute a psychiatric condition. It was noted, however, that the applicant remained on Lovan and Valdoxan.
In his most recent report, Dr Kumar noted that there had been a subsequent deterioration of the applicant’s condition, which he attributed to various work and non-work related factors.
Dr Kumar said the underlying “aggravation” had not entirely resolved as the applicant was still struggling with the aftermath of the decisions by the respondent. Dr Kumar reiterated his previously expressed view that the applicant’s condition related to the allegations made against her, which were later substantiated and being asked to move to another office.
Dr Gill did not see the applicant until 5 October 2024, at which time the applicant was continuing to experience psychological symptoms. Dr Gill said the applicant’s capacity for work was restricted due to the injury. In particular, the injury had impaired the applicant’s ability to perform tasks that require sustained concentration, decision-making and interaction with others. Dr Gill expressed the opinion that the applicant had capacity to perform duties as a classroom teacher but severely limited capacity to engage in high stress roles including her pre-injury role of Deputy Principal. Dr Gill again attributed the incapacity to a series of workplace events.
As noted above, neither Dr Kumar not nor Dr Gill have clearly distinguished between the first and second injury in giving their opinions. As a result, it is difficult to determine on the basis of their reports alone whether any incapacity resulted from the first or second injury. It is apparent, however, that both doctors considered that events prior to the receipt of the letter on 16 November 2022 continued to contribute to the applicant’s current condition.
I find the reports of Ms Hourigan are most helpful in determining the ongoing effects of the first injury. I do not accept the submission that they should be given less weight owing to “treater bias”. Ms Hourigan’s evidence is quite clear in indicating that the effects of the original injury remained unresolved. The effects of that injury were continuing as at
16 November 2022 and continued until appointments ceased due to financial stress in March 2024.
Although Ms Hourigan acknowledged that there was an improvement in the applicant’s condition once the applicant was provided with the full details of the allegations in late 2023, the original injury in August 2022 remained unresolved.
In her most recent report, Ms Hourigan said that although the claim relating to the first injury had been closed, the applicant had not yet demonstrated full recovery from the initial injury. The applicant continued to experience severe anxiety, depression, suicidal ideation and negative beliefs about her self-worth that had originated from the original injury.
After reviewing the evidence as a whole, I find that the applicant has been incapacitated as a result of both the first and second injuries in the period of weekly compensation claimed.

Quantification of incapacity during the period from 1 February 2023

The quantification of the applicant’s incapacity is a complex task given that the applicant has continued to work in suitable duties at varying times since the injuries occurred. It is apparent that the applicant’s incapacity has fluctuated.
At the arbitration hearing, the parties asked to be provided with a further opportunity to attempt to resolve the claim for weekly compensation after the liability disputes were determined by the Commission.
It is appropriate therefore that I make orders for the parties to file signed consent orders or, in the absence of agreement, detailed wages schedules, upon receipt of which the matter will be listed for further preliminary conference.
It was agreed that a general order for medical and related treatment expenses should be made in the event that the liability disputes were determined in the applicant’s favour.

[2025] NSWPIC 79

10 March 2025