Hadji v Canterbury Hurlstone Park RSL Club Ltd

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Hadji v Canterbury Hurlstone Park RSL Club Ltd [2024] NSWPIC 586
APPLICANT:	Dimitrius Hadji
RESPONDENT:	Canterbury Hurlstone Park RSL Club Ltd
MEMBER:	Diana Benk
DATE OF DECISION:	18 October 2024
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987; claim for weekly benefits of compensation due to psychological injury; respondent relies upon section 11A defence that any injury was wholly or predominantly caused by reasonable action taken or proposed to be taken with respect to performance appraisal; Northern NSW Local Health District v Heggie, Hamad v Q Catering Ltd, and Attorney General’s Department v K considered; Held – action taken by respondent was reasonable with respect to performance appraisal/discipline; respondent discharged its onus with respect to section 11A; award for the respondent.
DETERMINATIONS MADE:	The Commission determines: 1. Award for the respondent. A brief statement is attached setting out the Commission’s reasons for the determination.

STATEMENT OF REASONS

BACKGROUND

Mr Dimitrius Hadji, (the applicant) claims psychological injury as a result of the nature and conditions of his employment as an Operations Manager at the Canterbury Hurlstone Park RSL Club (the respondent), specifically alleging he was subjected to humiliation, frivolous allegations and unfair treatment perpetuated by his manager and the Human Resources Department. He seeks weekly compensation from 19 June 2023.
Following an assessment of his workers compensation claim, the respondent’s insurer denied liability with reference to s 11A of the Workers Compensation Act 1987, (the 1987 Act) maintaining psychological injury arose out of the reasonable action of the respondent with respect to discipline/and or performance appraisal and specifically the meeting which raised allegations about conduct on 14 June 2023.
Internal review was unsuccessful resulting in this application to the Personal Injury Commission (the Commission).
Much to my chagrin, this matter has had a protracted history within the Commission relevantly;
(a)    a preliminary conference was conducted on 20 May 2024 at which time directions were issued.
(b)    The matter was subsequently reconstituted to me and proceeded to conciliation/arbitration on 24 July 2024 where the applicant was represented by Ms Grott of counsel instructed by Mr Edward-Joy. The respondent was represented by Mr Robinson of counsel instructed by Ms Bentley. The insurer’s representative was Ms Curray.
(c)    As required, conciliation was undertaken. The matter was subject to much robust discussion, offers and counter offers with negotiations breaking down at the eleventh hour.
(d)    The matter was listed for further conciliation/arbitration on 14 August 2024 as the respondent indicated it would seek leave to cross examine both the applicant and his brother, such being necessary as publicly available information (including Facebook, LinkedIn and the internet), represented and nominated the applicant as holding a position of accounts manager for Lex Enterprises, a company in which his brother, Mr Nicholas Hadji, is a director. The respondent maintains the applicant failed to disclose this employment to his treating and qualified doctors and the Commission, such being relevant to the assessment of capacity.
(e)    The matter proceeded to conciliation/arbitration on 14 August 2024 at which time the appearances remained unchanged. I granted leave to the respondent to cross examine the applicant and his brother, Nick Hadji. The examination was protracted due to what could best be described the hostility of both witnesses, where much of the evidence was given with a degree of self-perception and self-justification. The applicant was argumentative frequently responding to a question with a question and offering inconsistent evidence, just minutes apart, discussed further below. Mr Nick Hadji was argumentative, frequently answering a question with a question, and despite repeated requests by me to answer the question put, continued in behaviour that could only be described as self-serving and peppered with falsehoods. This led to the cross examination taking an inordinate amount of time, despite the best efforts of the cross-examining counsel to encourage both the applicant and Nick Hadji to answer what were, in my view, simple and direct questions. This stage of the arbitration was also protracted as there were many objections as to relevance of the questioning by counsel for the applicant.
(f)    Further, despite reading onto the record the documents before me at the commencement of the arbitration, and obtaining an acknowledgement that such documents constituted all of the evidence, I learned during the course of cross examination, that both parties had attempted to file Applications to Admit Late Documents (AALD) on the eve of the arbitration hearing. The late lodgement of those documents resulted in them being rejected by the Registry, however the parties relied on those documents. Following the hearing, I directed the parties refile those documents with the Registry, (noting there had been no objection to their admission). This non adherence to Commission rules also contributed to delayed decision making.
(g)    Ms Curray was also cross examined. Fortunately her evidence was direct and reliable, discussed below, and also consistent with the evidence of the applicant, who ultimately disclosed that his brother was in the same room with him after the hearing had commenced (a matter denied by Nicholas Hadji).
(h)    Given the protracted cross examination, counsel were unable to make submissions on the day necessitating them to be timetabled, again contributing to further delay.

ISSUES FOR DETERMINATION

The parties agree that the following issue remains in dispute:
(a) whether the injury was wholly or predominantly caused by the respondent’s reasonable actions with respect to discipline/performance appraisal.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)    Application to Resolve a Dispute (ARD) and attached documents;
(b)    Reply and attached documents;
(c)    AALD’s filed by the applicant dated 12 July 2024, 9 August 2024 and 13 August 2024, and
(d)    AALD’s filed by the respondent dated 17 July 2024, 8 August 2024 and 13 August 2024.

BACKGROUND

It is trite statement; however these disputes are invariably complex due to the multiple stakeholders and individuals involved. It helps to set the scene particularly outlining the roles of each individual and background facts; relevantly;
(a)    the applicant commenced employment with the respondent as a barista on 6 June 2021 and was then promoted to Operations Manager at the Camperdown Commons in October 2021 where he was engaged on a full-time basis with a salary package just shy of $150,000 and was responsible for the oversight of not only the establishment but also 25-30 staff, clearly a position with great responsibility.
(b)    Camperdown Commons is a licensed venue which offers a variety of indoor and outdoor dining/drinking spaces as well as hosting private functions and events absent gambling facilities.
(c)    The applicant reported to Karen Cassels, who was/is the Human Resources (HR) Manager, who in turn reported to the Chief Executive Officer (CEO). The records show Ms Cassels requested to speak to the applicant on 14 June 2023 about various workplace events in what was represented as a ‘chat’.
(d)    Jessica Silva was/is employed as the Learning and Development Co-Ordinator for the respondent. She was present at the meeting that took place on 14 June 2023.
(e)    Michaela Suffolk was/is the Duty Manager for the respondent and was present on shift during the alleged serious misconduct by the applicant on 3 June 2023.

Applicant’s evidence

The applicant has provided a number of written statements and was also cross examined.
In his statement dated 27 July 2023, he informs me his current mental health difficulties arose solely from his employment situation and that he has no significant pre-existing conditions contributing to any incapacity. His statement outlines his role and responsibilities, a general lack of training and the absence of any performance issues in the past.
The applicant records being invited to attend a meeting with Karen Cassels “to have a chat” in an informal email. He attended the meeting on 14 June 2023 in which both Karen Cassels and Jessica Silva were present. Discussions were had about rosters and drinking whilst on shift, at which time the applicant maintained he was at a private function and not on roster. The applicant was given a suspension letter at the meeting, informed he was suspended and requested to relinquish his computer and keys. The applicant states “in my mind her decision (referring to Karen Cassels) had already been made prior to the meeting”.[1]
[1] Folio 5 of the ARD.
In the same statement the applicant acknowledges he was actually on the roster on the day in question, it was his oversight and he should have taken himself of it.[2]
[2] Paragraph 42 – Folio 6 of the ARD.
The statement continues by reflecting that the letter for serious misconduct had been typed up before “she spoke to me about it” and “the event hit me hard. I was in a state of shock and depressed. Here I was the boss, being walked out in front of patrons and staff”.[3] He sought medical treatment.
[3] Paragraphs 45 and 48 – Folio 6 of the ARD.
The statement then records an investigation was undertaken, he was advised that he had “done serious misconduct, but the suspension had been lifted and I was due back to work the first week in July, after the medical cert had ended”.[4]
[4] Paragraph 51, Folio 7 of the ARD.
Specifically the applicant states (unedited):
“56.   Protocols and procedures were not followed in the process. Suspension is a result of being a danger to staff or patrons. I am not a danger to patrons or staff.
57.    Then I get told I’m no longer suspended, and I am coming back. I’m either suspended or not suspended make up your mind.
58.    I was not offered a support person. I was not given 24 hours notice. I did not even know what the meeting was about.
60.    If someone is a risk you don’t remove them 11 days after the fact. There are so many wrong doings on their part.
62.    I don’t have any answers. I don’t even know if I want to return. Everything I have worked for 25 years has been thrown out the window.
63.    I was not trying to hide my attendance at the function, or the fact I was having a drink. I would be stupid if I thought I could hide that in front of 200 people and the multiple cameras at the venue. That’s absurd”.[5]
[5] Folios 6 and 7 of the ARD.
The statement dated 28 February 2024 consistently recounts the above events and emphasizes the significant impact the meeting has had on his mental health including a total incapacity for work since the meeting, constant panic attacks, nightmares, persistent anxiety and depression along with a lack of motivation and energy. Memory is now impaired and the applicant is concerned about the future.
This statement also refers to “bullying and harassment” but apart from the above treatment at the hands of Ms Cassels and Ms Silva (associated with the performance management) there are no other instances cited.
In his supplementary statement dated 8 July 2024[6] the applicant alleges his general practitioner, Dr Leo Agagiotis had incorrectly recorded a diagnosis of “past probable bipolar disorder II with Anxiety, depression, OCD symptoms and alcohol binging resulting in DUI”.[7] The applicant continues by saying “I can confirm that I was not diagnosed with any of these conditions.... I feel that he is overstating the extent of my symptoms”. The applicant does however admit to having his driver’s license suspended twice for drink driving many years ago.
[6] Folio 1 – AALD filed by the applicant on 12 July 2024.
[7] Folio 1 – paragraph 3 of the AALD filed by the applicant on 12 July 2024.

Oral evidence

At hearing, the applicant was cross examined (under affirmation) specifically in relation to the internet page of Lex Enterprises which represented him as being employed as an account manager.
The evidence was inconsistent and the applicant was not an impressive witness, frequently answering a question with a question and enquiring about the relevance of the question.
Specifically in relation to the association with Lex Employment, counsel for the respondent asked the applicant a number of questions. The questions (Q) and the answers (A) follow:[8]
[8] These questions have been extracted from my notes and confirmed by review of the audio recording of the hearing.
“Q.    Mr Hadji, I appreciate you don’t have this in front of you, but I think you will have seen this. It’s a letter that includes an extract from Lex enterprises.com.au and a section of that website depicting your face and your first name. Have you seen that image?
A.     Sure, yes, yes.
Q.     Now that your brother’s business that operates that website to your understanding.
A.      Yes
Q.     And that photograph is indeed you?
A.     The photograph is me, yes.
Q.     And it appears to be a professional headshot?
A.     It does
Q.     Who took the photograph?
A.     Can’t recall who took it, probably by whoever did the website. Not sure when it was done. There has never been a role, never been employed, I have nothing to do with Lex Enterprises. It was a marketing ploy. If you look on the website, because I’ve looked and investigated myself, there’s another nine people on there that have never even been a part of it, either family or friends. It was a marketing thing that the web designer put together…and all of the other statements by Kampar who does the accounting for Lex Enterprises, who signed off as a director, that fact that I am on Centrelink, the fact that I am on medication, I don’t think anything else needs to be proven.
Q.     Mr Hadji please just listen to the question and answer what is being asked. The question was ‘who took the photograph’.[9]
[9] Question posed by Member.
A.     I don’t know. I don’t recall. I never went to a photoshoot.
Q.     Unless I misheard you, I think you just said words to the effect of you went to a photographer to do with Lex Enterprises.
A.     No, no, I did not say that at all.
Q.     Do you agree that next to your photograph it has the words account manager?
A.     Those words are there.
Q.     And you were in fact, working as an accounts manager, weren’t you?
A.      Never
Q.     You were aware that your photograph was on the website, weren’t you?
A.     Didn’t recall it. I didn’t even know when it was put on. I have no interest in Lex Enterprises. I don’t recall it being put on.
Q.     You were also given an email address at Lex Enterprises, namely [email protected].
A.     That’s correct
Q.     And do you use that email address
A.     I have been using it for the past 15 years. It has been the same email address that I have always had, even prior to my employment with Canterbury Hurlstone Park. That was the email that I used to get the job at Canterbury Hurlstone Park.
Q.     You would agree with me, would you not, that if somebody had received an email from [email protected] they might form the view that you worked there.
A.     No. I wouldn’t, because I have never worked for Lex Enterprises.
Q.     Mr Hadji, I want to suggest to you that you’ve been working for your brother for about 15 years.
A.     That is entirely a lie, and totally incorrect. I have had other businesses that have had nothing to do with his and proof of those.
Q.     And I want to suggest to you that when you told this Commission in your statements that you haven’t worked for Lex Enterprises, that the evidence was false and intentionally false.
A.     I think you are just fishing, that is my opinion.
Q.     Are you going to respond to my question
A.     I have never been employed by Lex Enterprises. Nothing to prove otherwise. …
Q.     Mr Hadji, I want to suggest to you that earlier on in the proceedings, your brother was in the room with you.
A.     He may have stepped into the room.”

Statement of Nick Hadji

In a statement made on 10 July 2024, Nick Hadji confirms he is the director of Lex Enterprises and denies his brother was ever employed in the company despite being listed/represented as an ‘account manager’ on the company website. Specifically he states no payment was ever made to his brother for services connected to his company and states (unedited):
“8. My brother, Dimitris Hadji has never been employed by my business in any position. He was listed on my website by the web developers in my business to improve the image and look of the company…
“14 I find it offensive that it can be suggested my brother has worked at Lex Enterprises from a screenshot on my website. This does not in any way imply or prove that Dimitris Hadji worked for Lex Enterprises as it suggests….”[10]
[10] Folio 3 of the AALD filed by the applicant dated 12 July 2024.
In oral evidence, the cross examination revealed the following:
“Q.    Mr Hadji, you currently have a computer generated background on your video feed.
A.     Yes
Q.     Please turn that off
A.     Any reason why?
Q.     Your need to answer my questions, not the other way around. Where are you located at the moment.
A.      57 Austin Avenue, Croydon
Q.     Are you with anyone else?
A.     No.
Q.     Do you know where your brother is?
A.     Yeah, he is on the same property in the studio
Q.     When was the last time the two of you were in the same room?
A.     Is this really a question? I don’t know, an hour ago when he came in and had lunch and we had lunch in the kitchen
Q.     Well the truth is, it was after that. It was after this hearing had commenced
A      Sorry, we’re in separate rooms
Q.     I want to suggest to you that you were in the same room when the various participants of this hearing had logged into the hearing link
A.     I am in a separate room
Q.     Mr Hadji, you just said a moment ago that the last time you were in the same room as your brother was about an hour ago. Is that what you said?
A.     Yep
Q.     I’m putting to you that the truth of the matter is that you and your brother have been in the same room after the commencement of these video proceedings
A.     I am in a separate room to my brother
Q.     At some point after you and your brother had logged into this link, you were in the same room
A.     No
Q.     I suggest to you that that is a lie
A.     I am in a separate room. I don’t live in a five storey mansion. I’ve been in a separate room. The house is small, when people move around in this house…I am not living in a five storey mansion. We are in separate rooms before we started and during this Commission. That’s the only answer I’ve got for you. You can ask me the question again and the answer will be the same
Q.     Is it important in your opinion to be truthful?
A.     Yes
Q.     Would it be inappropriate in your view to mislead customers for financial gain?
A.     Is Lex Enterprises on trial?
Q.     Would you regard it as inappropriate to mislead customers for financial gain?
A.     Can you tell me how I have misled customers? It is inappropriate to mislead customers.
Q.     I want to suggest to you that when you say that Dimitrius Hadji was never employed by Lex Enterprises that it false and he has worked there.
A.     You can suggest all you like, but he hasn’t and I have got a letter from one of the partners of the biggest accounting firms to also state that. So you are alleging also that the partner of that firm is also lying?
Q.     Mr Hadji, before the break we were dealing with the website and so far, as it depicts James and Lauren. If you recall those questions, if it be true that James and or Lauren were not working for Lex Enterprises, it would be misleading to the public to say what you have said on your website wouldn’t it?
A.     The website is false in saying that the people on the website are part of my team, yes.
Q.     So you have either misled your potential customer base or you’ve misled this Commission. It must be one of the above, must it not?
A.     In terms of misleading that would be your opinion or someone else’s opinion, it is not my opinion. Having a person on the website is not misleading in any way or detrimental in any way, but that’s a separate story, and that’s entirely up to you - to how you want to determine the outcome.
Q.     Your evidence, your oral evidence has been consistently to the effect that the people you have mentioned on the website and your brother have not worked for Lex Enterprises?
A.     Yes. Correct
Q.     But you accept that your website represents that they have?
A.     Now the website does represent that these are people that could be part of my team which is misleading if you want to take it to your level or opinion, but like I said to you they were there to bolster the look of the company. That’s my only crime.
Q.     And your brother has had an email address with the Lex Enterprises domain name for many years, has he not?
A.     Correct.
Q.     I want to suggest to you that you gave him the email address because he was working for you?
A.     Untrue. He has never worked for me. Never has, never will and probably never will.
Q.     Is it fair to say that you outsource a lot of the work?[11]
A.     Yes. Most of my work is outsourced. Nearly all of our work, we have been operating on paying subcontractors for the entire time.”
[11] This question was posed by the applicant’s counsel.

Evidence of Ms Catherina Curray

Ms Curray was cross examined by the respondent. As indicated above she is the insurer’s representative. Her oral evidence confirmed that both the applicant and his brother were in the same room after the hearing had started. This was conceded by the applicant although disputed by Nick Hadji. I found her testimony to be credible albeit probably unnecessary given that the applicant had agreed in cross examination that his brother was with him as “He may have stepped into the room”.

Third party evidence

Paul Kamper, Partner – Kamper Chartered Accountants in his letter dated 2 August 2024[12] stated:
“Kamper Chartered Accountants have served as the accountants of Lex Enterprises Pty Ltd ATF the Hadji Family Trust for over 20 years and can confirm that Dimitris Hadji has never been an employee of the company”.

Respondent’s evidence

[12] AALD filed by respondent 9 august 2024 – Folio 8.

Karen Cassels

As indicated above, Ms Cassels is the HR manager for the respondent. In her statement dated 2 August 2023[13] she declares:
[13] Folios 18 to 28 of the Reply.
(a)    she has been the group HR Manager and has been employed by the respondent for a period of 17 years and is responsible for “hiring and firing” across the entire group;
(b)    the applicant reported directly to her;
(c)    that various team members had discussions with the applicant in the past (on an informal basis) regarding drinking whilst on shift;
(d)    she identified concerns regarding the applicant’s time and attendance stating “there were big anomalies in the hours he was supposed to be working compared to what hours he was working onsite. There was no trust in his working hours and execution of work”;[14]
(e)    the applicant had failed to report an injury suffered by a staff member Michaela and encouraged Michaela to continue to work;
(f)    the applicant was rostered on to work on 3 June 2023 and claimed that he had worked from 10.00am to 5.00pm although log in records reveal he logged in at 12.12pm and logged out at 1.30pm, sending two emails in the interim;
(g)    CCTV footage shows the applicant attending a private function on site on 3 June 2023, where he ordered double shots, despite this being against policy;
(h)    despite claiming to be at a private function, the applicant spent most of the time within staff areas drinking, walked behind the bar, asked a staff member to do something with the till, walked into the cool room, got a key to the office and went into the safe area and sent one email giving the appearance that he was on shift. He was also seen to order two beers for a staff member which he put onto the function tab and not his own;
(i)    she felt compelled to raise the issues with him. She attended the site on 13 June 2023, but as the applicant was not present, sent him an email asking to speak to him the next day;
(j)    a meeting was held on 14 June with the applicant and Jessica being present and initially discussed the anomaly concerning hours. The issue of drinking whilst on shift was also raised but denied by the applicant who maintained he was not on shift;
(k)    given the seriousness of the matter, “Dim was suspended on the spot as a result of serious misconduct and being under the influence of alcohol while on shift. He was suspended on the spot because I had suspicion, he was not working the hours he said he was, and he was also drinking on the job”;[15]
(l)    it was a paid suspension pending further investigation with a pre-warning that the matter could lead to termination. He was invited to make a statement during the suspension period and a show cause letter was issued. He was requested to return his key and laptop and leave the premises immediately. He was offered access to the Employee Assistance Program (EAP), and
(m)     since the investigation another bar tab opened by the applicant on 10 June has been identified, remains open and unpaid.
[14] Folio 22 – paragraph 24 of the Reply.
[15] Folio 26 paragraph 51 of the Reply.

Statement of Jessica Silva

As indicated above, Ms Silva is the learning and development coordinator for the respondent and was present at the above interview. In her statement dated 2 August 2023 she confirms:[16]
(a)    she is not the supervisor of the applicant and her interactions were minimal as her focus is the onboarding of new staff;
(b)    she was a witness to the meeting and records the applicant reacted well but did change his story to justify himself, and
(c)    no other persons were present at the meeting but there were two staff members in the yard who given their distance were unlikely to hear the conversation. Chefs were about 20 meters away. His keys and laptop were given to her and he left the premises voluntarily.
[16] Folios 31 to 33 of the Reply.

Statement of Michaela Suffolk

Ms Suffolk is a duty manager for the respondent and confirmed she was working at the time of the above private function which had been formally booked between 2.00pm and 7.00pm on 3 June 2023. Relevantly she states that the applicant was:
“…drinking spirts of some kind during this. It was very strange; he was working but not working. He was drinking and was not listening to me about RSA regulations. He is the licensee; it will be his license that will be messed with if he breaches regulations”.[17]
[17] Folio 39 paragraph 30 of the Reply.

Disciplinary/performance management process

At the meeting, it is undisputed that a suspension and invitation to show cause meeting letter[18] was handed to the applicant but it also appears to have been emailed to him at [email protected]. The letter is lengthy but relevantly:
(a)    confirms the meeting took place and the matters discussed;
(b)    that employment was being suspended pending an allegation into alleged serious misconduct – namely working under the influence of alcohol on 3 June 2023;
(c)    indicates the requirement to attend a show cause meeting at 10.00am on Monday, 19 June 2023 at the Canterbury Hurlstone Park RSL Club which would be chaired by People & Development Manager, Karen Rybczynski and witnessed by Damian Hughes, Group Gaming and Business Analysis Manager;
(d)    provides an opportunity to show cause as to why discipline action should not be taken in writing via email no later than 5.00pm on 16 June 2023 with that information being considered in determining whether to continue or terminate employment;
(e)    an invitation to be accompanied by a support person;
(f)    reassured that there would be the opportunity to respond to the alleged misconduct;
(g)    notifying that a failure to attend the meeting may result in a decision being made in his absence, and
(h)    reassuring that the process was confidential with an undertaking made by the respondent not to discuss the matter unless required for business purposes.
[18] Folios 43 and 45 of the Reply.
On 16 June 2023,[19] the applicant responded to the issues raised but clearly volunteered more information than what was required. The show cause letter only invited him to respond to the issue of the serious misconduct alleged relating to working under the influence of alcohol on 3 June 2023. However, his letter addresses the issues relating to rosters and times, a staff member for whom he shouted drinks (using someone else’s tab!) and drinking during the shift but stating relevantly in relation to the issue at hand:
“I had made it clear from my attendance time, invitation and gift, that the only reason I was there was for the event and was not a manager on duty. Obviously in my position and love for the venue, I could not completely ignore certain things or try to abstain from doing anything. This is part of my DNA and I always did and always will go above and beyond regardless of when my official shift states I should be working.
I have never tried to roster myself on to defraud the club for hours not worked. As stated above, I have always done more hours than required for the last two years and my roster never reflected my hours on site.
Although at first glance it may have seemed like a serious misconduct, I believe that my logical explanation and proof demonstrates that this is simply a misunderstanding.
…in regard to attending this Monday’s show cause meeting, I will unfortunately not be able to attend due to my current mental state.
Being walked off the premises in front of all my staff, has caused great harm and anguish and attending this meeting could further impact my mental state”.
[19] Folios 48-50 of the Reply.
In response to the above letter, the respondent issued a ‘continuation of suspension & invitation to show cause meeting’ letter dated 19 June 2023[20] which again was emailed to the applicant at [email protected] confirming a continuation of the suspension pending an investigation and rescheduling the show cause meeting to 22 June 2023 where it was proposed that Karen Cassels would preside over the meeting with Dean Thomas, CEO being the management witness. The terms of the letter mirror the original invitation dated 14 June 2023.
[20] Folios 46 and 47 of the Reply.

Medical evidence

Dr Kaplan, consultant psychiatrist, was qualified by the respondent. In his report dated 26 July 2023[21] he diagnosed adjustment disorder with depression wholly caused by the performance appraisal meeting on 14 June 2023. He reported some improvement in symptoms since leaving the workplace and suggested a graduated return to work within two weeks commencing at 20 hours and then adjusting to full hours.
[21] Folios 81-87 of the Reply.
Dr Khan, consultant psychiatrist, was qualified by the applicant and reported on 22 November 2023[22]. As regards causation, he was in agreement with Dr Kaplan. A diagnosis of major depressive disorder and anxious distress was made. Dr Khan recorded the applicant claimed the actions of the respondent were not reasonable because he was not given sufficient notice of the meeting; was not provided with an agenda; was not offered a support person and the meeting was held in a public space where there was no privacy. As regards capacity, Dr Khan considered the applicant was totally incapacitated from work and required treatment.
[22] Folios 42-49 of the reply.
Medical certificates issued by Dr Leo Agagiotis, general practitioner certify the applicant as being unfit for work due to “psychological trauma, anxiety, stress and depression’ arising ‘from false accusations being laid upon him”.[23]
[23] Folios 52-64 of the ARD.

SUBMISSIONS

On behalf of the respondent, the following was submitted:
(a)    the evidence of the applicant and his brother cannot be accepted as true unless corroborated, both are liars and the overwhelming preponderance is that the applicant has been employed by his brother. Both lied about being in the same room together. The applicant’s image on a company website has been used to advance his brother’s commercial activities. He has been promoted to the world at large as being an employee of Lex Enterprises Pty Ltd;
(b) the applicant’s dishonesty about working for his brother means that he has not discharged his onus on proving incapacity. There must be an Award for the respondent on the question of weekly benefits even if the s 11A defence fails;
(c)    injury is wholly or predominantly the result of the discipline and performance appraisal process which was reasonable;
(d)    both Dr Khan and Dr Kaplan have concluded that causation is derived from the performance appraisal meeting. Whilst the ARD claims bullying, there is no evidence of any such behaviour whilst employed by the respondent and further Dr Khan has quoted Dr Kaplan’s opinion that the worker’s condition “is wholly caused by the performance appraisal meeting that occurred on 14 June”, and
(e)    given the medical consensus on causation, the only liability issue remaining is reasonableness, which is a question of fact requiring objective assessment but does require credit issues to be resolved.
On behalf of the applicant, it was submitted:
(a)    the applicant remains totally incapacitated and has never worked for his brother’s company Lex Enterprises;
(b)    the respondent bears the onus to establish that the injury was wholly or predominantly caused by the reasonable actions taken or proposed to be taken by the employer with respect to the disciplinary action or performance appraisal;
(c)    both qualified medical experts agree the whole or predominant cause of the psychological injury was the meeting that occurred on 14 June 2023, but the applicant submits that the conduct of the respondent cannot be seen as objectively reasonable particularly when reconciled to the well-established principles in Heggie[24] because:
[24] Northern NSW Local Health Network v Heggie [2013] NSWCA 255.
(a)the applicant was not provided with any notice that a serious matter that could affect his employment was going to be discussed at the meeting. The applicant should have been informed of potential breaches in policy and provided with relevant details;
(b)the applicant was not given a support person and was not provided with an opportunity to have someone with him;
(c)it can be assumed that a decision had already been made that the applicant was to be suspended as a letter had been prepared to that effect, clearly devoid of procedural fairness;
(d)there was no history of performance issues on the part of the applicant;
(e)the timeframe for responding to the letter was brief thereby preventing the applicant from properly processing what had occurred, obtaining advice and responding;
(f)a reasonable employer would have ensured that the applicant was provided with adequate notice of the gravity of the allegations, ensured a support person, held the meeting in a private space and given him adequate time to address matters of concern.
(g)given these failures, the respondent has failed to discharge its onus in respect of s 11A;
(d)    as regards capacity, the medical evidence (with the exception of Dr Kaplan) certifies the applicant with significant symptoms of depression and anxiety, requiring regular medical management by both his treating general practitioner and clinical psychologist and that he remains totally incapacitated for any form of work;
(e)    whilst the applicant may have been promoted on the internet as an account manager for Lex Enterprises, he has no experience to undertake such a role and the evidence of Kampar Chartered Accountants confirms that the applicant has never been an employee of Lex Enterprises;
(f)    other than the photograph of the applicant on the Lex Enterprises website identifying him as an account manager, there is no evidence of the applicant having worked since his injury and the evidence of the accountants must be accepted as probative and reliable. The applicant and his brother have satisfactorily accounted for the internet profile;
(g) there should be a finding that the applicant suffered a psychological injury on 14 June 2023 in the course of his employment with the respondent; the respondent has failed to discharge the onus required of s11A; the applicant remains totally incapacitated since 14 June 2023 and be entitled to benefits at the maximum statutory rate from the date of injury pursuant to s 36 and 37 of the 1987 Act.
In reply, the respondent submitted:
(a)    the activities of the respondent were reasonable. Concerns in relation to drinking alcohol and pouring double strength drinks, contrary to policy were identified. The respondent had an obligation to investigate such matters given that is operates a licensed venue and the applicant held a position of responsibility, that is, operations manager. The applicant was afforded procedural fairness and was allowed to put in a statement. In short, a significant issue had been identified, the respondent had an obligation to bring it to the applicant’s attention and allow him an opportunity to comment and the process has been procedurally fair;
(b)    there is no requirement to give the applicant an agenda for any informal first meeting, nor is there a requirement in all cases for the provision of a support person. It is not open to find that the respondent had already made a decision simply because a letter of suspension had been prepared. It was part of a proper process only executed when the applicant had not satisfied enquiries. Had enquiries been satisfied, the letter in all probability would have become redundant. Further, the letter sets out a suspension and not termination of employment, with an opportunity to respond in a timely fashion, and
(c)    the accountant’s evidence is unchallenged. The accountant acts on instructions and prepares accounts on data submitted. It is not submitted that the accountant is a liar, but rather he has been lied to.

APPLICATION OF THE LAW, FINDINGS AND REASONS

A psychological injury must satisfy the definition of injury within the meaning of s 4 of the 1987 Act (relevantly)
"‘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…”
Section 11A (1) of the 1987 Act provides:
“No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by, or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.” (my emphasis)

What is a psychological injury?

The parties agree that the applicant has suffered a psychological injury. This is defined in s 11A (3A) of the 1987 Act as:
“‘psychological injury’ is an injury (as defined in section 4) that is a psychological or psychiatric disorder. The term extends to include the physiological effect of such a disorder on the nervous system.”
Authorities establish the following:
(a)    in order to prove that a psychological injury has occurred, an injured worker must prove that either the nervous system was so affected, that a physiological effect was induced or that there has been an aggravation, acceleration, exacerbation or deterioration of a pre-existing psychiatric condition. Mere emotional impulse, anxiety state, frustration and emotional upset, or a “straight litigation neurosis”[25] do not constitute psychological injury.[26] (Stewart)
(b)    A finding of psychological injury requires expert evidence that such an injury is present.[27] (Calka)
(c)    In considering the issue of establishing psychological injury in circumstances of the worker's perception of events at work, Roche DP in Attorney General's Department v K,[28] provides:
(a)employers take their employees as they find them. There is an “egg-shell psyche” principle which is the equivalent of the “egg-shelled skull” principle (Spigelman CJ in Chemler at [40]);
(b)so long as the events within the workplace were real, rather than imaginary, it does not matter that they have affected the worker's psyche because of a flawed perception of events because of a disordered mind;
(c)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”
(d)it is not necessary that the worker's reaction to the events must have been “rational, reasonable and proportionate” before compensation can be recovered.
[25] New South Wales v Rattenbury [2015] NSW WCCPD46.
[26] Stewart v New South Wales Police Service (1998) 17 NSWCCR 202.
[27] HammondCare v Calka [2016] NSWWCCPD 2 at [118]-[123].
[28] Attorney General's Department v K [2010] NSWWCCPD 76.

What does “wholly or predominantly” mean?

Again, the parties agree that the medical evidence establishes that the injury was “wholly or predominantly” caused by the workplace events on 14 June 2023. I note this term is not defined by the 1987 Act. Review of authorities establish the following:
(a)    “wholly” and “predominantly” are separate concepts and only one of the definitions needs to be satisfied. The words are independent of each other;
(b)    it is generally accepted that it means “mainly or principally caused”;[29] (Poonan)
(c)    the question of causation must be addressed by medical evidence, and[30] (Hamad)
(d)    causation is a question of fact to be determined on the evidence in each case.[31] (Kooragang)
[29] Ponnan v George Weston Foods Ltd [2007] NSWWCCPD 92 (Ponnan).
[30] Hamad v Q Catering Limited [2017] NSWWCCPD 6.
[31] Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452.

What does “reasonable action” mean?

We have now arrived at the epicentre of the dispute. The respondent maintains it did engage in reasonable action; the applicant maintains it has not. Again, this term is not defined by the 1987 Act. It is difficult to succinctly define, however the following non exhaustive summary of key principles has been extracted from authorities:
(a)    in determining whether conduct was reasonable, all relevant factors must be taken into consideration including the rights of both employee and employer;[32] (Rashov)
(b)    the test is objective and must weigh the rights of employees against the object of the employment. Whether an action is reasonable should be attended, in all circumstances, by questions of fairness;[33] (Irwin)
(c)    when considering the concept of reasonable action the Court is required to have regard not only to the end result but to the manner in which it was effected;[34] (Ivanisevic)
(d)    the reasonableness of a person's actions is assessed by reference to the circumstances known to that person at the time the action is taken;[35] (Heggie)
(e)    the assessment of reasonableness should take into account the rights of an employee, but the extent to which these rights are to be given weight in a particular case depends on the circumstances;[36] (Heggie)
(f)    reasonableness is judged having regard to the fairness appropriate in the circumstances, including what went before or after a particular action;[37] (Melder)
(g)    procedural and policy documents of the employer will be relevant evidence to consider. However, reasonableness will not be established simply because the employer complied with their own protocols if those protocols were not reasonable, and[38] (Aravanopules)
(h)    the concept of reasonablenessdoes not require a counsel of perfection. It requires, 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.
[32] Aristocrat Technologies Australia Pty Ltd v Rashov [2005] NSWCCPD 66 at [82].
[33] Irwin v Director General of School Education (NSWCC, Geraghty J No 14068/97, 18 June 1998, unreported).
[34] Ivanisevic v Laudet Pty Ltd (unreported, 24 November 1998).
[35] Northern NSW Local Health Network v Heggie [2013] NSWCA 225.
[36] Northern NSW Local Health Network v Heggie [2013] NSWCA 225.
[37] Melder v Ausbowl Pty Ltd [1997] 15 NSWCCR 454.
[38] Rail Corporation NSW v Aravanopules [2019] NSWWCCPD 65 at [81].

What does performance appraisal mean?

Authorities establish;
(a) an extended and continuing assessment process may not be a performance appraisal. The process and the time taken to engage in it must be objectively reasonable in all of the circumstances of the case.[39] (Dunn)
(b) Performance appraisal:
“is not a vague, continuing, informal process. It is defined to be somewhat like an examination, not a continuing assessment. Performance appraisal is more like a limited discreet process, with a recognised procedure to which the parties move in order to establish employee’s efficiency and performance”.[40] (Irwin)
[39] Dunn v Department of Education and Training [2000] NSWCC 11.
[40] Irwin v Director General of School Education NSWCC 14068/97 Unreported.
Medically, there is no dispute that the psychological injury arose wholly from the performance appraisal meeting on 14 June 2023. There was a suggestion in the ARD of “workplace bullying and harassment” but there is no evidence of such events occurring prior to 14 June 2023. It appears that the applicant has perceived the events of 14 June 2023 and those related to the performance appraisal process as being bullying and harassment, but there is no evidence to suggest that the respondent engaged in such behaviour and nor can it be said that the performance related discussions fell within the definition of bullying and harassment.
I will now proceed to assess whether the actions of the respondent were “reasonable action” with reference to the authorities summarised in paragraph 42 above, and with reference to s 11A noting that it is axiomatic that each case turns on its own facts.
I have extensively considered the events on 14 June 2023. It is not to be forgotten that the applicant held a positon of great responsibility with the respondent, and was required to fulfil the obligations of the role of operations manager of an establishment serving liquor which included responsibility for 25 to 30 staff; responsibility and a duty of care to his patrons, responsibility for the oversight of security of the facility and cash management (amongst other matters). It is a role with many hats, requiring multidisciplinary skills and the ability to juggle many balls in the air at once. Some may say it is a poison challis as the hospitality industry is fraught with its own unique challenges particularly given the need to ensure the safety, wellbeing and enjoyment of patrons all the while providing such services in a highly regulated and competitive environment.
The role of an operations manager in a licensed establishment is not just confined to the internal policies of the respondent but also carries with it obligations imposed by Liquor and Gaming NSW (who oversee and monitor the responsibilities of licensees and managers in establishments such as that carried out by the respondent), the Responsible Service of Alcohol Guidelines (RSA), the Liquor Regulation 2018 – NSW and finally but also significantly the Liquor Act 2007. The applicant claims in various statements that he did not receive training; however I reject such a statement as in other statements he tends to suggest that he was aware that he had obligations in relation to the consumption of alcohol, and had over 15+ years’ experience in the hospitality industry.
The applicant maintains that the respondent was not objectively reasonable in its actions concerning the performance management. I reject this. When it came to its attention that its operation manager was drinking whilst on shift and also consuming “double shots” I find that the respondent’s hands were tied, it was required to investigate such conduct given the obligations, laws and regulations attached to its license summarised in the above paragraph. Failure to do so would see a breach of not only the above laws but also those relating to Workplace Health & Safety. I note that at no time has the applicant denied drinking on 3 June 2023 and specifically does not deny drinking double shots which are against the respondent’s policy. His claim is that he was not on the roster, but he has acknowledged that technically he was on the roster and had failed to take himself off. This being the case, he was legally recorded as being on shift and with that came all of the obligations of him to his employer and vice versa. The applicant also maintains that whilst he was not on shift, he did undertake work on the floor as “it is part of my DNA”, such conduct thereby suggesting that he did in fact engage in work duties on that day. I find that the applicant cannot now claim that he was not on shift given that the roster recorded him being present. Had he suffered an injury on that day, given he was officially recorded as being on the roster, the employer would be responsible for indemnifying him for any injury suffered, however, if he was not on the roster, and was just a visitor to the establishment on a rostered day off, no such liability would accrue at least under the workers compensation provisions. It’s a situation where you cannot have your cake and eat it too.
The applicant further contends that he was not given appropriate notice of the meeting, not offered a support person, the meeting was held in a public place, the interactions were observed by staff and a suspension decision had been made prior to the meeting as a letter had already been generated prior to the meeting.
As regards appropriate notice, the respondent informed the applicant of the need for a discussion “a chat” on the day prior to the meeting. This is appropriate. At that stage preliminary enquiries were being made as to the applicant’s conduct. As the enquiries were only in their infancy and future conduct could not be determined until the applicant had responded to the allegations put to him informally at the meeting, I find that no agenda or support person was required at that stage, given the purpose of the meeting was to put to the applicant the concerns of the respondent and develop next steps in response to his answers. It was the initial stage of any disciplinary action. I find that the notice period for the discussion was entirely reasonable. I am of the view, that it is psychologically cruel for a supervisor to put a worker on notice of a meeting into the future, say in a weeks’ time, particularly in circumstances where the discussion is only a fact finding one. Such a delay would cause anxiety, concern and frustration. A short turnaround between notice and meeting is desirable and professionally, psychologically, emotionally and socially appropriate. I find that the respondent’s action in scheduling a meeting one day after notifying the applicant is reasonable. I note that the applicant has been critical in the respondent’s delays and his statement was critical of the fact that “he was removed 11 days after the fact.”[41] The respondent’s swift action in arranging a meeting once issues were identified are reasonable.
[41] See paragraph 14 above.
I also find that the respondent was not required to give the applicant an agenda at that time and that is actions in this regard are reasonable. To have provided such an agenda could have possibly impeded or delayed enquiries, compromised evidence (as the applicant still had custody of his laptop and keys) or possibly give the appearance that a determination/conclusion had been made before the applicant had been given an opportunity to respond to various initial concerns of the respondent. I am satisfied that the discussion that was to take place on 14 June 2023 was a fact finding preliminary discussion to raise issues that the respondent maintained potentially amounted to serious misconduct. An agenda would have been appropriate at any latter stage of an investigation or in circumstances where the applicant would have been unfamiliar with operational matters that were raised. This was not the case here.
The applicant maintains that a decision had been made as a letter had been drafted prior to the meeting suspending him immediately after it had taken place. I cannot find that this is the case. The meeting clearly raised a number of matters including time theft, breaches of occupation health and safety and intoxication. The letter suspending services was limited to the allegation of working under the influence of alcohol. Again, the applicant has not denied drinking and conceded that he was on the roster and despite “not working” was in fact ‘working’ as it is “in his DNA”. (It is noteworthy that in his response to the respondent on 16 June 2023, the applicant stated, “at first glance it may have seemed like serious misconduct”. No doubt the applicant would now argue that this statement was made in the absence of legal advice, however I would reject this, as I find this observation is made through the lens of an experienced operations manager.) Had the respondent formally made a decision relating to all misdemeanours raised in the meeting, the grounds of time theft and occupational health and safety breaches would also have been incorporated into the letter, presumably to strengthen its position relating to any possible suspension or termination. This did not occur. True, the applicant was served with the letter immediately after the interview, but such service is necessary to ensure that the respondent had properly notified the applicant of next steps and confirmed receipt. I can see how the applicant would consider such a decision as having been premade, but immediate service of the show cause letter protected not only his rights but also those of the respondent, in both the industrial and liability sphere. It also armed the applicant with enough information to secure immediate advice, whether legal and/or medical rather than awaiting service of any letter by mail or electronically.
I note the applicant alleges the meeting was in a public space and overhead by other staff members. I do not accept this. I accept that whilst the meeting was in an outdoor area, I do not accept that it was overheard by others. I make this finding as I note that the respondent has been very careful to highlight the confidentiality of the investigation in all of its communications with the applicant. There is no evidence to support that any staff heard the discussion.
The applicant maintains that the process was not reasonable as he was not given adequate time to respond to the allegations, however he did respond and it was on the basis of the explanations contained in his communication dated 16 June 2023 that a decision was made to return him to work, and terminate the suspension.
The applicant asserts in his statement “Suspension is a result of being a danger to staff or patrons. I am not a danger to patrons or staff.” This is a narrow and one dimensional interpretation of “suspension” and suggests a lack of insight on the impact of drinking whilst on shift not only with respect to his obligations to patron and staff safety in an environment where there is cash and liquor handling, but also in relation to the obligations imposed under the various Acts, Regulations and Protocols outlined in paragraph 47 above.
Examination of the show cause letter establishes a clear time table. It advises the applicant of his rights and responsibilities and likewise explains the process, procedure and personnel involved in the matter. The extension to the show cause was appropriate given the applicant nominated he was not mentally fit to participate in such an interview and because the respondent had genuinely taken note of the applicant’s responses and conducted further investigation as a result, requiring an extension of time.
I find that the overall manner in which the disciplinary action/performance action was carried out was entirely procedurally fair constitutes reasonable action. It ultimately did result in the applicant stating his case, his responses being considered, an investigation being undertaken and the suspension ultimately lifted as a result. I find it was efficiently timetabled and whilst I appreciate that there was a delay in the investigation findings being furnished to the applicant, the suspension had been lifted and so the delay in the provision of such findings does not impact on any ‘reasonableness’ and nor can it be said to have been a denial of procedural fairness in the overall context of the matter. I note that by this time the applicant had already suffered injury.
I find the respondent has discharged its onus on the balance of probabilities that the applicant’s injury was predominantly caused by reasonable action taken with respect to performance appraisal/discipline. In making this finding I have had regard to the authorities mentioned in paragraph 42 above.
Given the above finding, I am not required to assess incapacity, however, it would be remiss of me not to do explore the issue given the extensive evidence proffered on this point, however, will do so with caution noting that discussion is technically redundant. I make the observation, that even if the respondent had failed to discharge the onus in respect of s 11A, that I would not have made an award in relation to weekly payments in favour of the applicant. This is because I was unconvinced by the evidence on this point.
The applicant and his brother have openly represented that he is an accounts manager on the Lex Enterprises website. The evidence suggested this was an innocent action designed to bolster business and was a marketing ploy but simply put, such misleading statements are a serious breach of consumer laws.[42] Further comment is beyond my jurisdiction, however, the statement goes to the issue of credit. The evidence points to false representations being made by Lex Enterprises which can result in commercial/consumer legal repercussions if proven. Alternatively if the representations on the website regarding personnel and the services they offer are ultimately claimed to be true, (to escape any consumer sanction), the applicant’s case is weakened with respect to incapacity. This is a classic ‘catch 22’. Either way, the actions are dishonest and the attempts at self-justification/explanation of the action, in my view disingenuous.
[42] >
Counsel for the applicant raised there is no evidence that the applicant was employed by Lex Enterprises and referred to the letter from the accountant. The accountant has indicated that the applicant was not an employee of Lex Enterprises, however the evidence of Nick Hadji was that the company only has two employees, that is, his wife as the bookkeeper and Natalie Saliba, who is in charge of social media. Nick Hadji’s evidence was the balance of services are provided by subcontractors. Notably, the letter from the accountant does not exclude the applicant as a subcontractor and despite nominating a family trust structure, does not exclude the applicant as beneficiary. I would have expected the accountant to have addressed such important legal arrangements, but again nothing turns on this given my ultimate findings.
The contention that the applicant is employed by Lex Enterprises to some degree is supported in part by the representations made on the website, his continual use of the Lex Enterprises email domain, (especially given that email addresses are easily available via other platforms (and at no cost), yet there is a persistence in using this address) and finally corroborating statements by others made in this matter (which I have not unpacked given my findings). I have not disregarded the protests of the applicant and his brother but overall find that I cannot accept them due to a lack of credibility.
The applicant’s evidence was inconsistent. Initially he stated he had undergone a professional headshot by the person who made the website and only minutes later denied having such a headshot done or having any knowledge of how and when the information on the site came to be.
Mr Nick Hadji expressed he found “it offensive that it can be suggested my brother has worked at Lex Enterprises from a screenshot on my website. This does not in any way imply or prove that Dimitris Hadji worked for Lex Enterprises as it suggests”. Offence noted; however this is precisely the reaction that he sought from the general public by representing that his brother was the accounts manager. His ‘marketing ploy’ has been a success (albeit with the wrong audience!) and his offence therefore is difficult to understand given that he achieved the result sought.

I was also troubled that both brothers had represented that they had not been in the same room once the hearing had started, although the applicant ultimately conceded that they were present for a short time, independently verified by Ms Curray.
There is a view expressed in the maxim “falsus in uno, falsus in omnibus” which holds that a witness who has proved to have lied on one matter will be willing to lie on all matters. Obviously, this is the case with a deliberate lie, but it is not universally true that a witness whose evidence is disbelieved on one matter should be disbelieved totally, however, credibility is weakened by the false representations made. Overall, given the corroborating evidence including the representations made on the Lex Enterprise website (which presumably accord with Consumer Laws given substantial penalties associated for false and misleading declarations), previous representations made to various individuals suggesting involvement in Lex Enterprises, the continual use of the Lex Enterprises email address, and lack of credibility, I am not satisfied that the applicant has been candid about his connection with Lex Enterprises and so has failed to discharge his onus in relation to incapacity.

SUMMARY

For the reasons above, I find that the psychological injury was predominantly caused by the reasonable action taken by the respondent with regards to performance appraisal. This means the s 11A defence succeeds and there will be an award for the respondent.

[2024] NSWPIC 586

18 October 2024