Hartley v Dux Manufacturing
[2008] NSWWCCPD 55
•30 May 2008
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE
COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Hartley v Dux Manufacturing Pty Ltd and anor [2008] NSWWCCPD 55
APPELLANT: Paul Hartley
FIRST RESPONDENT: Dux Manufacturing Pty Ltd
SECOND RESPONDENT: Unidex Consulting Pty Ltd
FIRST RESPONDENT’S INSURER: CGU Workers Compensation (NSW) Ltd
SECOND RESPONDENT’S INSURER: CGU Workers Compensation (NSW) Ltd
FILE NUMBER: WCC7399-07
DATE OF ARBITRATOR’S DECISION: 21 January 2008
DATE OF APPEAL DECISION: 30 May 2008
SUBJECT MATTER OF DECISION: Psychological injury; section 11A of the Workers Compensation Act 1987.
PRESIDENTIAL MEMBER: President Greg Keating, DCJ
HEARING:On the papers
REPRESENTATION: Appellant: Lee, Piesley & Foley Lawyers
First Respondent: Turks Legal
Second Respondent: Turks Legal
ORDERS MADE ON APPEAL: The decision of the Arbitrator, dated 21 January 2008, is confirmed.
No order as to costs of the appeal.
BACKGROUND TO THE APPEAL
On 15 February 2008 (‘the Appellant/Worker’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 21 January 2008.
The Respondents to the Appeal are Dux Manufacturing Pty Ltd (‘the First Respondent/the Employer’) and Unidex Consulting Pty Ltd (‘the Second Respondent’), both of whom are represented by the one solicitor and have jointly filed a Notice of Opposition to the Appeal.
Mr Hartley was employed as a process worker/machine operator with the First Respondent from December 1993 until his employment terminated on or about 6 August 2004. He subsequently obtained work as a process worker with the Second Respondent in September 2004 and continued in the employ of the Second Respondent until his employment terminated on 22 March 2006.
The Worker filed an Application to Resolve a Dispute in the Commission on 27 September 2007. The injuries and compensation claimed in the Application as against the First Respondent were substantially amended at the arbitration hearing over objection from the First Respondent.
In the application, as against the First Respondent, the Worker claimed injury to his back from bending and lifting and psychological injury as a result of being sexually harassed by a co-worker. He claimed lump sum compensation under section 66 and section 67 of the Workers Compensation Act 1987 (‘the 1987 Act’), for permanent impairment of the back and permanent loss of efficient use of both legs, together with compensation under section 67 for pain and suffering. He also brought a claim under section 60 for payment of $18,765.00 medical expenses. At the hearing the Worker amended the claim against the First Respondent, particularising the injury to his back on 30 August 2000 when he slipped moving a water heater onto a pallet and claiming psychological injury arising out of the incidents leading up to the termination of his employment on 6 August 2004. The Worker was refused leave to bring a claim against the First Respondent for weekly compensation payments under section 40 for the period 6 August 2000 to 6 September 2004 and from 3 July 2005 to 1 April 2007.
The incidents leading up to the Worker’s cessation of employment with the First Respondent involved a verbal altercation between the Worker and a co-worker which escalated with the Worker throwing a can of spray paint and a pneumatic drill at the co-worker on or about 3 August 2004. After the incident the Employer conducted an investigation and on 6 August 2004 the Worker was given the opportunity to resign or face summary dismissal for conduct causing risk to the health and safety of another person.
In the Application against the Second Respondent as filed, the Worker claimed injury to both feet and psychological injury. These injuries were allegedly sustained on 26 November 2004, when his feet were run over by a forklift. The Worker claimed weekly compensation under sections 36, 38 and 40, particularised twice in the application for different periods. Firstly particularised for the period 3 July 2005 to date and continuing and in the “Schedule of Wages Claimed” at various rates for the period 5 December 2004 to date and continuing. The claim was however further limited at the hearing to a closed period claim from 3 July 2005 to 1 April 2007. The Worker also claimed $18,765.00 for medical expenses and lump sum compensation in respect of 4% whole person impairment in respect of injury to both feet. At the arbitration hearing the claim as against the Second Respondent was also amended with the Worker not pressing the psychological injury but pressing the claims for weekly compensation and medical expenses. The Arbitrator also noted that the parties agreed to refer the Worker to an Approved Medical Specialist for assessment of a WPI in respect of the injuries to the feet sustained on 26 November 2004.
The parties were unable to settle the claims and the matter proceeded to hearing before the Arbitrator on 18 December 2007. The one Counsel represented both Respondents and the Worker was also represented by Counsel. No oral evidence was taken, but the parties made oral submissions. The Arbitrator reserved and delivered his decision by way of a Certificate of Determination and Statement of Reasons (‘Reasons/Arbitrator’s Reasons’) on 21 January 2008. It is from this decision that the Worker now seeks leave to appeal.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 21 January 2008 records the Arbitrator’s orders as follows:
“The determination of the Commission in this matter is as follows:
1.There will be an award for the Respondent in respect of the Applicant’s claim for weekly compensation for the periods claimed, namely 6 August 2004 to 6 September 2004 and 3 July 2005 to 1 April 2007.
2.The Respondent to pay the Applicant’s reasonable and necessary expenses already incurred in respect of treatment for both the back and the left and right lower extremities pursuant to Section 60.
3.The Registrar is requested to refer the Applicant to an AMS for a determination of Whole Person Impairment attributable to the impairment of the Applicant’s left and right lower extremities arising out of the injury which occurred in the course of employment with the second named Respondent on 26 November 2004.
4.Respondent to pay the Applicant’s costs as agreed or assessed.”
The Arbitrator’s findings in relation to the psychological injury are recorded at paragraph [51] of his Reasons and are as follows:
“Turning to the Applicant’s claim for weekly compensation arising out of the psychological injury occasioned in the course of the employment with the first named Respondent, this of course would be dependent on liability attaching to the Respondent in the first instance. In addressing the question of the alleged psychological injury, I am satisfied that an injury did occur as diagnosed by the Psychologist, Mr Hudd, in his report of 12 April 2007, however, the question is whether or not the Respondent is entitled to rely upon the provisions of Section 11A in offsetting any liability attaching to that injury.”
ISSUES IN DISPUTE
The issues in dispute on the appeal are narrowly confined to the Arbitrator’s findings and orders in relation to the application of section 11A, his treatment of alleged hearsay evidence and the final orders in respect of section 60 treatment expenses. The decision and orders made in relation to the physical injuries, as claimed against both Respondents, are not challenged on appeal.
The Appellant’s grounds of appeal are:
“1. That the Arbitrator has fundamentally erred in his reasoning in interpreting s11A-reasonable behaviour by the respondent employer
2. That the Arbitrator has fundamentally erred in relying on hearsay evidence from the Respondent’s statements
3. That the Arbitrator has fundamentally erred in relying on unsigned statements by the Respondent
4. That the Arbitrator has not correctly dealt with the s60 expenses in his determination upon accepting that a psychological injury has occurred.”
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
The quantum in issue on the appeal is in excess of $5000.00 and is at least 20% of the amount awarded in the decision appealed against and therefore the thresholds in section 352(2)(a) and (b) are satisfied.
The appeal was filed on15 February 2008, within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
Leave to appeal is granted.
INCOMPLETE TRANSCRIPT
Whilst part of the arbitration hearing on 18 December 2007 was recorded and transcribed, due to a technical error the transcript of the proceedings was incomplete and the parties’ submissions were not recorded. As a consequence of the incomplete transcript of the arbitral proceedings, on 1 May 2008, I issued a Direction to the parties in the following form:
“Under a letter dated 21 February 2008, the Registrar provided the parties with a transcript from the arbitral proceeding conducted on 18 December 2007.
Due to a technical recording error the parties’ submissions at the arbitration hearing conducted on 18 December 2007 were not recorded, resulting in the transcript of proceedings being incomplete.
In the circumstances the following directions are made in this matter:
1.The Appellant, Mr Hartley is invited to file with the Commission, and serve on each other party, any further written submissions he considers necessary. Any submissions are to be filed and served on or before 15 May 2008.
2.The First Respondent, Dux Manufacturing Pty Ltd is invited to file with the Commission, and serve on each other party, any further written submissions it considers necessary. Any submissions are to be filed and served on or before 29 May 2008.
3.The Second Respondent, Unidex Consulting Pty Ltd is invited to file with the Commission, and serve on each other party, any further written submissions it considers necessary. Any submissions are to be filed and served on or before 29 May 2008.
4.Each party is to file a Certificate of Service on or before 30 May 2008.
5.Additional submissions should address:
(a)Whether the appeal can proceed in the absence of the transcript, and
(b)Any matter that was the subject of oral submissions to the Arbitrator not otherwise addressed by the Application for Leave to Appeal and Notice of Opposition.”
In response to the above Direction, all of the parties filed written submissions confirming that the appeal could proceed in the absence of a complete transcript of the arbitral proceedings.
The Respondents further submit at paragraph (a) (1) of their submissions dated 29 May 2008 that:
“the determination of the Arbitrator should be presumed to have been made on the basis of the submissions made by both parties. On this point it is noted that in his reasons the Arbitrator made reference to submissions by the parties”
There have been a number of cases where appeals have been brought in circumstances where for a variety of reasons there has been an incomplete recording of the proceedings from which the appeal is brought.
In Wyong Shire Council v Paterson [2004] NSWWCCPD 45 (‘Paterson’) Deputy President Fleming (as she then was) considered the absence of a transcript in the context of an appeal from the decision of an arbitrator in circumstances that are similar to the instant case. In that matter the oral evidence given by the worker at the arbitration could not be transcribed. The Deputy President relied on statements that had been filed by the worker. She noted at paragraph [16]:
“Taking into account the particular grounds of appeal, the Arbitrator’s written reasons and the documentary evidence that is before me I am satisfied that I can proceed to review the Arbitrator’s decision.”
An appeal to the Court of Appeal was unanimously dismissed with Giles JA holding at [44] that the absence of a transcript is not a passport to a fresh arbitration.
In Aluminium Louvres & Ceilings Pty Ltd v Xue Qin Zheng [2006] NSWCA 34 (‘Zheng’) there was no transcript or sound recording available of the evidence given before the Arbitrator. The Presidential member dealing with the appeal overcame the absence of the transcript by relying upon a summary of the relevant evidence from a solicitor for one of the parties. The Court of Appeal noted that the solicitor’s narration of the relevant facts was not disputed by the opposing party and in all the circumstances it was determined there was no error on the part of the Presidential member in proceeding to deal with the appeal relying, inter alia, on the solicitor’s narration of the relevant evidence.
In Zheng Bryson JA (with whom Handley JA and Bell J agreed) in dealing with the absence of transcript stated:
“This is a serious shortcoming, because it greatly impedes the right of appeal and the due exercise of powers of the Presidential member under s.352; and also impedes the conduct of a further appeal under s.353. According to circumstances, the absence of a sound recording could fairly readily lead a Presidential member to a decision to require a rehearing; although that result would not be automatic.”
In Ashley v Ashmore Constructions Pty Ltd [2006] NSWWCCPD 225 (‘Ashley’) the missing transcript concerned the evidence of the worker and a lay witness. Statements from both of the witnesses were attached to the Application to Resolve a Dispute. Acting Deputy President Candy drew the distinction between cases where portions of the evidence are not transcribed from those where the reasons for decision are not transcribed. He noted that the absence of a transcript is not necessarily fatal to the process of review. He noted the Arbitrator gave careful reasons in her determination of the matters in dispute. She had before her a statement of the worker taken several years before the hearing. The Acting Deputy President expressed doubt as to whether the evidence of the worker given during the arbitration hearing in March 2005, almost four years after the event in question, would have greatly assisted the Arbitrator in determining disputed matters of fact. He considered the statement of the worker some months after the event and the contemporaneous medical evidence to give a greater indication of where the truth lay. He held that the absence of the transcript did not prevent him from dealing with the matter on appeal and proceeded to determine it.
In Safi v Australian Concert & Entertainment Security [2007] NSWWCCPD 128 (‘Safi’) Deputy President Byron dealing with an absence of transcript formed the view that in the absence of the evidence upon which the Arbitrator’s decision was made he was unable to undertake a proper review in order to determine whether or not the Arbitrator had erred as alleged. He noted at [29]:
“The absence of a transcript can be a serious impediment to the process of ‘review’ that is required on appeal. In Fraternity Bowling & Recreation Club Ltd v Sartor [2004] NSWWCCPD 47 (‘Sartor’) not only was there no transcript of the oral evidence but there was no transcript of the Arbitrator’s ex tempore decision. The Arbitrator’s decision was revoked and the matter remitted to a new Arbitrator for re-hearing. The Commission noted at paragraph 15:
‘The absence of a transcript of the arbitration may be fatal to the conduct of a fair review on appeal where no written reasons have been provided. The task of the Presidential Member is to ‘review’ the Arbitrator’s decision, wherever it is possible to do so, either ‘on the papers’ or after an oral hearing. Where an Arbitrator has erred in making the decision, it may not be possible for a Presidential Member to proceed to substitute a new decision ... if the evidence on appeal is inadequate. This has frequently occurred because the evidence was not properly filed or given in accordance with the Rules or because it was not properly recorded in the arbitral proceedings. In these circumstances, to grant leave for fresh evidence to be given on appeal can lead to the review becoming a complete second hearing of the dispute ... this is not the intention of the statutory scheme. The particular circumstances of each case will influence the course of the review.’”
In the present matter none of the parties object to the matter proceeding in the absence of the complete transcript.
I have been substantially assisted by the comprehensive summary by the Arbitrator of the parties’ oral submissions at the arbitration (see Arbitrator’s Reasons at [29] to [47]).
I have also had regard to the agreement by the parties that the matter can proceed in the absence of the transcript of the oral submissions.
Taking all these factors into account, and consistent with the authorities I have referred to, I am satisfied that my conducting the appeal in the absence of part of the transcript will not involve any procedural unfairness to any of the parties.
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
FRESH EVIDENCE
None of the parties seek to rely on fresh evidence.
REVIEW
The nature of a review and the role and function of a Presidential member on appeal has been considered in many cases in the Commission. In The King Island Company Ltd v Deery [2005] NSWWCCPD 1 it was held at [19]:
“19. A Presidential Member on appeal has a specific and limited role in the review of a decision of an Arbitrator. The review is not a rehearing. The Presidential member is not dealing with the matter de novo and is not arriving at a fresh decision based on all of the evidence available at a later time (Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616). The powers of the Presidential Member to revoke the decision pursuant to section 352(7) of the 1998 Act and to substitute a new decision in its place, are exercisable only where it is demonstrated that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172). Alternatively, the Presidential Member may remit the matter back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions made.”
The nature of a review was considered by the Court of Appeal in Zheng where Bryson JA said at [38]:
“A review is a different process to an appeal and the matters which may be considered and the manner in which they may be considered are somewhat wider. See Boston Clothing Co Pty Ltd v Margaronis (1992) 27 NSWLR 580 at 584 (Kirby P). An attack, on review or otherwise, on an Arbitrator's discretionary decision in controlling procedure may be based on the test stated in House v. R (1936) 55 CLR 499 at 504 - 505; but that is not the only basis on which the Presidential member may act. The powers of a Presidential member on review are somewhat wider and extend to power to reopen consideration of a matter of which an Arbitrator has disposed; the manner in which the powers of the Presidential member are to be exercised is itself the subject of discretion of the Presidential member.”
This passage was recently quoted with approval by McColl JA in South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 at [134] (‘Edmonds’). To describe the relative weight and relevance of the expert evidence as “a discretionary decision which could only be disturbed on House v The King principles” was described by McColl JA as “an over-generalisation” (at [133]).
The nature of a review was further considered by the Court of Appeal in State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249 where Spigelman CJ said at [28] and [30]:
“28. The concept of a review on the merits is wider than the concept of an appeal in a judicial context. There is a well established line of authority on the use of the terminology of ‘review’ instead of ‘appeal’ with respect to the workers compensation system in this State which establishes the breadth of a review on the merits.
30. A Presidential member exercising a power to review a decision must decide whether the original decision is wrong or, as it is often put in the context of administrative appeals on merits, must decide what is the true and correct view. If s/he does so decide then s/he should substitute his or her own views, unless it is an appropriate case to remit. The power to remit is not constrained in the manner for which the Appellant contends.”
Before an Arbitrator’s decision will be revoked on review it must be demonstrated that it contains or has resulted from an error of fact, law or discretion. The error must be such that, but for it, a different decision should have been made (see Snow Confectionary Pty Ltd v Askin [2004] NSWWCCPD 56; Section 294 of the 1998 Act; YG & GG v Minister for Community Services [2002] NSWCA 247, and Absolon v NSW TAFE [1999] NSWCA 311).
I intend to apply the above principles in the matter before me.
ARBITRATOR’S DECISION
In respect of the claimed psychological injury and in particular his findings in relation to the Employer’s defence under section 11A, the subject of this appeal, the Arbitrator found that the Worker had suffered a psychological injury in the nature of an adjustment disorder with mixed anxiety and depressed mood, as diagnosed by Mr Hudd the Worker’s treating psychologist (see Arbitrator’s Reasons [51]). He also found that the Employer could rely on section 11A as a complete defence because the Employer’s actions in respect of the circumstances leading to the Worker’s cessation of employment (dismissal) were reasonable.
Given that the case appears to have been conducted on the basis that the Worker’s psychological injury resulted from those circumstances surrounding the cessation of his employment and given the Arbitrator’s finding that the Employer’s conduct in respect of those circumstances was reasonable, the Arbitrator found the Employer was entitled to rely on a defence under section 11A.
The Arbitrator noted that the Worker submitted in relation to the application of section 11A that:
a) the statement of Mr McIntyre was unsupported, whilst the report provided by Mr Hudd, psychologist was supported by general practitioner notes and certificates (see Arbitrator’s Reasons at [37]);
b) the Employer’s actions in dismissing the Worker were not reasonable because he had worked with the First Respondent for 11 years and there “was no evidence of the warnings for potential dismissal or complaint in the workplace over this period” (see Arbitrator’s Reasons at [38]), and
c) the statement of Mr Thomson was not in evidence and simply referred to in the statement of Mr McIntyre. The witness “stirred him up” and the employer should have provided counselling to the Worker “which would have obviated the onset of psychological injury” (see Arbitrator’s Reasons at [40]).
The Arbitrator recorded the Respondent’s submissions as follows:
a) the statement of Mr McIntyre was comprehensive in relation to the mode and manner of the investigation into the Worker’s behaviour and statements were taken (at [44], Arbitrator’s Reasons);
b) the termination of the Worker was reasonable and justified. The lack of supporting witness statements was not a basis for disbelieving what is asserted in the statements by Mr McIntyre (at [45], Arbitrator’s Reasons).
On the application of section 11A of the 1987 Act, the Arbitrator found at [52]-[54]:
“ 52 Having had the opportunity of perusing the detailed statement provided by Mr McIntrye, for the Respondent, and the Applicant’s own statements, it is abundantly clear on the Applicant’s own admission that there was an altercation which might have had more serious ramifications. I am satisfied that despite the Applicant’s longevity of employment with the Respondent and the fact that he was “stirred up” by a fellow employee that his behaviour and actions on the day in question were totally unacceptable.
53 I note that the Applicant would submit that the Respondent was heavily reliant upon the record produced by Mr McIntyre and that the statements contained therein were not verified by supporting statements, however, once the reply was filed, it was clearly open to the Applicant to file a further statement by way of Application to Admit Late Documents addressing any areas within the statement compiled by Mr McIntyre that were in dispute and, indeed, on the issue of credit it would have been possible for the Applicant to have requested at the telephone conference for summons to issue against any of the people alluded to within Mr McIntyre’s statement that might have helped the Applicant’s case. Neither course was actioned by the Applicant.
54 I am accordingly satisfied that the actions of the first named Respondent in terminating the Applicant as a consequence of the Applicant’s behaviour on 6 August 2004 were reasonable steps to have been taken and, accordingly, the Respondent is entitled to the defence proffered by Section 11A of the Act.”
SUBMISSIONS
Appellant’s Submissions
The Appellant submissions are extremely brief, are of limited assistance and add little to the grounds of appeal as outlined in [12] above. The submissions are that the Arbitrator erred:
1) at paragraph [52] of his Statement of Reasons (no further details or reasons substantiating the alleged error are articulated);
2) in his interpretation of section 11A, by relying on the unsigned statement of the Employer and its agent in accepting “poor behaviour by the applicant”;
3) at paragraph [51] in accepting he suffered a psychological injury but incorrectly interpreting the Employer’s action was reasonable, and
4) in failing to give reasons in relation to whether the medical expenses claimed in relation to the psychological injury were reasonable and necessary under section 60 of the 1987 Act.
In responding to the Direction dated 1 May 2008 referred to in paragraph [17] above, the Appellant undercover of a letter dated 15 May 2008 made “further written submissions in relation to the oral submissions to the Arbitrator” in relation to the grounds of appeal.
Unfortunately the Worker’s solicitor did not address his submissions to the two particular matters, the subject of my Direction, but essentially restated the grounds of appeal and submissions already made and contained in the original appeal application. For completeness however, the submissions lodged in response to the Direction are summarised as follows:
1) The Arbitrator erred by not taking into account that the Respondent did not contest the injury as claimed and the compensation claimed in the sum of $18,765.00.
2) There was no evidence to support the Arbitrator’s decision “that psychological counselling was [sic-not] necessary and reasonable in relation to the injury suffered by the Applicant”.
3) The Arbitrator erred in finding that as a consequence of the psychological injury the Worker was unlawfully [sic-lawfully] dismissed by the First Respondent. The Arbitrator’s role was to determine whether the Applicant satisfied the test for section 11A and he found “that injury did occur as claimed and section 11A is irrelevant to the contribution by the Applicant.”
4) The Arbitrator erred in law in relying on hearsay evidence and the uncorroborated statements submitted by the First Respondent in relation to a determination of liability under section 11A.
5) The Arbitrator failed to give adequate reasons in relation to the order for the payment of section 60 expenses.
6) The Arbitrator erred in law in not awarding the Worker weekly compensation benefits for partial incapacity for the period 3 July 2005 to 27 September 2007.
Respondents’ submissions
The Respondents’ submit that:
1) the Arbitrator correctly applied section 11A and provided reasons for his determination as follows:
a.the Employer’s actions were in relation to “dismissal” (section 11A), referred to by the Arbitrator at [54] of his Reasons as “termination”;
b.the psychological injury was found to have resulted from the Worker’s dismissal, and
c.the Employer’s actions in relation to the dismissal were found to be reasonable.
2) the First Respondent disputes the Appellant’s claim that it conceded injury in the form of psychological injury in the proceedings at first instance;
3) the Arbitrator did not err in relying on unsigned statements or hearsay evidence because:
a.prior to the arbitration hearing the Appellant was entitled to object to the evidence in the statements as referred to by the Arbitrator at paragraph [53] of his Reasons;
b.the Appellant did not file further evidence or call any other witnesses. His objection to the Respondent’s evidence at the arbitration hearing was prejudicial;
c.the Arbitrator has a discretion to accept unsigned statements as evidence and the Arbitrator addressed the Appellant’s submissions at paragraph [39] and [40] of his Reasons;
d.the Arbitrator relied on the Worker’s own statement in making his finding that the actions of the Employer in relation to the Worker’s dismissal from employment were reasonable;
e.Rule 15.2 of the Workers Compensation Commission Rules 2006 (‘the Rules’) provide the principles guiding the probity of evidence and the Arbitrator considered the statements in accordance with the Rules, and
f.the decisions in South Western Area Health Service v Edmonds [2007] NSWCA 16 and Symbion Health Limited v Franks and Linfox Australia Pty Limited [2007] NSWWCCPD 93 provided guidance where unsigned statements are accepted as evidence.
4) The Arbitrator did not err in his determination in relation to section 60 expenses for psychological injury, and his award in relation to section 60 was appropriate, given that he had found that the First Respondent had no liability for the psychological injury by reason of section 11A.
In response to the Direction dated 1 May 2008, the Respondent filed submissions on 29 May 2008. In addition to submitting that the appeal could proceed in the absence of a complete transcript, the Respondent submitted that:
1) The Appellant’s submissions do not address the Direction and do not relate to the matters that were the subject of oral submissions before the Arbitrator;
2) The Appellant’s submissions should have been made in the Application for Leave to Appeal, because they relate to the grounds of appeal and not to the subject of oral submissions before the Arbitrator, and
3) The submissions are out of time and should be disregarded in the determination of the appeal.
DISCUSSION AND FINDINGS
I am sympathetic to the Respondents’ submissions referred to above, that the Worker’s submissions in response to the Direction relate to the grounds of appeal and not to the oral submissions before the Arbitrator and as such are out of time and should be disregarded. However, having reviewed all of the submissions made by the parties, including the submissions in response to the Direction, I have concluded that as those further submissions relate to the issues on appeal, they are essentially a restatement of the Appellant’s grounds of appeal and submissions already made and therefore they progress the matter no further. I am therefore not satisfied that they cause any prejudice to the Respondents but am equally satisfied that they fail to provide any additional assistance to the Appellant.
The evidence the subject of complaint in this appeal is not in fact a “statement” by Mr McIntyre in the conventional form. The Employer’s Reply includes a memorandum dated 6 August 2004 on the letterhead of the First Respondent from David McIntyre, the Operations Manager, to “Paul Hartley’s personnel file”. The memorandum records a series of events that were alleged to have occurred on 3 and 4 August 2004. They record certain conduct and statements allegedly attributable to the Worker, Mr Hartley and a co-worker Mr Jeff Thompson. The memorandum then records the process of investigation that followed, including, interviewing a number of fellow employees. The memorandum records the content of a meeting on August 6 2004 between the Worker, Troy Thuroczy, Eddie Pawsey, David McIntyre and Terry Meehan. Mr Thuroczy was present at the meeting as an employee representative, Mr Meehan is the Finishing Manager. I have been unable to ascertain from the evidence the role Mr Pawsey took in the meeting. I shall refer to this evidence to “the McIntyre evidence”.
At the meeting on 6 August 2004, Mr Hartley was informed that due to the serious nature of his misconduct and the real potential for serious injury, his employment would be terminated immediately. He was given the opportunity to resign his employment immediately, which he did. The memorandum records a series of reasons given to Mr Hartley for his dismissal:
· The Employer had an obligation to provide a safe working environment for all staff.
· The incident on 4 August 2004 posed a serious risk to fellow workers.
· By the Worker’s own admission, his conduct was dangerous.
· A full investigation of the incident had been conducted. Many witnesses’ statements had been recorded including consultation with the Union delegates.
· The events of the day were recorded and reported accurately and collaborated by multiple witnesses.
Attached to Mr McIntyre’s memorandum are the following documents:
1) Notes of an interview with the Worker, concerning an allegation that he (Mr Hartley) had thrown a can of spray paint at a fellow employee.
2) Notes of an interview with Jeff Thompson concerning the incident on 4 August 2004.
3) Notes of a further interview between the Worker and management (with a worker representative present).
4) The transcript of an interview with Nicole Farrell, Process Worker Small Electric Line, conducted by David McIntyre and Terry Meehan.
5) The transcript of a record of interview between Darren James, Process Worker Square Gas Line Welding, David McIntyre and Terry Meehan.
6) The transcript of a record of interview between Geoff Peters, Process Worker Large Electric Line, David McIntyre and Terry Meehan.
7) The transcript of a record of interview between Linda Walker, Process Worker Large Electric Line, David McIntyre and Terry Meehan.
8) The transcript of a record of interview between Keith Gardner, Leading Hand Large Electric Line, David McIntyre and Terry Meehan.
9) The transcript of a record of interview between Phil McLaren, Process Worker Large Electric Line, David McIntyre and Terry Meehan.
10) The transcript of an interview with Terry Meehan by David McIntyre.
11) The transcript of a further interview between Linda Walker, Process Worker Large Electric Line, David McIntyre and Terry Meehan.
12) The transcript of a further interview between Keith Gardner, Leading Hand Large Electric Line, David McIntyre and Terry Meehan.
13) The transcript of an interview between Jeff Thompson, Process Worker Large Electric Line, David McIntyre and Terry Meehan.
14) Notes of the meeting between Paul Hartley, Troy Thuroczy, Eddie Pawsey, David McIntyre and Terry Meehan referred to previously.
Rule 14.2 of the Rules requires a party proposing to rely on the oral evidence of witness to lodge and serve a written statement “…signed by the witness…”. The Rules are silent on the requirement of a statement of evidence to be signed by a witness where no oral evidence is sought to be given. There is nothing in the Arbitrator’s decision or in the transcripts that were available to me to suggest that there was ever any attempt to call either Mr McIntyre or any of the witnesses interviewed by him to give oral evidence. Thus the requirements of Rule 14.2 have not been breached by the First Respondent.
Rule 10.3 of the Rules requires a party to the proceedings to lodge with an Application or Reply “all information and documents on which the party proposes to rely and that are in the possession or control of the party”. There is no specific requirement in Rule 10 requiring the Respondent to provide signed statements.
Section 354 of the 1988 Act is in the following terms:
“354 Procedure before Commission
(1) Proceedings in any matter before the Commission are to be conducted with as little formality and technicality as the proper consideration of the matter permits.
(2) The Commission is not bound by the rules of evidence but may inform itself on any matter in such manner as the Commission thinks appropriate and as the proper consideration of the matter before the Commission permits.
(3) The Commission is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.
(4) Proceedings need not be conducted by formal hearing and may be conducted by way of a conference between the parties, including a conference at which the parties (or some of them) participate by telephone, closed-circuit television or other means.
(5) Subject to any general directions of the President, the Commission may hold a conference with all relevant parties in attendance and with relevant experts in attendance, or a separate conference in private with any of them.(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.
….”
Rule 15 of the Rules gives guidance as to the principles of procedure to be followed and it is in these terms:
“15.2 Principles of procedure
When informing itself on any matter, the Commission is to bear in mind the following principles:
(a) evidence should be logical and probative,
(b) evidence should be relevant to the facts in issue and the issues in dispute,(c) evidence based on speculation or unsubstantiated assumptions is unacceptable,
(d) unqualified opinions are unacceptable.”
Thus there is nothing in the 1987 Act or the 1998 Act (“the Workers Compensation Acts”), or the Rules to specifically require a document in the form presented by “the McIntyre evidence” to be signed, as a prerequisite to admissibility. That of course is not the end of the matter in terms of admissibility, and should not be regarded by practitioners as a green light to depart from the Commissions practice of requiring documents to be signed or adopted by a witness before being admitted in evidence.
The principles to be followed concerning the admissibility of evidence in the Commission was recently considered by the Court of Appeal in Southwestern Area Health Service v Edmonds [2007] NSWCA 16 (“Edmonds”) where McColl JA said:
“127. While the Commission may inform itself on any matter in such manner as it thinks appropriate and as the proper consideration of the matter before it permits (s 354(2)), r 70 of the Workers Compensation Commission Rules 2003 provides that when informing itself on any matter, the Commission is to bear in mind the principles that evidence should be logical and probative, should be relevant to the fact in issue and the issues in dispute, that evidence “based on speculation or unsubstantiated assumption is unacceptable” and that “unqualified opinions are unacceptable”.
128. Rule 70 broadly reflects fundamental principles of the common law concerning admissibility of evidence. Indeed, in Aluminium Louvres & Ceilings Pty Ltd v Zheng [2004] NSWWCCPD 26 (at [24]) Deputy President Fleming said:‘Where the rules of evidence do not apply, the conduct of proceedings will be a matter to be determined according to principles of fairness, taking into account the nature of the proceedings, the legislative requirements and the demands of the instant case. The Commission may have regard to evidence that would not be admissible in a court in accordance with the rules of evidence. Fairness must guide the weight to be given to this evidence.’
129. Where the rules of evidence do not apply, in order to find error of law based on absence of evidence there must be an absence of material, whether strictly admissible according to the rules of evidence or not: Smith & Anor v Collings Homes Pty Ltd & Anor [2004] NSWCA 75 at [32] per Mason P (Handley JA and Campbell J agreeing).”
Adopting the principles referred to above, and the legislative provisions and the Commission’s rules concerning the admission of evidence, the Arbitrator’s admission of “the Mr McIntyre evidence” does not disclose any error. In my view the memorandum and attached records of interview prepared by Mr McIntyre were admissible before the Arbitrator. The weight to be attached to them is, however, a different matter.
In the instant case, the alleged misconduct of the Worker prompted a comprehensive investigation to be undertaken by the Employer. Appropriately, the Worker was informed of the allegations against him and was given an opportunity to respond. In like fashion, his co-worker, Mr Thompson was also interviewed and was given an opportunity to present his version of the facts. Thereafter Mr McIntyre set about not only interviewing but carefully recording and transcribing the records of interview with all relevant witnesses to the events. Mr McIntyre identified six particular actions by the Worker culminating in the finding of misconduct and recommendation for termination. He then separately identified those of relevant witnesses who independently verified each of the allegations. The conclusions reached by Mr McIntyre are in these terms:
“Conclusions:
The following persons witnessed Paul verbally abusing Jeff:
Linda Walker, Nicole Farrell, Geoff Peters, Phil McLarenThe following persons witnessed Paul throw a jacket at Jeff:
Linda WalkerThe following persons witness[ed] Paul throw can of spray paint into Jeff’s back:
Linda Walker, Mia Ha Law, Geoff PetersThe Following persons witness[ed] Paul ‘push, shove, slam, throw’ chair into Jeff’s chair while he was seated in it: Nicole Farrell, Mia Ha Law, and Geoff Peters
The Following persons witnessed Paul punching boxes:
Keith Gardener, Jeff Thompson. Geoff Peters, Linda Walker.Although, the investigation did attempt to identify if Jeff Thompson had provoked Paul Hartley no substantiated evidence was found. Although Jeff Thompson used strong language towards Paul Hartley it was in response to Paul’s aggression and language. This was collaborated by witness statements” (pages 2 and 3 of the McIntyre memorandum dated 6 August 2008).
The memorandum from Mr McIntyre and the attached records of interview provide evidence not only of the facts in issue but of the comprehensive process of investigation undertaken by the Employer following the allegation of serious misconduct by a Worker. In my view, the evidence was both logical and probative of the facts in issue, particularly as numerous witnesses independently verified a number of allegations concerning Mr Hartley’s conduct.
Although it does not support their argument, the Employer has drawn my attention to the decision of Acting Deputy President Moore in Symbion Health Limited (formally Mayne Group Limited) v Jimmy Franks and Linfox Australia Pty Ltd [2007] NSWWCCPD 93 (11 April 2007). The employer argues that the decision gives guidance to the circumstances where unsigned statements are accepted in proceeding in the Commission. Acting Deputy President Moore in that case found that an unsigned and an unadopted statement by an Applicant worker was “not a proper statement, is unsubstantiated, and is not in effect evidence at all”. She went on to say:
“I am not persuaded that the exercise of my discretion permits me to adopt material that is not strictly admissible according to the rules of evidence where that material fails to conform to rule 70 of the Workers Compensation Rules 2003 (Rule 15.5 of the Rules), notwithstanding the broad powers of the Commission in the conduct of proceeding as set out section 354 of the 1998 Act.” (emphasis added)
Whilst I agree that extreme caution must be applied in the exercise of discretion to admit material that is not strictly admissible according to the rules of evidence, I am satisfied that in the instant case the admission of the McIntyre evidence discloses no error by the Arbitrator. The approach adopted by Mr McIntyre in his investigation of the alleged acts of misconduct, was in my view, both logical and probative. As the rules of natural justice would dictate, the allegations concerning the worker, Mr Hartley, were first put to him for his comments. The other main protagonist in the alleged events, Mr Thompson, was then interviewed and a record made of this version of events. The Employer then set about methodically interviewing all relevant eyewitnesses. The witnesses were seen independently of each other. Where their consent was obtained, a recording was made of the interview and a transcript of same was prepared. For those who did not consent to their interviews being recorded careful file notes were made of their observations. Having completed the factual investigation, a final interview was held with the Worker, which culminated in his resignation, rather than being summarily dismissed. Notwithstanding the memo being unsigned and unadopted its content was logical, probative and highly relevant to the facts in issue.
Notwithstanding the prejudice to the Worker, for the reasons I have indicated, I believe that the probative value of the admission of the memorandum and its attachments outweigh any prejudice to the Worker. I am reinforced in that view by the Employer’s submission concerning the Worker’s failure, prior to the arbitration, to raise objection to the evidence contained in the memorandum as referred to in paragraph [53] of the Arbitrator’s reasons. No attempt was made by the Worker or his legal representatives to seek to file any further evidence to rebut Mr McIntyre’s evidence, nor was there any attempt made to summon any of the parties who participated in the investigation, to give evidence.
Section 11A - Reasonable Action taken by Employer
The Worker argues that the Arbitrator erred in the interpretation of section 11A in finding that the conduct of the Employer was reasonable in the circumstances.
The test as to reasonable action was recently considered by Deputy President Byron in Smyth v Charles Sturt University [2007] NSWWCCPD184 (23 August 2007).
“46. The onus of proof in terms of “reasonable action” and other matters under section 11A of the 1987 Act falls upon the Employer (see Department of Education & Training v Jeffrey Sinclair [2004] NSWWCCPD 90, per President Justice Sheahan at [23]).
47. The question as to whether an employer’s actions are reasonable under the section is one of fact involving an objective test: it is not a matter of law (Commissioner of Police v Minahan [2003] NSWCA 239 (‘Minahan’). In Director General, Department of Education and Training v Pembroke [2006] NSWWCCPD 182, Acting Deputy President Handley said at [26]:‘In determining whether the conduct was reasonable, all relevant factors must be taken into consideration including the rights of both employee and the employer (Aristocrat Technologies Australia Pty Ltd v Rashov [2005] NSWWCCPD 66 [‘Raskov’], at paragraph 82). If the employer can establish that its conduct was reasonable, then the employee cannot recover compensation.’
48. Whether the Employer’s actions were reasonable or not, depends upon the intrinsic reasonableness of its actions, taking into account relevant matters pertaining to the employee and known to the employer (Minahan); see also Abdul-Rahman v Allied Pickfords Pty Ltd [2005] NSWWCCPD 107; Pirie v Franklins Limited (2001) 22 NSWCCR 346 (‘Pirie’)). The test of reasonableness of the relevant conduct is objective. “Whether the action is reasonable should be attended in all the circumstances by a question of fairness.” (Minahan). The term “reasonable action” therefore, should be given a broad construction (Dunn v Firth [2003] NSWCA 280).
49. Consideration should be given to the circumstances surrounding the “action”, to the extent that what occurred before and after the “action” may be taken as a guide to its reasonableness or otherwise, but is not necessarily determinative of it (Buxton v Bi-Lo Pty Ltd [1998] NSWCC 13; (1998) 16 NSWCCR 234 at 249; Melder v Ausbowl Pty Ltd (1997) 15 NSWCCR 454, at 458, and Pirie)…”
It is not for the Commission to consider on appeal whether the actions taken by the Employer might have taken a different course or included other options. In this case it might be argued that the Employer should have been on notice that the Worker had a propensity to be easily offended or upset and to react inappropriately. It could be argued that the Employer should have taken other preventative measures to obviate a circumstance where the Worker became so agitated that he engaged in verbal and physical abuse. That, however, is not a question on appeal. The question is whether the action taken by the Employer was “reasonable action” taking into consideration all relevant factors.
In this case, the Employer having undertaken a thorough investigation was satisfied, in my view, on reasonable grounds, that the Worker was abusive, had thrown a jacket at another worker, had thrown a can of spray paint at the same worker, and had thrown a pneumatic drill at the co-worker’s head. As pointed out by the Employer, the Worker’s conduct had the potential for serious injury, and was inconsistent with the employer’s statutory obligation to provide a safe working environment for all staff.
In my view the Arbitrator was entitled to attach considerable weight to “the McIntyre evidence” by reason of the significant number of independent witnesses who largely corroborated the evidence of serious misconduct by the Worker. The Arbitrator was entitled to weigh “the McIntyre evidence” against the Worker’s own statements which I note are also unsigned, in which he admits, inter alia, throwing a can of spray paint and an airgun. Although not the subject of a specific finding by the Arbitrator, I find the Worker’s explanation:
“Then I threw a small can of spray paint down on the little table beside where I was working it might of fell off and hit him on the back….
I was in a sitting position when I threw the air gun, which is on an air hose, in a downward motion, which went over the small table between us & landed on the ground near his feet”,
to be particularly unconvincing weighed against the evidence on these allegations by the independent witnesses.
The arbitrator made a series of factual findings (see [52] and [54] of the Arbitrator’s Reasons) that were consistent with the employer’s investigation findings. He was mindful of Mr Hartley’s longevity of employment and the absence of any prior warnings, and he clearly weighed these as a factor in his determination (see paragraphs [38] and [52] of the Arbitrator’s Reasons) that the actions of the Employer were reasonable in the circumstances.
In my view, the Arbitrator did not fall into error in assessing the Employer’s conduct as reasonable within the meaning of section 11A of the 1987 Act, thus enlivening for the Employer, a complete defence to the Worker’s claim for compensation as a result of psychological injury. Accordingly, this ground of appeal fails.
Section 60 Expenses
The Employer alleges that the Arbitrator has not correctly dealt with the section 60 expenses in his determination, after finding that a psychological injury had occurred. I note that at [55] of his Reasons, the Arbitrator found the following:
“Turning to the Applicant’s claim for Section 60 expenses arising out of injuries occasioned in the course of employment with the first named Respondent, I make a general order in terms of Section 60 so far as the injury to the back is concerned, however, there will be an award for the Respondent in respect of any accounts incurred as a consequence of any alleged psychological injury.”
In my opinion the Arbitrator has made it clear that the award in favour of the Applicant is only for the reasonable and necessary expenses incurred for both the back and leg injuries are payable under section 60. Having regard to his findings under section 11A the Employer is not liable for expenses incurred in the treatment of any alleged psychological injury.
Given the Arbitrator’s finding that the First Respondent is entitled to rely on the defence under section 11A, the Worker has no entitlement to compensation in respect of the psychological injury.
DECISION
The Arbitrator’s decision dated 21 January 2008 is confirmed.
COSTS
No order is made as to the costs of this Appeal.
His Hon. Judge Greg Keating
President
30 May 2008
I MELANIE CURTIN, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF HIS HONOUR JUDGE GREG KEATING, PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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