Hkeik v Keyton Management Services Pty Ltd ATF LLRL Management
[2025] NSWPIC 166
•7 April 2025
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Hkeik v Keyton Management Services Pty Ltd ATF LLRL Management [2025] NSWPIC 166 |
| APPLICANT: | Therese Hkeik |
| RESPONDENT: | Keyton Management Services Pty Ltd ATF LLRL Management |
| MEMBER: | Mitchell Strachan |
| DATE OF DECISION: | 7 April 2025 |
CATCHWORDS: | WORKERS COMPENSATION - Workers Compensation Act 1987; section 11A(1); whether action with respect to dismissal was whole or predominate cause; whether action with respect to dismissal reasonable; Held – dismissal not whole or predominate cause; action with respect to dismissal not reasonable; award for the applicant; referral to Medical Assessor to assess permanent impairment. |
| DETERMINATIONS MADE: | The Commission determines: 1. Application to Lodge Additional Documents filed by the applicant dated 17 February 2025 and further Application to Lodge Additional Documents filed by the applicant containing record of Assure Psychology dated 28 April 2023 are introduced into the proceedings. 2. The applicant sustained a psychological injury in the course of her employment with the respondent on 11 May 2023. 3. The applicant’s pre-injury average weekly earnings are $3,426.24 per week. 4. Action taken by the respondent with respect to the dismissal of the applicant was not the whole or predominate cause of the applicant’s psychological injury. 5. Action taken by the respondent with respect to the dismissal of the applicant was not reasonable. 6. The respondent’s defence under s 11A(1) of the Workers Compensation Act 1987 is not made out. 7. The claim for permanent impairment compensation is remitted to the President for referral to a Medical Assessor for determination of the permanent impairment arising from the following: Date of injury: 11 May 2023. 8. The documents to be referred to the Medical Assessor to assist with their assessment are to include the following: (a) this Certificate of Determination; (b) Application to Resolve a Dispute and attachments; (c) Reply and attachments; (d) Application to Lodge Additional Documents filed by the applicant dated (e) further Application to Lodge Additional Documents referred to in order 1 above. 9. The claim for weekly benefits and medical expenses is adjourned for further preliminary conference to a date after the issuing of the Medical Assessment Certificate. A brief statement is attached setting out the Commission’s reasons for the determination. |
STATEMENT OF REASONS
BACKGROUND
The applicant commenced employment with the respondent on 23 November 2022 as a Senior Design Manager.
The applicant alleges that during the period she was employed by the respondent, she was treated in a manner which she characterised as “ongoing bullying and harassment, differential treatment and lack of support” resulting in a psychological injury.
Her employment was terminated, prior to the expiry of her probationary period on
19 May 2023.The respondent does not dispute that the applicant sustained a psychological injury in the course of her employment with the respondent but asserts that no compensation is payable with respect to the injury as it was wholly or predominately caused by reasonable action taken or proposed to be taken by the respondent with respect to dismissal.
ISSUES FOR DETERMINATION
During conciliation and confirmed at the commencement of the arbitration hearing the respondent conceded that it accepted the applicant sustained a psychological injury in the course of her employment with the respondent however maintained a defence pursuant to s 11A of the Workers Compensation Act 1987 (the 1987 Act).
The parties also reached agreement with respect to the applicant’s pre-injury average weekly earnings at $3,426.24.
The parties sought, and I considered it appropriate, that the balance of the claim for weekly compensation and medical expenses be determined following resolution of the respondent’s s 11A defence and if that was not made out, referral to a Medical Assessor to assess the applicant’s whole person impairment to avoid nonconformity between any determination of the Personal Injury Commission (Commission) and the Medical Assessment Certificate issued by the Medical Assessor. This is consistent with the approach supported by Deputy President Roche in Jaffarie v Quality Castings Pty Ltd.[1]
[1] [2014] NSWWCCPD 79 at [264]-[269].
During submissions, the respondent abandoned its defence under s 11A(1) of the 1987 Act with respect to performance appraisal.
The parties agree that the following issue remains in dispute for determination:
(a) whether the respondent’s defence pursuant to s 11A of the 1987 Act with respect to dismissal is made out.
PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION
The matter was listed for conciliation conference and arbitration hearing before me by audio-video conference on 17 March 2025. Mr McEnaney of counsel appeared for the applicant instructed by Ms Basal of Law Partners. The applicant was in attendance supported by her sister and son. Mr Gaitanis of counsel appeared for the respondent instructed by
Mr Richards of SMK Lawyers. Ms Jenkins of QBE and Mr Perin of the respondent employer were also in attendance.I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.
EVIDENCE
Documentary evidence
During the course of the conciliation, the parties raised that a further record of Assure Psychology from 28 April 2023 had been made available to the parties but was not before the Commission. The record was provided to me and I made a direction that the applicant file a copy with an Application to Lodge Additional Documents with the registry immediately following the arbitration hearing. That document, together with the Application to Lodge Additional Documents filed by the applicant dated 17 February 2025 were introduced into the proceedings.
As such, the following documents were in evidence before the Commission and considered in making this determination:
(a) Application to Resolve a Dispute and attached documents;
(b) Reply and attachments;
(c) Application to Lodge Additional Documents filed by the applicant dated
17 February 2025, and(d) record of Assure Psychology from 28 April 2023 (filled on 21 March 2023).
Oral evidence
There was no application to adduce oral evidence or cross examine any witnesses.
FINDINGS AND REASONS
For the reasons that follow, the respondent’s defence pursuant to s 11A of the 1987 Act with respect to dismissal is not made out.
Section 11A generally
Section 11A(1) 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.”
The respondent carries on onus of establishing that the defence under s 11A is made out.[2]
[2] Pirie v Franklins Ltd [2001] NSWCC 167; (2001) 22 NSWCCR 346 (Pirie); and Department of Education and Training v Sinclair [2005] NSWCA 465; (2005) 4 DDCR 206 (Sinclair).
The respondent submits that the applicant’s psychological injury was wholly or predominantly cause by reasonable action taken by the respondent with respect to dismissal such that compensation is not payable.
The applicant submits that the applicant’s injury results from bullying and harassment by her manager and pre-dated action taken by the respondent with respect to the dismissal of the applicant such that dismissal cannot be the whole or predominate cause.
Further, the applicant submits in any event the action of the respondent with respect to dismissal was not reasonable.
It is convenient to deal with each issue separately, however the respondent must establish that the action taken with respect to the dismissal or proposed dismissal was the whole or predominate cause and that its actions with respect to the dismissal or proposed dismissal were reasonable.
Was the applicant’s psychological injury wholly or predominately caused by reasonable action taken or proposed to be taken by the respondent with respect to dismissal
“Wholly or predominantly caused” has been held to mean “mainly or principally caused” however they are separate and distinct concepts.[3]
[3] Smith v Roads and Traffic Authority of NSW [2008] NSWWCCPD 130.
The applicant has provided three statements which are before the Commission dated
20 May 2023, 11 September 2024 and 13 November 2024 in which she describes interactions between herself and Ms Elhaj as “bullying and harassment”. Whether or not the interactions between the applicant and Ms Elhaj amount to bullying and harassment is irrelevant for the purposes of the current proceedings, and it is largely unhelpful to characterise interactions and interpersonal conflict between an employee and their manager in such a way.What is important, in the present case, is firstly whether the interactions occurred (that is, were they real events?), secondly the applicant’s perception of those interactions and thirdly whether those work related interactions, as is the applicant’s case, gave rise to a psychological injury within the meaning of s 4 and 9A of the 1987 Act.
The respondent submitted that the applicant and the respondent were at cross purposes. What Ms Elhaj saw as attempting to assess the applicant’s suitability for the role and ensuring she was getting things right during the probation period, the applicant perceived was as micromanagement, a lack of flexibility which was not commensurate with her expectations of the responsibilities and preventing her from doing what she saw as her role as a senior designer.
I raised with counsel for the applicant during submissions the relevance of this where it was the applicant’s perception of these events which was relevant. The respondent submitted that these were not real events but rather the applicant tailoring her evidence after the event to say she had a problem with Ms Elhaj.
The respondent referred to allegations summarised in the investigation report of AB Investigations dated 5 June 2023 and asserted that these were not made out. I do not accept this submission.
As the respondent has referred to the allegations as summarised in the investigation report, it is convenient to deal with them in the order they appear.
Firstly, the allegation the applicant received a lack of support; no on the job training and
Ms Elhaj prevented the claimant attending an induction. It was Ms Elhaj’s position that she was provided with a staggered induction learning the respondent’s design standard through online modules. Ms Elhaj explains the reason why the training was not “on the job” but rather theoretical. Whether this was appropriate is not important. Ms Elhaj’s evidence does not refute the applicant’s evidence that she was not provided with on the job training. Again,
Ms Elhaj provides reasons to explain why the applicant could not attend the induction on
9 May but does not refute that that was her decision.Secondly, the allegation Ms Elhaj denied the applicant from displaying her full potential. It is Ms Elhaj’s evidence that she did tell the applicant to keep an email to Mr Fitzgerald short and that the applicant’s communication was often long and elaborate. She did tell the applicant not to attend a site visit as it was unnecessary. She attended a meeting set up by the applicant and did not invite the applicant as the work was outside of her role. The evidence of Ms Elhaj explains the context of the interactions but that does not mean they did not occur.
Thirdly, the allegation Ms Elhaj did not provide immediate assistance with processing an expense claim. Ms Elhaj confirms she had asked the claimant to wait until the following Friday so they could complete it together. Again, while there is a reason for the response, it does not mean the interaction did not occur.
Fourthly, the allegation that Ms Elhaj limited the applicant’s flexibility and told her what she can and cannot do as a senior design manager including prioritising work. Ms Elhaj confirms the applicant did not demonstrate a strong ability to prioritise tasks and it was part of the role of the supervisor to monitor work and change priorities in line with business needs. Ms Elhaj confirms she asked the applicant to change work if it did not meet expectations. Again,
Ms Elhaj has explained these interactions but the interactions still took place.Fifthly, the allegation at Ms Elhaj left the applicant waiting outside her home until 8.30am when she had arrived earlier. Ms Elhaj states she was likely in the shower and did not hear her phone or front door. She denies the content of the conversation and that once they had said hello the day continued as normal. Again, the context of the interaction is different but the fact that Ms Elhaj did not answer the door until 8.30am is not disputed.
Sixthly, Ms Elhaj completely denies the allegation that she told the applicant not to speak about her deceased son and not to join a diversity group. Given the number of real events set out above confirmed to have occurred by Ms Elhaj (even if the context is different) I do not need to make a finding with respect to whether this particular event occurred and do not do so.
Seventhly, the allegation with respect to issues claiming sick leave rather than taking leave without pay following eye surgery. Ms Elhaj confirms that she believed it may have needed to be annual leave as it was elective surgery but that HR ultimately confirmed it was sick leave. Again, the interaction took place.
Eighthly and finally, the allegation that on 21 April 2023 Ms Elhaj discussed with the applicant extending her probation period but did not disclose confirmation of this until 8 May 2023. Again, the fact that Ms Elhaj first approached the applicant with respect to her probation on 21 April 2023 and then did not confirm whether it was to be extended until 8 May 2023 is not in dispute. Again, it is a real interaction that took place.
Having considered the above interactions between the applicant and Ms Elhaj I am satisfied that, with the exception of the sixth allegation, they are real interactions that took place in the workplace over a period of time. The applicant has perceived these interactions in the context of a deteriorating relationship with Ms Elhaj who prior to the applicant commencing employment, was a friend of the applicant’s outside of work. It may be that many if not all of the interactions were appropriate interactions between a manager and an employee, particularly a new employee under the direction of the manager. The appropriateness of the interactions however is irrelevant.
The applicant referred in submissions to the decision of President Phillips in Van Vliet v Landscape Enterprises Pty Ltd[4] and the original decision of Member Sweeney below. In that matter, the Member rejected the evidence of the applicant where the applicant’s evidence was contradicted by four other witnesses on a number of relevant issues. This is different to the current circumstances where Ms Elhaj accepts the interactions occurred but either disputes the context or provides an explanation for her actions. The explanations for the interactions may have been relevant if it was the respondent’s defence that the interactions were examples of discipline for the purpose of a s 11A(1) defence on that basis but that was not the defence advanced by the applicant before me.
[4] [2022] NSWPICPD 49.
It becomes a question as to whether the applicant’s perception of those real interactions caused the applicant’s psychological injury.
The applicant initially sought assistance through an Employee Assistance Program provided by Assure on 28 April 2023. The clinician, Ms Schiavoni recorded that the applicant was stressed at work due to incivility and a range of covert tactics by her manager who was previously her friend and the applicant was seeking support to understand her managers behaviour and how to work with her manager and navigate the situation.
This consultation occurred after Ms Elhaj had discussed extending the applicant’s probation period but before any discussion with respect to dismissal occurred, although I accept that, as a matter of common sense, the applicant would have held concerns about her ongoing employment at that time. It would be illogical that an employer would take steps to extend a probation period if they were otherwise satisfied with an employee’s performance and this must have been known to the applicant.
However, it is clear that this was not the applicant’s principal concern when she spoke with Ms Schiavoni on 28 April 2023 and it was the relationship between Ms Elhaj and herself and the steps she could take to navigate this that was the central theme of the session.
The applicant spoke with Ms Schiavoni again on 11 May 2023 and it is recorded that she was distressed and stressed and that the situation had escalated with the manager making comments around her future at the company. They spoke again on 12 May 2023 where the applicant described having a “full breakdown” and she had been unable to sleep and was deeply affected by her manager’s behaviour. The applicant continued to speak with
Ms Schiavoni until 23 June 2023.The applicant’s general practitioner, Dr Bonovas, provided a report dated 30 June 2024. The doctor noted that the applicant attended on 11 May 2023 and provided a history that she had been working for the respondent for the last six months and had been under a lot of stress at work as result of being mistreated by her direct manager and that she felt bullied. She felt that this was affecting her probation as her manager is the person making the decision on whether she would be made permanent or not. The doctor provided a diagnosis of adjustment disorder and that the causative stressor was the workplace and her direct manger.
The applicant’s treating psychologist, Susan Stern, provided a report dated 7 June 2023 to the respondent’s insurer. She confirmed a diagnosis of adjustment disorder with anxiety and depression. She considered that the applicant’s problems occurred before the “ultimate cessation of her probation period” and noted the applicant “stated that there was confusion as on the 8th she was told she was going to be let go, yet was then given a large project of work to do”. This was stressful for the applicant who also described a history of bullying and harassment.
Ms Susan Stern provided a further report dated 28 December 2024. Ms Stern confirmed her diagnosis of adjustment disorder which she related to toxic bullying and harassment in the context of the applicant’s employment with the respondent.
The applicant relies on the qualified opinion of Dr Chow, consultant psychiatrist, dated
15 January 2024 who recorded a history the applicant worked for a friend who was the national design manager and overtime was bullied and maltreated by her manager and as the behaviours escalated she felt further targeted and eventually could not cope and went of work. Dr Chow provided the opinion that if the validity of the applicant’s complaints are accepted, then the predominate cause of her psychiatric injuries are the reported bullying and harassment. Dr Chow maintained this position in a supplementary report dated
25 November 2024.
The respondent relies on a qualified opinion of Dr Nagesh, consultant psychiatrist, dated
2 August 2023. Dr Nagesh also accepts the applicant is suffering from an adjustment disorder with depressed and anxious mood. With respect to causation, Dr Nagesh noted that the applicant alleged she was “bullied, harassed, verbally abused, humiliated, belittled and ignored by her manager” however these allegations were refuted by representatives of the respondent who asserted there were no problems until 8 May 2023 when the applicant was informed of performance issues and probable termination “which in my opinion has given rise to her alleged injury which the claimant has perceived as being bullied and harassed”.Dr Nagesh subsequently expresses the opinion that the predominate cause of her condition were the “matters raised with [the applicant] regarding her performance and/or the extension of her probationary period”. Dr Nagesh explains that although the applicant refers to allegations spanning her entire period of employment she was working a full capacity until she was informed of her probationary period being extended.
The parties do not dispute that the applicant developed a psychological condition in the course of her employment with the respondent which has been universally diagnosed as an adjustment disorder. The respondent submits however that the whole or predominate cause of that condition was the action taken by the respondent or proposed to be taken, with respect to dismissal.
I accept that the action taken by the respondent, including the interaction between the applicant and Ms Elhaj on 21 April 2023 with respect to extending probation and the further interactions from that time onwards, ultimately culminating in the termination of her employment on 19 May 2023 contributed to the development of her psychological condition. This is supported by the later records of Ms Schiavoni and the opinion of Ms Stern where she recorded the applicant’s problems occurred before the “ultimate cessation of her probation period” and noted the applicant “stated that there was confusion as on the 8th she was told she was going to be let go, yet was then given a large project of work to do”.
However, considering the opinions of Dr Chow, Dr Bonovas and Ms Stern and the records of Ms Schiavoni together with the evidence of the applicant and Ms Elhaj, I accept that the interactions between the applicant and Ms Elhaj and the applications perception of the development of interpersonal conflict between them between November 2022 and May 2023 also contributed to the development of the applicant’s psychological injury.
Dr Nagesh is clearly incorrect in saying the applicant had no problems until 8 May 2023. She contacted the EAP provider for the first time on 28 April 2023. Further Dr Nagesh’s opinion is based on the premise that the applicant’s characterisation of her interaction with Ms Elhaj is not made out. For the reasons I have set out I do not consider that to be the case. As such, I only place limited weight on the opinion of Dr Nagesh.
Assessment of whether the actions with respect to the applicant’s dismissal was the whole or predominate cause of her psychological condition is a question of fact that requires balancing of the available evidence.
For the reasons set out above, I am satisfied that both the interactions and interpersonal difficulties between the applicant and Ms Elhaj and the action taken with respect to dismissal contributed to her psychological condition and as such action with respect to dismissal cannot have been the whole cause of the applicant’s psychological condition.
In considering whether the dismissal was the predominate or “principal” cause of the applicant’s condition I have in particular considered the opinion of Dr Nagesh that the applicant worked without issue until 8 May 2023 when it became clear to her that she would be dismissed. The difficulty with that opinion however is the record of Ms Schiavoni from
28 April 2023 that clearly reflects the interpersonal conflict between the applicant and
Ms Elhaj was a significant concern and causing distress.As such, I am satisfied that both the interpersonal conflict and the dismissal were significant causes of the applicant’s conditions however I am not satisfied the action with respect to dismissal was the predominate cause over and above the long-term interpersonal conflict.
As such, the respondent’s defence under s 11A(1) of the 1987 Act must fail.
Was the action taken with respect to dismissal reasonable
If I am wrong with respect to the issue of whole or predominate cause, the s 11A(1) defence with respect to dismissal would still fail as the respondent has not established that the action taken or proposed to be taken with respect to the applicant’s dismissal was reasonable.
The assessment of whether the respondent’s actions were reasonable requires weighing all the relevant factors, weighting the rights of employees against the object of employment and whether the actions were ‘fair’.[5] It requires consideration of not only the outcome but also the process in which it was effected.[6] It is not a retrospective assessment with the benefit of hindsight but rather an assessment undertaken by reference as to what was known at the time. Only if the employer has acted fairly in all the circumstances can the action be reasonable.[7]
[5] Irwin v Director-General of Education NSWCC 14068/97, 18 June 1998 per Geraghty J.
[6] Ivanisevic v Laudet Pty Ltd (unreported, 24 November 1998) per Truss CCJ.
[7] Jackson v Work Directions Australia Pty Ltd [1998] NSWCC 45 per Armitage J; Northern NSW Local Health Network v Heggie [2013] NSWCA 255.
For the following reasons I do not accept that the respondent’s actions were reasonable.
Ms Elhaj stated in her statement of 1 June 2023 that for various reasons it was not until a seven week period between mid February 2023 and 4 April 2023 that she was ‘get a glimpse’ of the applicant’s work and at that point held reservations about her ability to apply knowledge from induction accurately.
Ms Elhaj confirms she spoke with the applicant on 21 April 2023 and asked if she would be willing to extend her probation period. Ms Elhaj stated this was to give her further time to assess the applicant’s suitability for the role. It was calculated that the applicant had missed 4.5 weeks of work due to various reasons and as I understand Ms Elhaj’s evidence the proposal she left with the applicant was to extend her probation period by that time.
Ms Elhaj, on taking advice, subsequently found out that there were “difficulties legally” to extend the probation period and that a decision needed to be made before the end of the first six months of employment.
Ms Elhaj was the applicant’s manager. It was not the applicant’s role to “whiteboard” options with respect to her probation period with Ms Elhaj. As I have found above, as a matter of common sense and logic, the suggestion of extending the probation period would have caused concern for the applicant that her employment may be terminated. This really ought to have been known to Ms Elhaj. The respondent is a large company with significant resources. It is not clear why Ms Elhaj did not seek advice from HR about extending the applicant’s probation period prior to speaking with the applicant about it and then finding out it was not possible. Ms Elhaj did not set out for the applicant what her concerns were or what action the applicant needed to take to meet her expectations.
Ms Elhaj, then did not further clarify the position with respect to extending the probation period with the applicant for a further two weeks despite having formed the view by
5 May 2023 that she would not continue with the applicant’s employment.Ms Elhaj states that by 5 May 2023 she had made the decision not to continue the applicant’s employment. Having made that decision, when she subsequently became aware on 8 May 2023 that the applicant was to attend a full day induction session on 9 May 2023 she became uncomfortable and told her not to attend. Ms Elhaj states ‘I said as she was still in probation, it probably made more sense for her to attend the extensive course once out of probation’.
When the applicant asked if she had any concerns with respect to the probation period
Ms Elhaj told her she would rather have that conversation in person. Ms Elhaj states that this was because she wanted time to plan the conversation and seek assistance from HR.The applicant subsequently was certified as being unfit for work and her employment was ultimately terminated by email correspondence on 19 May 2023.
While the ultimately decision to dismiss the applicant may have been reasonable, I do not consider the same can be said for the process undertaken in doing so.
It was unfair on the applicant, in all the circumstances, to raise the prospect of extending the probation period (which it turned out was a “legally difficult” suggestion on the part of
Ms Elhaj) on 21 April 2023, thus beginning a process for termination that had Ms Elhaj had not prepared for nor confirmed she would proceed with and that continued on one view for nearly a month until the termination was officially communicated on 19 May 2023.The applicant was thus left wondering, from 21 April 2023 to likely 8 May 2023 whether her employment would be continued or not. Ms Elhaj should not have raised the issue with the applicant until such time as she was in a position to move forward with communicating and implementing any decision expeditiously and affording the applicant the fairness that an employee would expect, even if the outcome being communicated was difficult.
For these reasons, I do not accept that the action of the respondent with respect to the dismissal of the applicant was reasonable and the defence under s 11A(1) of the 1998 Act must fail on this basis as well.
SUMMARY
The applicant sustained a psychological injury in the course of her employment with the respondent on 11 May 2023.
Action taken by the respondent with respect to the dismissal of the applicant was not the whole or predominate cause of the applicant’s psychological injury.
Action taken by the respondent with respect to the dismissal of the applicant was not reasonable.
The respondent’s defence under s 11A(1) of the 1987 Act is not made out.
I have made orders, consequent upon these findings, in the attached Certificate of Determination.
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