IPN Medical Centres Pty Ltd t/as Sonic Health Group v Kassabian
[2023] NSWPICPD 2
•19 January 2023
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY A MEMBER | |
CITATION: | IPN Medical Centres Pty Ltd t/as Sonic Health Group v Kassabian [2023] NSWPICPD 2 |
APPELLANT: | IPN Medical Centres Pty Ltd t/as Sonic Health Group |
RESPONDENT: | Jeanette Kassabian |
INSURER: | Allianz Australia Workers Compensation (NSW) Limited |
FILE NUMBER: | A1-W5577/21 |
PRESIDENTIAL MEMBER: | Acting Deputy President Michael Perry |
DATE OF APPEAL DECISION: | 19 January 2023 |
ORDERS MADE ON APPEAL: | 1. The name of the appellant, where necessary, is amended to read “IPN Medical Centres Pty Ltd t/as Sonic Health Group”. 2. The Certificate of Determination dated 23 February 2022 is confirmed. |
CATCHWORDS: | WORKERS COMPENSATION – psychological injury – section 11A of the Workers Compensation Act 1987 Act – whether an employer’s action taken in respect of discipline was reasonable – Department of Education & Training v Sinclair [2005] NSWCA 465 and Northern New South Wales Local Health Network v Heggie [2013] NSWCA 255 applied and considered |
HEARING: | On the papers |
REPRESENTATION: | Appellant: |
| Mr L Robison, counsel | |
| BBW Lawyers | |
| Respondent: | |
| Mr S Hickey, counsel | |
| Young and Muggleton | |
DECISION UNDER APPEAL | |
MEMBER: | Mr P Sweeney |
DATE OF Member’s DECISION: | 23 February 2022 |
INTRODUCTION AND BACKGROUND
The appellant employer brings this appeal against an award of weekly compensation made by the Member under the Workers Compensation Act 1987 (the 1987 Act) in favour of the respondent worker. Between 26 May 2021 and 4 June 2021, while the respondent was employed by the appellant as a practice manager at the Edgecliff Medical Centre (EMC), the appellant took action with respect to discipline of her. As a result, she suffered a psychological injury (the injury).
The parties agreed the injury arose out of and in the course of the respondent’s employment, and that the injury was wholly or predominantly caused by actions of the appellant with respect to discipline within the meaning of s 11A (1) of the 1987 Act (s 11A). In this context, the Member noted that the appellant “asserted and the [respondent worker] disputed that these actions were reasonable”.[1]
[1] Kassabian v IPN Medical Centres Pty Ltd t/as Sonic Health Group [2022] NSWPIC 75 (reasons), [7].
The Member identified the actions with respect to discipline which were causative of the injury as the entirety of the disciplinary actions up to and including 4 June 2021; and that the appellant had to prove that those actions, considered as a whole, were reasonable.[2] In the result, he found the appellant did not discharge that onus. It is against this finding that the employer appeals.
[2] Reasons, [77].
ON THE PAPERS
Section 52(3) of the Personal Injury Commission Act 2020 provides:
“(3) 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 and enabling legislation without holding any conference or formal hearing.”
Having regard to Procedural Directions PIC2 – Determination of matters ‘on the papers’ and WC3 – Presidential appeals and questions of law; the documents before me, and the submissions by the parties that the appeal can be determined on the basis of these documents, I am satisfied I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course.
THRESHOLD MATTERS
There is no dispute between the parties that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) have been met, and the decision is not interlocutory in nature.
Preliminary matter
In the Certificate of Determination, and the Application to Appeal Against the Decision of the Member, the appellant employer (the respondent at first instance) was named as “IPN Medical Centres t/as Sonic Health Group”. Shortly after the appeal was made, an application was made by the appellant to correct its name to “IPN Medical Centres Pty Ltd t/as Sonic Health Group”. The respondent worker consented to this. It is thus appropriate, with the consent of the parties, to amend the name of the appellant (the respondent at first instance), where necessary, to read “IPN Medical Centres Pty Ltd t/as Sonic Health Group”.
THE EVIDENCE
There was limited relevant dispute between the parties as to the events giving rise to the injury. The appellant submitted that the “parties differed to no great degree on the primary facts (as opposed to the conclusions on those facts)”.[3] Neither party has taken issue with the Member’s summary of the evidence.
[3] Appellant’s written submissions on appeal (ASA), [14].
I have read the evidence and agree with that summary. The following is essentially taken from the Member’s summary with some abridgement.
Between May and 4 June 2021, the appellant owned and operated two businesses, EMC and Australian Skin Cancer Clinics (ASCC). Both were operated by the appellant from the same premises, and both shared a reception desk.
On 26 May 2021, the respondent was informed by Jane Carpenter, the appellant’s business manager (Ms Carpenter), that allegations of inappropriate conduct had been made against her by the business manager of ASCC, Belinda Smith (Ms Smith) and two former employees of EMC who were by then employed, or about to be employed, by ASCC, Ms Aimee Fea (Ms Fea) and Mr Matthew Williams (Mr Williams).
On 28 May 2021, Ms Carpenter wrote to the respondent (the first letter).[4] After summarising the allegations, the letter informed the respondent that no views had been formed by the appellant as to the accuracy or truthfulness of the allegations, but that they were serious, and if substantiated, could result in disciplinary action, including termination of her employment.
[4] Reply lodged by appellant in proceedings before the Member (Reply), pp 1–3.
The first letter then provided details of the proposed investigation process noting that it was to be a formal process, due to the nature of the allegations. The respondent was also informed that the investigation would be primarily conducted by Ms Carpenter, supported by Rachel Kisbee, HR Business Partner (Ms Kisbee), and that it would involve interviewing potential witnesses to the respondent’s alleged conduct and reviewing any other relevant evidence.
The respondent was advised that she would also be interviewed and given an opportunity to respond to the allegations and any other evidence collected, and that after the investigation phase, findings would be made by the investigator, she would be informed in writing, and that the process was anticipated to last 3 to 4 weeks.
The first letter also noted the respondent was entitled to be represented/supported by a person of her choosing and that the appellant’s People & Development Team and/or employee assistance scheme were able to provide her with support if she wished to utilise that help.
The first letter continued with the following passages:
“Confidentiality
Again I remind you, it is important that confidentiality is maintained during the investigation process so that reputations are protected and the investigation is not compromised. To assist in this respect, please ensure that you do not discuss this investigation with anyone other than the investigator, your support person …, the People & Culture Team and [Ms] Carpenter. In particular you must not discuss the situation with the complainant, any of the witnesses involved in the matter or any other company employee. You are of course free to discuss the situation with your immediate family members and/or any legal or medical advisors.
Further information
Further information in relation to the company’s approach to grievances generally can be found in our Grievance Policy & Procedure (a copy of which is attached).
If you have any questions or concerns in relation to the investigation process please contact myself or [Ms] Kisbee …
Summary of Allegations
On the 25 May 2021 you:
· Spoke to [Ms] Smith … inappropriately during a phone conversation by raising your voice at her, accusing her of poaching your team member and abruptly ‘slamming’ the phone down to end the call.
· Told [Ms] Fea that she was not to attend any of her future rostered shifts with [the appellant], which was in retaliation to her accepting a position with [ASCC].
· Told … [Mr] Williams that he would no longer receive any shifts with [the appellant] effective immediately, and his existing shifts would be cancelled … in retaliation to [Ms] Fea’s appointment.
· Told [Mr] Williams … no assistance would be provided to [Ms] Fea when she commences … at ASCC, in retaliation to her transfer to ASCC.
On the 26 May 2021 you:
· Provided details of [Ms] Smith’s confidential complaint to nine Doctors at the [EMC] in the form of a letter of support you drafted and asked each of them to sign. This occurred after a conversation with your Business Manager where she advised you of your requirement to maintain confidentiality.”
On 4 June 2021, Ms Carpenter sent the respondent a letter (the second letter),[5] advising:
“… additional allegations have come to light … it is now also alleged that you have breached the Safe & Quality Use of Medications Policy and the Workplace Behaviour Policy.
… we are in the process of understanding these additional allegations further, and we will be in a position to share with you the full details of the allegations no later than Wednesday, 9 June 2021.
Suspension
Due to the seriousness of the allegations and in order to assist with the investigation process, a decision has been made to suspend you on full pay whilst the investigation is being completed. The suspension is effective from today’s date.
During your period of suspension you must not undertake any work, enter the workplace or make contact with any employees (other than normal social contact) without my permission.
I will notify you when it is appropriate for you to return to work.
Confidentiality
We … remind you again of the importance of confidentiality during this investigation process (as discussed with you on the 26 May 2021 and as set out in our letter of 28 May 2021).”
[5] Reply, p 4.
Annexed to the letter Was an expanded summary of the allegations against the respondent relating to specific examples of alleged breaches of the Safe & Quality Use of Medicines Policy (medicines policy) as follows:[6]
“a) in late 2020 and May 2021 you coordinated the ordering and receipt of numerous samples of the prescription medication Contrave for your personal use.
b) you directed reception staff to bring these medication samples to your office rather than first to the Doctor who signed the request form, or to a nurse.
c) you took possession of this medication as a non-clinical staff member.
d) you stored this medication in an unsecured location within your office”.
[6] Reply, p 5–8.
The expanded summary also included further allegations of “unwelcome and intimidating conduct towards employees during your employment as Practice Manager…”, breaching the Workplace Behaviour Policy, as well as allegations of breaching the Staff Privacy and Confidentiality Policy by sharing confidential information with employees and contractors. It also noted the respondent was required to attend an interview with Ms Carpenter and Ms Kisbee.
The respondent worker
The respondent’s evidence appears in written answers to various questions put to her by the investigator.[7] Relevantly, she noted she was on the reception desk on the morning of 27 May 2021, when Ms Carpenter rang and told her that Ms Smith “had made a complaint and asked me to send her file notes of yesterday’s incident … was making the complaint on behalf of her employees, [Ms Fea] and [Mr Williams]”. The respondent also “questioned whether the complaint was being treated as a tenant complaint or an employee complaint. I felt that this should have been a tenant complaint and treated as such”.
[7] Application to Resolve a Dispute lodged in proceedings before the Member (ARD), pp 2–10.
The respondent then notes a later telephone discussion with Ms Carpenter on 27 May 2021 when Ms Carpenter asked, “why statements were attached. I advised because a complaint was made and I was preparing file notes as requested”. The respondent continued:
“[Ms Carpenter] advised it is a formal complaint, it should have been confidential. I advised her that she did not tell me that on the phone this morning. She responded ‘I should have been clearer’.
During this phone call [Ms Carpenter] advised ‘they are wanting to make this a first and final but I will get them down to a file note’. I responded ‘first and final are they kidding’ she replied ‘the whole Daniella thing doesn’t help you …’
I said ‘… all I did was hire an employee that did not work out’ [Ms Carpenter] replied, ‘she is causing us trouble behind the scenes that I can’t even tell you about’ I said, ‘one thing has nothing to do with another’ she responded ‘don’t worry I will get it down to a file note’.”
The respondent then says she received a number of calls “escalating in inten[s]ity” from Ms Carpenter during that week, advising of the progress with Human Resources (HR). The respondent also noted that the first letter included an allegation that she had spoken to doctors, and they had provided her with statements. The respondent then says she:
“… rang [Ms Carpenter] … asked her why she would add this to the list of complaints, I had already explained what occurred … she acknowledged that her phone call should have been clearer.
She advised me that I was to watch how I spoke to her … she is my manager. I was upset. I told her that she pretended to be helping me and I feel … tricked.”
Following this discussion, the respondent saw Dr May Smith, a general practitioner (GP) at EMC, who “sent me home for one week with a sick leave certificate for acute anxiety”. On the following Friday, the respondent received a call from Ms Carpenter who advised her that she was not to come to work on Monday due to “gross misconduct”. Ms Carpenter explained that Contrave, an antidepressant prescribed to assist weight loss, had been found in her drawer in breach of the appellant’s medicines policy. The respondent wrote:
“I explained that this was given to me by the Doctors as a patient. I had a prescription in my medical records and they were giving me samples as they would any other patient.”
During this conversation, the respondent says Ms Carpenter advised her that there “may also be some bullying complaints”. The respondent says she was distressed, and she rang her doctor. She then noted that when she obtained the full list of allegations it contained “additional allegations that were clearly investigated by a person that had allowed their personal opinion of me bias the investigation…”. She also wrote that in her absence, Ms Carpenter had searched through her office without her permission or knowledge and had “the entire week to officially and unofficially question staff … went on a one week fishing expedition”.
The respondent also stated that some of the allegations demonstrated “vindictiveness on the investigator’s part” given they had been resolved in 2019 by Ms Carpenter’s predecessor.
The respondent also said she was distressed during that week, and was off on sick leave, before being suspended, by the persistent phone calls from Ms Carpenter. She was feeling anxious, constantly crying and not sleeping. Her GP diagnosed her with acute anxiety.
The respondent says she was humiliated by having to seek permission every time she visited her GP at EMC. She was told not to speak to doctors or staff, and they were instructed not to speak with her. She was also denied access to her personal belongings. When she attended her GP, she was not provided with her personal diary. This was ultimately retrieved by Ms Kisbee and returned to the respondent. Ms Kisbee initially told the respondent that the diary could not be provided as it contained “confidential information”.
On reviewing the diary, the respondent saw a notepad, that had been clipped to the inside of the diary, had been removed. Upon enquiry, Ms Kisbee admitted removing it and agreed to return it. On receiving the notepad, the respondent “discovered a page had been torn out”.
When asked to summarise the key factors that led to her injury, the respondent said they were “[Ms] Carpenter allowing her personal feelings towards me result in a blatant misuse of authority … and very distressed at not being allowed to work due to [her] lies and manipulation”. The respondent said that since a dispute over a billing issue some years previously, her relationship with Ms Carpenter had been “frosty”.
Jane Carpenter
Ms Carpenter[8] did not agree she and the respondent had a “frosty or difficult relationship”. She noted an episode in May 2021 during which she informed the respondent that rosters had not been punctually uploaded onto the system contrary to an earlier directive; and said this provoked a reaction from the respondent who said she was “not used to being micromanaged”. Ms Carpenter offered mediation, the respondent said that was unnecessary, and since then “our relationship has been open and good, with regular contact”.
[8] Reply, pp 34–42.
Ms Carpenter noted the respondent rang her on 25 May 2021 and was “quite upset” about an EMC staff member being offered a role at ASCC; stating Ms Smith had “head hunted” one of her staff again. Ms Smith made a complaint by email to Ms Carpenter who then sought documentation. Ms Carpenter said she asked the respondent to “keep it confidential”; however, the next day, she received a series of signed statements from other staff members who the respondent had approached. The respondent had described this as her “supporting documentation”. Ms Carpenter said she had “told her it was a formal complaint and it should have been kept confidential”. Later that day, the respondent advised Ms Carpenter she had obtained a letter signed by each of the doctors that she was “a professional practice manager”. Ms Carpenter stated she told the respondent “I told you it was confidential”.
Ms Carpenter states that on 27 May 2021, Ms Smith asked her to speak to Ms Fea as she was distraught at the way the respondent “was treating her once she found out [Ms Fea] was leaving”. Ms Carpenter disputed the respondent’s assertion that she had raised the issue of the former employee, Daniella, in their conversations, stating that it was the respondent who raised Daniella. Ms Carpenter also denied calling the respondent again during the course of that week, stating she did not speak to her again until 4 June 2021.
During the week commencing 31 May 2021, Ms Carpenter filled the role of practice manager while the respondent was absent on sick leave. Ms Carpenter then stated that she “did not intend on interviewing staff onsite, but a number of staff approached me to discuss issues with [the respondent]. I did sit in on a meeting with [Ms] Kisbee and some staff in relation to [Ms Smith’s] complaint … during the course of interviews with [Ms Kisbee], staff raised other allegations … coming to me and wanted to tell me what had been happening to them in terms of [the respondent’s] management of them and her treatment of them. I needed to get [Ms Kisbee’s] HR support in dealing with that. I deny it was my intention to seek out other complaints from staff”.
Ms Carpenter also said she found samples of Contrave in the respondent’s desk drawer. She also said she had been told by Dr Daniel Richter that the respondent had been asking reception staff to get doctors to obtain the medication for her. She stated there were 26 boxes of medication with a one month’s supply in each box, noting “it is a Schedule 4 medication, which means it is prescription only medication which should be under lock and key”.
Ms Carpenter also noted that on 4 June 2021, she advised the respondent of her suspension on full pay while misconduct allegations were investigated and that:
“At no point did I think … there would be serious misconduct allegations made. At all stages I have brought in [Ms Kisbee] to manage issues with staff. I also followed our process regarding complaints and grievance.
[The respondent] then sent a number of texts to me. I suggested that [the respondent] call [Ms Kisbee] and [Ms Kisbee] then spoke to her. I have not spoken to [the respondent] since”.
Claire Lenton
Ms Lenton[9] is the appellant’s NSW and ACT state manager. She acknowledged Ms Smith’s complaint and initially “let [Ms] Carpenter and HR handle it”. Ms Lenton said she understood the respondent’s resentment at a staff member moving to work for ASCC, but it was “her reactive behaviour that … concerned us”. She noted an incident involving the respondent and a patient not wearing a mask in October 2020 and said the respondent’s behaviour towards that patient was aggressive and resulted in a warning for failure to follow the correct procedure in banning a patient and for failing to wear a mask herself.
[9] Reply, pp 43–50.
Ms Lenton stated that on the respondent ceasing work, Ms Carpenter temporarily worked at EMC, and in those circumstances, Ms Carpenter saw the medication in the respondent’s desk drawer. Ms Lenton said she told Ms Carpenter she “needed to take photographs of the medication and speak to [Ms] Kisbee about it”. Ms Lenton stated that while Ms Kisbee and Ms Carpenter were in the office, “staff kept coming forward and advising … of bullying allegations regarding [the respondent]” and were “very anxious about [the respondent] returning to work”.
After receiving a complaint from the respondent as to the manner in which Ms Carpenter had “grossly” mismanaged the incident, Ms Lenton advised the respondent that she would assume the role of the investigator, assisted by Ms Kisbee.
Ms Lenton noted it appeared that doctors were aware that samples of Contrave were being given to the respondent who stated that those doctors allowed her to order samples in the practice and then gave them to her. Ms Lenton continued:
“If a staff member wants access to … medication and the doctor wants to assist them, we can help facilitate that via the doctors, however the proper process needs to be followed … outlined in our Medication Storage Policy, which [the respondent] has signed.”
Ms Lenton said she and Ms Kisbee sat with Ms Carpenter when she called the respondent on 4 June 2021 to advise of the further allegations. The respondent was to be suspended on full pay. Ms Lenton stated that Ms Carpenter “was very calm and compassionate while [the respondent] was escalating during the conversation. From the start [Ms] Carpenter has followed HR’s directives and advice in managing the matter”.
Ms Lenton also acknowledged that a number of doctors wrote letters of support for the respondent and “we don’t dispute the good work she has done in the practice. The doctors have also demanded to know what is going on with our investigation, which is difficult because it is confidential”.
Rachel Kisbee
Ms Kisbee[10] referred to a previous occasion when the respondent was investigated for the manner in which she had treated a patient for not wearing a mask and noted that a warning letter at the conclusion of that investigation on 18 November 2020 was given. She also noted the investigation of the respondent in May 2021 started after the complaint from Ms Smith – but the finding of the prescription medication in her bottom drawer and subsequent complaints of bullying resulted in the respondent being stood down on full pay. She said:
“Once [Ms] Carpenter had an understanding of the serious allegations of potential bullying behaviour … she asked to meet with those staff formally and asked for someone in HR to also be present … I was involved in all but one of those conversations. My impression was that those employees … want[ed] to share their concerns with us. They were not coaxed out by [Ms] Carpenter.”
[10] Reply, pp 51–59.
Ms Kisbee also noted her telephone conversation with the respondent on 4 June 2021, when the respondent sought reasons why she was stood down, and stated that she told the respondent:
“it related to the potential breach of the Safe Use of Medicine Policy, and also some employee reports with potential allegations of bullying or harassing. The [respondent] asked me … who had made the complaints, and I said we … still did not have full witness statements. I told her we would share with her any potential breaches of the Workplace Behaviour Policy, but I needed to review the merit of the allegations first.”
As to confidentiality, Ms Kisbee confirmed that the appellant insisted the respondent should not go into the office area and engage with staff and doctors “other than her own GP when she visits”. Ms Kisbee said this was not done to control the respondent’s visits but “to be mindful of other staff”.
Ms Kisbee noted the return of the respondent’s personal items in June 2021. She conceded she did “remove some pages clipped into the notebook with work bank details”, and that she put those pages into the respondent’s desk drawer and forgot about it “until she emailed me later asking me to send it to her”. Ms Kisbee also said the investigation had been run “fairly and in line with our processes” and “the allegations … put to the [respondent] are quite serious and if substantiated could mean termination”.
Belinda Smith
Ms Smith[11] confirmed ASCC shares premises with EMC, and stated that prior to 2021, there had only been one staff member who had moved across to ASCC from EMC. Mr Williams was a nurse who came across from EMC to work for ASCC four days a week as practice manager. He maintained one day a week at EMC. Ms Smith then stated:
“I only know the staff at [EMC] to say hello to. [Ms] Fea and [Mr] Williams have told me that a number of staff have left. I understand most staff are leaving because of the behaviour of the [respondent] and the work atmosphere.”
[11] Reply, pp 92–97.
On 25 May 2021, when speaking on the telephone to the respondent, she was “shouting and was difficult to understand”. The respondent accused Ms Smith of poaching her staff. Ms Smith said the respondent “yelled so much that it was hard to understand what she was saying … she said she would call [Ms] Carpenter and then slammed the phone in my ear”.
Ms Smith said the respondent’s manner of speaking to her was “unprofessional” and she made a formal complaint. In relation to Ms Fea’s transfer, Ms Smith stated the respondent “again instructed her staff not to talk to our staff”, and that she witnessed the respondent reprimand staff for talking to ASCC staff. After that complaint, Ms Smith stated that Ms Carpenter met with Ms Fea and Mr Williams to discuss what had taken place from their perspective; and that Ms Fea told Ms Carpenter that the respondent had approached both her and Mr Williams on learning they were to work for ASCC, and that they “would not be working for [the appellant] effective immediately, and would not need to fill any more shifts”.
Dr Diane Cheng
Dr Cheng[12] stated that the respondent interacted well with the EMC doctors and ran the practice in an efficient manner. Dr Cheng did not comment on the way the respondent interacted with administration and reception staff but said the respondent had not had any “run ins” with her patients. She also stated, “we are a large practice and at times [the respondent] is required to deal with difficult patients. We have 10 doctors on each day and if there is a difficult patient [the respondent] has to deal with them”.
[12] Reply, pp 98–101.
Dr Cheng said she did not witness any friction between the respondent and ASCC staff. She observed that the respondent found it particularly disappointing when Ms Fea moved to ASCC as EMC was then under-staffed. As to the medication issue, Dr Cheng stated:
“I am aware that [the respondent] is taking Contrave medication. I can’t comment on whether other doctors [are] aware that samples of Contrave were being ordered in for [the respondent]. I signed for [the respondent] once because I knew she was on Contrave. I told the drug representative that my practice manager was on the drug and I asked him if I might sign for her to have some sample medication. We would be happy to give him feedback on the medication after the trial period.”
Karen Mansour
Ms Mansour[13] was the registered nurse at EMC and reported directly to the respondent. She understood, from the respondent, that the relationship between the respondent and Ms Carpenter “was becoming difficult earlier this year”. She also observed that when Ms Carpenter visited the office “their interactions were strained”. Ms Mansour continued:
“… since [the respondent] started as Practice Manager the business has done well and the doctors have been very happy with her. With the previous Business Managers … things always ran smoothly. With the change of business manager this year things [went] downhill … no organisation at reception. When the doctors ask reception staff to do things they don’t always do things straight away.
There has always been an issue between the Skin Clinic and IPN. They have taken a couple of our staff members.”
[13] ARD, p 11; Reply, pp 102–106.
Ms Mansour also said that when Mr Williams and Ms Fea went across to ASCC, they did not tell the respondent in advance. As to the prescription medications, Ms Mansour stated:
“we don’t keep medications in the practice anymore … we haven’t for a few years now. Last … accreditation some doctors had expired medications in cupboards in their room. We sometimes kept medication in the cupboards … until about 2 years ago but we don’t do that anymore. Any medications doctors order in are supposed to be written up by the doctors, but that was not happening. We felt it was better for the practice not to carry samples. Sometimes doctors would get samples in for specific patients, but we haven’t had a specific area to keep them. If doctors get samples in now that is their responsibility. The doctors don’t keep records of who they give samples to and that was one of the reasons we decided initially on to keep them in the treatment room.”
THE MEMBER’S REASONS
The reasons are detailed and comprise 21 pages. The Member summarised the evidence, including the first and second letters, the evidence from the respondent, Ms Carpenter, Ms Lenton, Ms Kisbee, Ms Smith, Dr Cheng and Ms Mansour.
Neither party pointed to any error or omission in the Member’s summary.
The Member also summarised the relevant law relating to s 11A, including in Northern New South Wales Local Health Network v Heggie;[14] Commissioner of Police v Minahan;[15] Irwin v Director-General of School Education;[16] Ivanisevic v Laudet Pty Ltd;[17] Pirie v Franklins Ltd[18] and Department of Education & Training v Sinclair.[19]
[14] [2013] NSWCA 255 (Heggie).
[15] [2003] NSWCA 239 (Minahan).
[16] Unreported, 18 June 1998 (Irwin).
[17] Unreported, 24 November 1998 (Ivanisevic).
[18] [2001] NSWCC 167.
[19] [2005] NSWCA 465 (Sinclair).
The Member noted that “Heggie casts some doubt on whether it is always necessary to consider the rights of the employee. Obviously, it will be necessary to undertake that task in many cases … I see no reason why this is not such a case”.[20] Counsel for the appellant conceded in his submissions in reply[21] that the Member was correct when stating the present case “is such a case” - although I acknowledge this submission was also, and mainly, intended to refer to employees of the appellant other than the respondent.
[20] Reasons, [71].
[21] Appellant’s submissions in reply (ASR), [5].
The Member noted that a finding that an employer has not proven that disciplinary action is reasonable is not a finding that such action is unreasonable, and “… reasonableness does not require the employer’s actions in respect of discipline to be flawless”.[22] The Member stated that the allegations against the respondent “when considered together, support the [appellant’s] action in establishing an enquiry into the allegations”.[23]
[22] Reasons, [72].
[23] Reasons, [74].
The Member accepted Ms Carpenter thought that the allegations, if proven, might result in a warning to the respondent, but were not likely to threaten her employment continuing. However, after the respondent ceased work following receipt of the allegations, Ms Carpenter substituted for her as office manager. During this period, Dr Richter told Ms Carpenter there were boxes of Contrave, said to be a schedule 4 medication, to be found in the bottom drawer of the respondent’s work desk.
During this period, EMC staff informed Ms Carpenter and Ms Kisbee of inappropriate treatment by the respondent, such allegations including cancelling employee shifts, reducing their hours for failing to follow instructions, (including to come to work when sick) and suggesting that an employee not tell the truth during the investigation.
The Member noted that while some of these allegations were trivial, others could be serious, and the appellant was obliged to investigate them. The Member said it was reasonable that the appellant suspend the respondent on full pay given the nature of the allegations.[24]
[24] Reasons, [76].
The Member bore in mind that the relevant disciplinary action “is the initiation of the investigations, its conduct, and the suspension of the [respondent] from employment”, also noting the appellant did not make a finding of misconduct or breach of its policies as the respondent did not return to work after receipt of the first letter, so that there was no question of any inappropriate penalty or punishment.[25]
[25] Reasons, [77].
The Member noted: “The actions with respect to discipline which were causative of the [respondent’s] psychological injury were the entirety of the disciplinary actions up to and including 4 June 2021” and that the appellant “must prove that these actions considered as a whole were reasonable”.[26]
[26] Reasons, [77].
The Member noted “several issues relevant to reasonableness that cause some concern”. First was the respondent’s assertion, denied by Ms Carpenter, that her relationship with Ms Carpenter was “frosty”. The Member noted that Ms Mansour also stated the interactions between the respondent and Ms Carpenter “were strained”. Nevertheless, he found it logical that Ms Carpenter should be involved in the investigation and fill in as practice manager during the respondent’s absence. The Member also formed the opinion that the investigation was not commenced out of malice towards the respondent or conducted in a biased manner.[27]
[27] Reasons, [78]–[80].
The Member then turned to the question of confidentiality, noting the first letter directing the respondent to not “discuss the situation with the complainant, any of the witnesses involved in the matter or any other company employee”. The second letter also directed her to “… not to enter the workplace or make contact with any employees without the permission of Ms Carpenter”. The Member stated that this prohibition on speaking to the complainants was understandable but, “[o]n the other hand the prohibition on speaking to any company employee is a restriction on the [respondent’s] right to obtain evidence which might be relevant to the allegations made in the two letters. If she could not speak to any employees of the company, she would not be able to ascertain whether other employees supported her version of events”.[28]
[28] Reasons, [82].
The Member considered the “conflicting issues of principle”, noting the appellant’s submission that an employer has an obligation to protect its staff. The Member stated “it is probably appropriate to limit the possibility of confrontation between a worker, who is the subject of an investigation and other employees, who may be potential witnesses. Thus, some limitation on entering premises while suspended may often be appropriate”. The Member gave examples such as “where employees told the employer that they were afraid of the worker, or, alternatively, where there was some evidence of the suborning of a witness”.[29]
[29] Reasons, [83].
The Member also noted that it may be inappropriate for other employees to be told of the name of the complainant or the substance of the complaint, if it might expose the employee to unnecessary scrutiny, thereby discouraging other employees from making similar complaints in the future. The Member also took into account that in some circumstances it would be appropriate for an employer to “provide the worker with statement evidence from all relevant witnesses. On other occasions, I have found that it is an unnecessary restriction on the right of the worker to obtain evidence to refute the allegations …”.[30]
[30] Reasons, [83].
The Member then observed that it was necessary to consider the process as a whole in reaching a conclusion as to reasonableness and set out the passage in Sinclair at [97]. He noted he was “bearing this instruction in mind” when concluding “that the blanket restriction imposed” by the appellant on the respondent “communicating with its employees in this case is difficult to justify on the basis of principle”; noting the allegation that the respondent had breached the appellant’s Safe & Quality Use of Medications Policy was a very serious one, and which could lead to the respondent’s dismissal from employment with serious consequences for her career. The Member noted that the doctors who obtained these samples and provided them to the respondent may have been in a position to provide evidence which may have assisted the respondent to defeat or mitigate the allegation made against her, and to “prevent the [respondent] from obtaining evidence from these medical practitioners by communicating with them in writing or over the telephone severely handicapped her right to defend herself”.[31]
[31] Reasons, [84] – [87].
The Member found that the prohibition on the respondent communicating with the employees was intended to cover these medical practitioners. He concluded that in the circumstances, this was an infringement of an essential right, and led him to the “conclusion that the [appellant] cannot prove … its actions with respect to discipline were reasonable”. He stressed this was “not a determination that the employer’s actions were unreasonable”.[32]
[32] Reasons, [87].
The Certificate of Determination issued on 23 February 2022 records:
“1. The [respondent] suffered psychological injury arising out of and in the course of employment which is deemed to have occurred on 4 June 2021 for the purposes of the [1987 Act].
2. The [appellant] has not established that the respondent’s injury was wholly or predominantly caused by reasonable action with respect to discipline in accordance with section 11A(1) of the 1987 Act.
3. The [respondent] was totally incapacitated as a result of the injury between 24 September 2021 and 1 December 2021.
4. Order the [appellant] to pay the [respondent] the sum of $1,068.78 per week pursuant to section 37 of the 1987 Act during this period.
5. Credit to the [appellant] to [sic] payments made.”
THE GROUNDS OF APPEAL
The appellant raises the following grounds:
(a) Ground One - the Member failed to find that the respondent acted reasonably (error of fact)
(b) Ground Two - the Member misdirected himself as to the legal principles relevant to a finding of reasonableness (error of law).
LEGISLATION
Relevantly, s 11A of the 1987 Act provides that:
“(1) No compensation is payable … in respect of … 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 … discipline … of workers …”
SUBMISSIONS
Appellant’s submissions as to Ground One
The appellant submitted as follows. The only issue was whether the appellant had acted reasonably. The Member correctly recorded the issue at [7] of his reasons. The appellant’s “response to the extremely troubling conduct of … the respondent, was commensurate with the seriousness of what had occurred, was measured in its response, and was, ultimately, reasonable.”
The parties “differed to no great degree on the primary facts (as opposed to the conclusions on those facts)”. The respondent accepted there was an incident where a patient did not wear a mask. She also acknowledged she was given a “full list of allegations which would have to be described as procedurally fair … four allegations by Ms Smith and one from Ms Carpenter … worker provides limited detail on these issues”.[33]
[33] ASA, [14].
The appellant’s case was “more detailed and the worker’s conduct is set out in three letters … also borne out by … investigator’s reports … the problematic conduct … included … being rude to a patient … speaking to Ms Smith in a raised voice and slamming down the phone … telling Ms Fea that she was not to attend shifts … telling [Mr] Williams that he would no longer receive shifts … refusing to provide assistance to Ms Fea … providing details of the complaint to … nine doctor-staff of [EMC] despite being asked to maintain confidentiality … coordinating and receiving sample medication (Contrave) for her personal use as a non-medical staff member … storing the medication in an unsecured location.”[34]
[34] ASA, [15].
The Member “placed considerable weight” on the confidentiality aspect of the investigation. Two points arose from this. First, the employer had obligations to other staff members to prevent the workplace from being confrontational. Second, even if the confidentiality aspect of the investigation “was unreasonable”, such “does not in the scheme of the facts as a whole, [make it] unreasonable”. What occurred, all things considered, was reasonable, even if it was imperfect. An employer’s s 11A case should not fail “simply because some fault can be found - this is to hold an employer to a standard of perfection, which is something of a very different nature to simply acting reasonably” (emphasis in original). It was then submitted this “dovetails with ground 2 below as to the legal aspects of the test”.[35]
[35] ASA, [16].
Appellant’s submissions as to Ground Two
The Member referred to “several … authorities on s 11A and the appellant does not suggest that those authorities were misrepresented”. But they were “misapplied to the facts”.[36]
[36] ASA, [17].
Heggie emphasises the relevant enquiry is objective “and that the action in question is the action which is the causative factor for injury (so, whilst one may look to the surrounding circumstances, a proposition that the employer was in some general way reasonable is not enough). Objectively, the appellant … was a medical practice confronted with misuse of medical supplies by its receptionist, against the background of inappropriate inter-personal behaviour on her part. If section 11A does not sanction a response such as the appellant’s … it is difficult to conceive of the section applying on any set of facts”.[37] Section 11A is not beneficial legislation and should not be construed in favour of workers to the extent it is ambiguous.
[37] ASA, [17].
The defence “… was powerful and it should have been upheld. Part of the strength of the case arose from the nature of the appellant’s business as a medical practice – and the rights of an employer must be taken into account …”.[38]
[38] ASA, [18].
The appellant had a right and/or obligation to ensure proper conduct in relation to medicines on its premises, and to ensure that its workers behaved respectfully in the workplace.
The type of misconduct “was something … the [appellant] had a right, or at least a legitimate interest, in keeping confidential at least in the investigative stages”.[39]
[39] ASA, [20].
The reliance by the Member on “the centrality of the confidentiality point is a departure from the approach endorsed in Sinclair and the Member misdirected himself accordingly”.[40]
[40] ASA, [23].
Respondent’s submissions as to Ground One
The respondent submitted the following. The determination and findings as to the confidentiality restrictions imposed on the respondent, to the extent that she was unable to resort to obtaining support for her defence to the allegations against her, was correctly classified as not being “reasonable action”. Such action “could hardly be classified as ‘blemishes’ as in Sinclair as the restrictions went to the heart of the workers right to defend herself or even mitigate the potential outcome …”.[41]
[41] Respondent’s submissions on Appeal, [15].
The restrictions imposed by the appellant upon the respondent prohibited her communicating with employees and doctors and exercise of her right to reasonably contest the allegation made against her. The Member was correct. This was a fundamental right which denied her the opportunity to defend herself and was a denial of natural justice.
Respondent’s submissions as to Ground Two
The respondent submits that Member correctly dealt with the principles, including in Heggie, Irwin, Ivanisevic and Sinclair. He also carefully considered the confidentiality issues, noting that a prohibition on speaking to the complainants was understandable, but that a prohibition on speaking to any company employee was a restriction on her right to obtain evidence which might be relevant to the allegations. He also noted that if the worker could not speak to any employee, she would not be able to ascertain whether other employees supported her version of events.
The Member also reasoned carefully between occasions when a worker’s rights to obtain evidence may or should be restricted to times of entry to premises, to avoid conflict between employees and a worker who may possibly cause fear to employees or who may cause confrontation, and other situations where it had been unnecessary to restrict a worker’s rights to obtain evidence to refute allegations. The Member noted Sinclair (at [84] of his reasons) before coming to his conclusions as to reasonableness.
With the blanket restriction of confidentiality imposed on the worker, the whole of the disciplinary process was tainted with an unreasonable restriction upon the worker’s rights to otherwise reasonably contest the allegations made against her.
The respondent submits the Member weighed up the cases for each party for his fact findings and applied the principles including the objective test dictated by Heggie. He correctly found that the appellant employer did not prove that its actions with respect to discipline were reasonable.
That the appellant was a medical practice does not, contrary to the submission for the appellant, give rise to a different or special approach to the application of s 11A principles.
Appellant’s submissions in reply
The appellant maintains that its actions with respect to the confidentiality issue were reasonable. It was “necessary” for the “respondent” (sic, appellant) to require confidentiality to protect the integrity of the process and the welfare of other workers. It is a “two-fold justification”: even if “one regards Heggie as favouring the worker … the other justification remains applicable”.[42]
[42] ASR, [4].
Heggie does not stand for the proposition that other workers’ welfare can be ignored.
Even if the confidentiality point is resolved in the respondent’s favour, “the broader context remains … which is gross misconduct by the worker, and a reasonable, if imperfect, response was brought to bear by the employer when one considers the entire factual matrix”. To focus only on confidentiality, “even if that was suboptimum, would be to hold the employer to a standard of perfection, not reasonableness.”[43]
[43] ASR, [6].
DISCUSSION
This appeal is brought pursuant to s 352 of the 1998 Act. Section 352(5) of the 1998 Act means that the matters for determination here are limited to whether the Member’s decision was affected by “any error of fact, law or discretion” and to “the correction of any such error”. The appeal “is not a review or new hearing”.[44]
[44] Heggie, [31] per Basten JA; Iqbal v Hotel Operation Solutions Pty Ltd [2022] NSWCA 138 (Iqbal), [9]–[11] per Basten JA.
In Heggie, Sackville AJA stated:
“… as Roche DP pointed out in Raulston v Toll Pty Ltd [2011] NSWWCCPD 25, at [20], the observations of Allsop J in Branir Pty Ltd v Owston Nominees (No 2) need to be borne in mind, particularly (I would add) where the challenge is to an evaluative judgement such as the reasonableness of actions by an employer with respect to discipline. Allsop J said, in relation to the application of the principle in Warren v Coombes, (at [28]) that:
‘in [the] process of considering the facts for itself and giving weight to the views of, and advantages held by, the trial judge, if a choice arises between conclusions equally open and finely balanced and where there is, or can be, no preponderance of view, the conclusion of error is not necessarily arrived at merely because of a preference of view of the appeal court for some fact or facts contrary to the view reached by the trial judge.
A fortiori, if a statutory right of appeal requires a demonstration that the decision appealed against was affected by error, the appellate tribunal is not entitled to interfere with the decision on the ground that it thinks that a different outcome is preferable …”.[45]
[45] Heggie, [71]–[72].
Ground One
This ground asserts error of fact only and does not detail how or why error occurred. However, I read and will deal with it in conjunction with the ASA and ASR. Two points are made about the confidential aspect of the investigation. Firstly, the employer had obligations to other staff members to prevent the workplace from being confrontational (and it was therefore necessary to require confidentiality).[46] If this is put as an argument that the Member erred, there is little, if any, detail as to how that may be so, remembering that I have no authority to intervene with his decision unless the appellant establishes not merely a preference for a different view of the evidence, but an error in the fact-finding exercise undertaken by the Member.[47]
[46] ASA, [16].
[47] Iqbal, [11].
Contrary to any implied argument to the contrary, the appellant has accepted that the Member did acknowledge “the employer had obligations to other staff members to prevent the workplace from being confrontational”. In my opinion, the Member addressed this in his reasons, at [81] – [83], in a careful and logical way. Against the background of his detailed and accurate summary of the evidence – including, for example, noting Ms Kisbee’s statement[48] that confidentiality was implemented “to be mindful of other staff” – he accepted that the prohibition on speaking to the complainants was understandable; but found that a prohibition on speaking to any company employee “is a restriction on the [respondent’s] right to obtain evidence which might be relevant to the allegations … If she could not speak to any employee … she would not be able to ascertain whether other employees supported her version of events”.[49]
[48] Reasons, [56].
[49] Reasons, [82].
In considering this, the Member considered all the evidence and looked at both sides of the argument, stating there were “conflicting issues of principle”. He expressly noted the appellant’s argument that it had an obligation to protect its staff. He accepted that argument, but only to some extent - stating it was “probably appropriate to limit the possibility of confrontation between a worker, who is the subject of an investigation and other employees, who may be potential witnesses. Thus, some limitation on entering premises while suspended may often be appropriate”.[50] Thus, the Member opined that the question of whether it is reasonable to impose confidentiality restrictions, and if so to what extent, is dependent on the facts of each case.
[50] Reasons, [83].
The Member provides other examples[51] of when it may or may not be appropriate to take action, such as the confidentiality restrictions imposed on the respondent, for various purposes associated with ensuring an investigation proceeds in an appropriate way, such as steps to prevent the discouragement of other employees from making similar complaints in the future or the potential of the suborning of a witness.
[51] Reasons, [83].
The Member concluded, in all the circumstances of the present case, that the blanket restriction imposed by the appellant on the respondent in communicating with all of its employees was difficult to justify, reasoning that the “allegation that the [respondent] had breached the … Safe & Quality Use of Medications Policy” was a very serious one; and could potentially lead to her dismissal from her employment with serious consequences for her career as a practice manager. He went on (at reasons [86]) to note it was clear that the doctors who obtained the samples and provided them to the respondent may have been in a position to provide evidence which may have assisted the respondent defeat or mitigate the allegations against her; and to prevent her from obtaining evidence from these doctors by communicating with them in writing or over the telephone severely handicapped her right to defend herself.
The appellant amplified its point in this respect,[52] submitting it was “necessary” there be a requirement of confidentiality from the employer’s perspective “in order to protect the integrity of the process and the welfare of other workers”. But in my opinion the analysis of the Member with respect to “obligations to other staff members to prevent the workplace from being confrontational”, by reference to the facts of each case, more than adequately deals with this point. He acknowledged and took into account the “conflicting issues of principle” and carefully reasoned how the result of each case may depend upon the particular circumstances, before going on to find that the “blanket restriction” was “difficult to justify on the basis of principle”, and that the “infringement of such an essential right” (to communicate with the medical practitioners) went “to the very heart of natural justice”.
[52] ASR, [4].
The Member also made findings that he had “little doubt from the context of the matter” that the prohibition on the respondent communicating with the other employees was intended to cover these medical practitioners. He noted that Ms Carpenter considered it to be a breach of confidentiality when the respondent obtained letters of support from doctors at the practice “in respect of the first allegation”.[53]
[53] Reasons, [87].
I am unable to discern a clear argument or criticism from the appellant about this specific fact-finding exercise by the Member in relation to the appellant’s first point.[54]
[54] ASA, [16].
As to the second point, it is also not clear whether the appellant is submitting that the Member erred by approaching this question from the point of view of the action being “unreasonable”.[55] But assuming this is so, it is patently clear he did not. He expressly acknowledged, (reasons [72]), the case law established that a finding that an employer has not proved a disciplinary action is reasonable is not a finding it is unreasonable. In the following sentence, he also recorded that “reasonableness does not require the employer’s actions with respect to discipline to be flawless”, thereby showing he was aware that “to hold the employer to a standard of perfection, not reasonableness” would be erroneous.[56]
[55] ASA, [16] and footnote 1.
[56] ASA, [16]; ASR, [6].
Otherwise, the appellant submits that “even if this [confidentiality] aspect was unreasonable … it does not, in the scheme of the facts as a whole, render what occurred unreasonable. Rather, what occurred … even if imperfect, was reasonable.”[57]
[57] ASA, [16].
The appellant submits this point “dovetails with ground 2 as to the legal aspects of the test” (of reasonableness).[58] I agree, at least, that this point substantially overlaps with Ground Two. As such, it is appropriate to deal with that point in the context of dealing with Ground Two. I say “at least”, because there is also overlap between the appellant’s first point in relation to Ground One and much of the Ground Two content. Therefore, in considering Ground Two, I will need to deal further with the confidentiality aspect.
[58] ASA, [16].
Ground One also includes a submission that the appellant’s factual case, in relation to the Member failing to find that it acted reasonably, was more detailed than the case for the respondent.[59] If this amounts to a submission that the Member erred in some way, there is little if any development of any such argument. To the extent this submission overlaps the Ground two, such will be dealt with in the disposition of Ground Two below.
[59] ASA, [14]–[15].
For the above reasons, Ground One fails. I find no error in the fact-finding exercise undertaken by the Member. His conclusions and findings were open to him on the evidence and were not illogical. While I have taken into account the appellant’s submissions about the strength of its evidence pointing towards the reasonableness of its actions, I believe, for reasons given above, that he took such matters into account, and balanced them with factors militating against the appellant’s proposition “that the [appellant] acted reasonably”.
Ground Two
Although this ground asserts error of law, the appellant “does not suggest … [the] authorities were misrepresented”.[60] In context, it appears the appellant accepts the Member correctly stated the legal principles and authorities. If I am wrong in drawing that inference, it is my opinion that he did do so. The appellant has, at least, not suggested otherwise.
[60] ASA, [17].
In Williams v Bill Williams Pty Ltd,[61] Mason JA (when on the NSW Court of Appeal) stated, at 557:
“[I]t may happen that the tribunal at first instance is confronted with the task of applying the statutory expression to primary facts in such circumstances that it is reasonably possible to arrive at different conclusions, the question being largely one of degree upon which different minds may take different views. Here, again, it is not possible to conclude that the decision appealed from is erroneous in point of law.
The principle has been enunciated that, if different conclusions are reasonably possible, the determination of which is the correct conclusion is a question of fact.”
[61] [1971] 1 NSWLR 547, 557.
The above passage was cited with approval in Vetter v Lake Macquarie City Council.[62] The majority in Vetter continued (at [27]):
“In Hope v Bathurst City Council … Mason J pointed out that when it is necessary to engage in a process of construction of the meaning of a word (or phrase) in a statute a question of law will be involved, but that the question may be a mixed one of fact and law. His Honour’s reasons make it clear that a question exclusively of law arises … if, on the facts found only one conclusion is open.”
[62] [2001] HCA 12; 202 CLR 439 (Vetter), [26].
In Vetter, Kirby J observed (at [77]) that:
“Usually, a view of the facts taken by the primary decision-maker will not amount to an error of law. It will only do so if there is no evidence to support the conclusion, if the conclusion itself or the reasoning offered to support it betray a mistaken view of the … law, or if no reasonable decision-maker could have come to that view of the facts.”
It is often difficult to differentiate between error of law and fact, or mixed law and fact. I have concerns as to whether the content of Ground Two can truly be characterised as an error of law. Nevertheless, in all the circumstances, I propose to deal with the matter on both bases below.
I accept the submission (ASA [18]) that s 11A should not be construed in favour of workers to the extent it is ambiguous. But as this submission acknowledges, there is no relevant ambiguity. For example, I can also accept that s 11A renders an injury non-compensable where the criteria within it is satisfied. But it is more to the point that the appellant employer bears the onus of demonstrating that the criteria are satisfied.
I also accept the appellant’s submission that “an employer should not fail on a s 11A case simply because some fault (appellant’s emphasis) can be found - this is to hold an employer to a standard of perfection …”.[63] But I do not accept the implied submission that such occurred in the present case. The Member specifically stated that to hold an employer to a standard of perfection was not the law. It was also not the way he dealt with the case otherwise.
[63] ASA, [16].
The Member stated that the “disciplinary action taken by the [appellant] … is the initiation of the investigations, its conduct, and the suspension …” and that the actions with respect to discipline which were causative of the injury were “the entirety of the disciplinary actions up to and including 4 June 2021”. He then stated that “the [appellant] must prove … these actions considered as a whole were reasonable”.[64] Neither party on this appeal has, at least clearly, criticised these conclusions as being in issue. In my opinion, this was a necessary and appropriate concession given the factual circumstances.
[64] Reasons, [77].
The Member carefully summarised and analysed the evidence in this regard, including for the purposes of identifying what the appellant refers to as “fault”.[65] He found the appellant’s decision to initiate the investigation and suspend the respondent on full pay reasonable.[66] He also considered the other reasonable action issues, leading to conclusions that the initiation of the investigation was reasonable, that it was logical for Ms Carpenter to be involved in the investigation, and understandable that she filled in as practice manager during the respondent’s absence on sick leave, despite the respondent believing this gave rise to a “bias”.[67]
[65] ASA, [16].
[66] Reasons, [76].
[67] Reasons [78]–[80].
This shows the Member adequately considered all the evidence relating to action with respect to discipline, including the various steps within that action. He only identified one blemish with respect to that action. But if, as appears to be the case, the appellant is submitting that the Member erred because he was of the view that the whole course of the action with respect to discipline could be deprived of a “reasonable action” characterisation simply because some or any blemish was identified, I reject such submission. This is inconsistent with him stating[68] that it was necessary “to consider the process as a whole in reaching a conclusion as to reasonableness”, immediately before his recitation of this passage from Spigelman CJ in Sinclair (at [97]):
“His Honour’s analysis … appears to assume that any specific blemish in the disciplinary process, however material in a causative sense or not, was such as to deprive the whole course of conduct of the characterisation ‘reasonable action with respect to discipline’. In my opinion, a course of conduct may still be ‘reasonable action’, even if particular steps are not. If the ‘whole or predominant cause’ was the entirety of the disciplinary process, as much of the evidence suggested and his Honour appeared to assume, his Honour did not determine whether the whole process was, notwithstanding the blemishes, ‘reasonable action’...”
[68] Reasons, [84].
The first sentence of that passage refers to an error made below (in Sinclair) on the basis of the learned judge assuming “any specific blemish” was sufficient to deprive the whole course of conduct being characterised as “reasonable action”. In these circumstances, I find it most unlikely that the Member was approaching the analysis on this basis. Immediately after reciting that passage, and noting he was “bearing this instruction in mind”, the Member then concluded “that the blanket restriction imposed by the [appellant] on the [respondent] communicating with its employees in this case is difficult to justify on the basis of principle”, particularly in the context of the allegation that the respondent breached the employer’s medicines policy being “a very serious one”, which “… could lead to the [respondent’s] dismissal from her employment with serious consequences for her career”.[69]
[69] Reasons, [85].
The Member continued[70] to conclude that the EMC doctors may have been in a position to provide evidence which may have assisted the respondent defeat or mitigate the allegations against her, and to prevent her obtaining that evidence by communicating with them severely handicapped her right to defend herself. The Member went on to find that the prohibition on the respondent communicating with the employees was intended to cover these doctors. He then found that “the infringement of such an essential right … leads to the conclusion that the [appellant] cannot prove that its actions with respect to discipline were reasonable”, and that “the right to reasonably contest an allegation … is fundamental and its restriction in this case goes to the very heart of natural justice”.
[70] Reasons, [86]–[87].
Clearly enough, the Member was determining that he was unable to be persuaded that the whole of the disciplinary process was reasonable - after having considered all the particular circumstances of the case regarding the employer’s action with respect to the confidentiality aspect; and after balancing or weighing such matters with the various factors he found to be reasonable action. That the appellant carried this onus of proof cannot be doubted.[71] While the Member may not have not expressly stated his findings in those precise terms, it is clearly implicit from his reasoning, and its context, that he was properly carrying out ‘the Sinclair instruction’ when he made his ultimate conclusions and findings.
[71] Heggie, [59(iii)].
The final sentence of his reasons (“However, the right to reasonably contest an allegation made by an employer is fundamental and its restriction in this case goes to very heart of natural justice”) is telling in this respect. The penultimate sentence is also telling, making it clear that his conclusions and findings were in the context of carefully examining all other relevant aspects of the action with respect to discipline; noting “… in many respects the investigation was conducted in an exemplary manner”.
These conclusions and findings were also reasonably open to the Member. His reasons clearly show that even though there was only one aspect of the process that was unsatisfactory, it was sufficient, given its nature and quality, to be actually unpersuaded that this aspect deprived the whole course of conduct from being characterised as “reasonable action with respect to discipline”. In my opinion, the Member’s reasons in support of that conclusion are wholly unsurprising. But at the very least, this was an evaluative judgement, and his conclusion was reasonably open to him having regard to all the evidence.
If indeed Ground Two does properly involve a question of error of law and/or mixed fact and law, it is my opinion that the Member did not misdirect himself to or misapply the stated legal principles for those reasons.
The respondent has submitted that the appellant’s actions with respect to the confidentiality aspect of the process should be classified as stronger than a “blemish”. I do not think it necessary to make a finding about that in the circumstances. The Macquarie Dictionary (third edition) defines the noun “blemish” as “a defect … disfigurement; stain”. In my opinion, it is the nature and quality of the blemish that matters. Some blemishes can be trifling, or insufficient to vitiate a state or event, but other blemishes may do so. The Member found that the blanket restriction on communicating with all employees infringed on an essential right to contest an allegation, which was “fundamental and its restriction … goes to the very heart of natural justice.”
In my opinion, it also cannot be the case that the evidence pointing the other way was so preponderant that the Member’s decision was wrong. Nor is it an illogical analysis. In my respectful opinion it is logical. The appellant’s submissions are significantly focused on a “powerful” case given the nature of it being a medical centre and “[m]isconduct of the sort here within the medical centre, was something that the [appellant] had a right, or at least a legitimate interest, in keeping confidential at least in investigative stages”.[72] The appellant also stressed it had to take a strict view on the correct obtaining and storage of medicines for regulatory and reputational damage reasons.
[72] ASA, [20].
The appellant also relies on Irwin in the context of submitting that “as a matter of fairness, it was entitled to take a very concerned view of what had been done, or even allegedly done by one of its employees”.
However, the Member noted all such matters and clearly took them into account. He also analysed the issue at a deeper level than the appellant appears to acknowledge in its submissions. This can be seen from the whole of his careful analysis of the evidence, including his acceptance that the investigation was conducted in an exemplary manner in many respects. He also accepted the confidentiality arguments from the appellant to some extent – but carefully delineated between what was acceptable in this respect and what was not; finding that the extension of the confidentiality prohibition to the doctors, given the “very serious” allegations, particularly relating to the medicines policy, was not justifiable; and it was an infringement of such an essential right that it led to the conclusion that the appellant could not prove that its actions with respect to discipline were reasonable. In its submissions, the appellant has not, at least adequately, or at the necessary depth or level the Member went to, dealt with this critically important aspect of the reasons.
I also do not accept the submission that the Member misdirected himself as to the legal principles relevant to a finding of reasonableness. I take this as a reference to two essential matters: firstly, the principles, including in Irwin, relating to his concerns about the reasonableness of the confidentiality restrictions per se; and secondly, “[t]he centrality of the confidentiality [being] a departure from the approach endorsed in Sinclair and the Member misdirected himself accordingly”,[73] and:
“Ultimately, even if the confidentiality point is resolved in the respondent’s favour … the broader context remains which is gross misconduct by the worker, and a reasonable, if imperfect, response was brought to bear by the employer when one considers the entire factual matrix. To focus only on the confidentiality issue, even if that was suboptimum, would be to hold the employer to a standard of perfection, not reasonableness”.[74]
[73] ASA, [23].
[74] ASR, [6].
I have substantial doubt that the “confidentiality point” per se, raises a question about error of law. It is rather a question of fact and a matter for the evaluative judgement of the Member. However, recognising the principle that it is often difficult to differentiate between error of fact or law and/or mixed fact and law, I am of the opinion and find that the Member did not err on either basis. The same applies to the second aspect referred to above (the alleged focus on confidentiality alone). In my opinion, the Member did not err in fact or in law in relation to the second aspect; that is, the allegation he only focused on the “confidentiality point” and/or he failed otherwise to properly apply Sinclair in making his decision; and/or, “an employer should not fail on a s 11A case simply because some fault can be found”.[75] (emphasis in original).
[75] ASA, [16].
There is no error of law or fact involved in the Member’s decision. As to the law, he did not misdirect himself as to the legal principles relevant to a finding of reasonableness. As noted earlier, he correctly stated the legal principles including, in particular, the passage of Spigelman CJ in Sinclair at [97]. He also correctly applied the relevant principles in this passage to the facts of the case before him. I also base my opinion that there is no error of fact or law on my reasons at [94]- [128] above.
To the extent it may be said that the Member has not clearly enough exposed the test he applied, it is my opinion that a fair reading of his reasons is that he did at least adequately determine the questions of whether it the employer’s actions with respect to confidentiality were appropriate or necessary, and whether the whole process was, notwithstanding the “blemish”, “reasonable action”.[76] As Sackville AJA also observed in Heggie:
“The [1998 Act] provides that the Commission needs to attach to its certificate of determination a brief statement of its reasons. The [1998 Act], s 354, also provides that proceedings are to be conducted as informally as proper consideration of the matter permits and that the rules of evidence do not apply. Having regard to these provisions, I think that a fair reading of the Arbitrator’s reasons is that he did take into account … events … but considered that they had little bearing on the issue of the reasonableness of the … actions.”[77] (emphasis in original)
[76] Rail Corporation NSW v Aravanopules [2019] NSWWCCPD 65 (Aravanopules), [104]–[105].
[77] Heggie, [166].
The appellant also submits, “the Member misdirected himself as to the legal principles relevant to a finding of reasonableness”, making the point that “the relevant enquiry is an objective one, and that the action in question is the action which is the causative factor for injury … one may look to the surrounding circumstances [but] a proposition that the employer was in some general way reasonable is not enough … Objectively, the appellant in this case was a medical practice confronted with misuse of medical supplies by its receptionist, against a background of inappropriate inter-personal behaviour…”. [78] I do not accept this submission. Firstly, the Member noted the authorities, particularly Heggie and Irwin, stating that the enquiry was an objective one.[79] Further, the appellant’s submissions do not provide any example of the Member dealing with the case in a non-objective way, including by identifying any relevant subjectivity in the analysis.
[78] ASA, [17].
[79] Reasons, [68]–[69].
The appellant continues to submit that in these circumstances, “if s 11A does not sanction a response such as the appellant’s in this case, it is difficult to conceive of the section applying on any set of facts”. I do not accept this submission either. It is beside the point of the Member’s analysis and conclusions. Again, he accepted that the initiation of the investigation (including aspects of that step, such as the reasonableness of Ms Carpenter being involved in the investigation and also filling in as practice manager during the respondent’s absence on sick leave) and the suspension, were reasonable. A substantial part of the very serious alleged misconduct put by the appellant resulted in the Member having concerns about that critically important part of the confidentiality prohibition – extending it to all employees and doctors.
This was an evaluative judgment, and the opinion expressed by the Member was open to him on the evidence, and he adequately reasoned his conclusion and findings. There was no error in the fact-finding exercise. He found that his concerns about the confidentiality prohibitions extending to the doctors were sufficiently serious to blemish the entirety of the disciplinary process to a such a degree that he was unable to that find the appellant discharged the onus it carried.
Otherwise, to the extent that there may indeed be a question of error of law, or mixed fact and law, in relation to Ground Two, I find no legal or factual error in the decision. I disagree with the submission that the Member misdirected himself as to the legal principles. In my opinion, the authorities, particularly Sinclair, Heggie and Irwin, were correctly applied. There was no other error of law or fact involved.
For all those reasons, Ground Two fails.
DECISION
The Certificate of Determination dated 23 February 2022 is confirmed.
Michael Perry
Acting Deputy President
19 January 2023
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