King v Byron Shire Council

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	King v Byron Shire Council [2022] NSWPIC 232
APPLICANT:	Robert King
RESPONDENT:	Byron Shire Council
MEMBER:	Paul Sweeney
DATE OF DECISION:	20 May 2022
CATCHWORDS:	WORKERS COMPENSATION - Claim for weekly compensation for psychiatric injury; employer denies injury and, alternatively, alleges that it was caused by reasonable acts with respect to “discipline” “performance appraisal” or “retrenchment” within section 11A of the Workers Compensation Act 1987 (1987 Act); no real contest on injury; employer alleges that “discipline” included general communication where “learning” or “instruction” were imparted to the worker by his supervisor; Kushwaha v Queanbeyan City Council considered but not followed; Held- that employer had not proven defences under section 11A of the 1987 Act; award for worker for weekly compensation during first and second entitlement periods.
DETERMINATIONS MADE:	1. The applicant suffered psychological injury arising out of and in the course of his employment namely a major depressive disorder. 2. The applicant’s employment was the main contributing factor to the contraction of the disease. 3. The deemed date of injury for the purposes of section 15 of the Workers Compensation Act 1987 (1987 Act) is 10 July 2019. 4. The respondent has not established that the applicant’s injury was wholly or predominantly caused by reasonable action taken by it with respect to retrenchment, performance appraisal or discipline within section 11A of the 1987 Act. 5. The applicant was totally incapacitated and had no residual learning capacity as a result of the injury from 10 July 2019 the end of the second entitlement period. 6. That the respondent pay the applicant weekly compensation pursuant to section 36 at the rate of $1,996.62 per week from 9 September 2019 to 6 October 2019 and at the rate of $1,681.36 per week from 7 October 2019 to the conclusion of the second entitlement period.

STATEMENT OF REASONS

BACKGROUND

Robert King (the applicant) is a longstanding employee of the Byron Shire Council (the respondent). At the time he ceased work in July 2019, he was employed as a team leader in the respondent’s maintenance unit. It is common ground that since 10 July 2019, he has suffered from a psychological condition which has rendered him unfit for work.
The applicant alleges that his psychological condition is an injury which arose out of or in the course of his employment. He attributes his psychological condition to bullying by or conflict with Mr Henry Spangler, the respondent’s works coordinator and his immediate supervisor.
By a dispute notice issued by the respondent’s workers compensation insurer, StateCover Mutual Limited on 9 September 2019, the respondent denied the applicant suffered an injury in the course of his employment. It specifically denied that the applicant had been bullied, victimised or intimidated by Mr Spangler. It stated that the applicant’s behaviour towards Mr Spangler was on occasions “inappropriate, dismissive, belligerent, aggressive, disrespectful, disengaged, unprofessional and non-responsive”. It stated:
“Employment events and factors could not have been the main contributing factor to the onset of your mental disease”.
In the alternative, the respondent alleged that the applicant’s psychological injury was wholly or predominantly caused by reasonable action taken by it within s 11A(1) of the Workers Compensation Act 1987 (the 1987 Act). There were two bases for this assertion. First, it stated that the retrenchment of two previous supervisors by the respondent was a predominant cause of the applicant’s condition. Secondly, it stated that the applicant’s condition was caused by reasonable action with respect to discipline or performance appraisal taken by Mr Spangler in the period before the applicant’s cessation of work. The acts of discipline were:
“reflected in general communications whereby learning or instruction was imparted to you by Spangler, by exercise or by repetition, and by Spangler discussing with you your performance at work and discussing the degree of efficiency with which you undertook your duties and a number of mistakes made by you in performing your duties – particularly in the context of not adhering to set budgets when retaining contractors and not meeting deadlines, not abiding by Spangler’s instructions and directions regarding work, not returning work or promptly returning Spangler’s messages and not meaningfully participating in the weekly meetings.”

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION (the Commission)

By these proceedings, the applicant claims weekly payments of compensation pursuant to ss 36 and 37 of the 1987 Act from 9 September 2019 and ongoing. He alleges that he suffers a:
“Psychological injury, being a major depressive disorder with anxiety symptoms due to workplace stressors.”
At a telephone conference on 3 February 2022, both parties sought leave to cross-examine witnesses at the arbitration hearing. The applicant sought leave to cross-examine Mr Spangler and several of the respondent’s lay witnesses. The respondent sought leave to cross-examine the applicant and several of his witnesses. I indicated that I would grant leave to the applicant to cross-examine Mr Spangler and to the respondent to cross-examine the applicant. I was not persuaded that cross-examination of the other witnesses would materially advance the case of either party. However, I reserved a final ruling on the matter to the arbitration hearing.
When the matter came on for conciliation and arbitration hearing on 28 March 2022, Mr Hickey, of counsel, appeared for the applicant and Mr Hanrahan, of counsel, appeared for the respondent. I was informed by counsel that the parties were unable to reach a mutually satisfactory settlement of the threshold issue of whether the applicant suffered a psychological injury and, if so, whether it was wholly or predominantly caused by reasonable action taken by the respondent with respect to discipline or retrenchment. I am satisfied that the parties, who were represented by experienced lawyers, had ample opportunity to reach a settlement of the matter over the last several years including the two occasions on which the matter was listed for telephone conference.
Two significant interlocutory matters arose at the arbitration hearing. First, the applicant had been examined by two psychiatrists on behalf of the respondent. Dr Bradley Ng had provided a series of reports arising out of his consultation with the applicant. However, for reasons that were not fully ventilated Dr Ng refused to see the applicant for the purpose of providing a supplementary medical report. This had nothing to do with the applicant. Rather, the doctor was unwilling to provide further reports to the respondent.
Consequently, the respondent arranged an appointment with Dr Samuel Roberts, a psychiatrist, who saw the applicant audio visually on 16 March 2022 and provided a medical report dated 23 March 2022. The applicant objected to the respondent relying on two forensic medical reports in breach of cl 44 of the Workers Compensation Regulations 2016.
As the respondent had a comprehensive medical opinion from Dr Roberts, which addressed all of the issues in dispute, I saw no basis to also admit into evidence the opinion of Dr Ng. I ruled that Dr Ng’s history could be admitted into evidence. However, his clinical findings and opinion should be excluded as they breached cl 44.
While he pressed the application to cross-examine Mr Spangler, Mr Hickey did not seek to cross-examine other witnesses. While Mr Hanrahan initially indicated that he would be content to cross-examine the applicant, he was ultimately instructed to seek to cross-examine two other witnesses. As it transpired the only other witness to give oral evidence was Bradley Hope who was called in the applicant’s case.
The oral evidence in the matter occupied the entirety of the time allocated for the arbitration hearing. At the conclusion of the oral evidence, I directed that both parties lodge written submissions. Those submissions have now been received.

DOCUMENTARY EVIDENCE

The following documents have been admitted into evidence in these proceedings:
(a)    the Application to Resolve a Dispute and the documents attached;
(b)    the Reply and the documents attached;
(c)    Application to Admit Late Documents dated 21 March 2022;
(d)    Application to Admit Late Documents dated 4 April 2022 lodged by the respondent, and
(e)    Application to Admit Late Documents of 4 April 2022 lodged by the applicant.
At the conclusion of the arbitration hearing, the respondent expressed concern as to the admission of the written evidence of Mr Mark Gapps. Accordingly, I directed that the applicant lodge evidence relevant to the availability of Mr Gapps, including a medical certificate relating to his unavailability to give evidence by an Application to Admit Late Documents. I also gave both parties leave to address the issue of whether Mr Gapps written evidence should be received by the Commission in their written submissions dealing with the substantive issues in dispute. Other than suggesting that Mr Gapps written evidence should not be accepted, the respondent did not pursue the issue in its written submissions.

MEDICAL EVIDENCE

There is a large volume of medical evidence before the Commission. However, given the issues in dispute and the way in which the case was argued by the parties it is unnecessary to engage in a comprehensive survey of the evidence.
The applicant has been treated by Dr Ross Simpson, a general practitioner since 18 July 2019. He certified the applicant at that time as suffering from an Adjustment Disorder with Mixed Anxiety and Depressed Mood as a result of his relationship with Mr Spangler.
Dr Simpson referred the applicant to Mr Loughnan, a psychologist who continued to treat him for many months and to Dr Siefken, psychiatrist, who diagnosed a major depressive disorder with associated anxiety features which he treated with anti-depressants.
Dr Ng provided a report to the respondent on 13 August 2019 in which he took a comprehensive history of the applicant’s experience in the workplace. He provided a supplementary report of 27 September 2019 in which he reviewed a good deal of the respondent’s lay evidence. His opinion, however, is excluded from the evidence in the matter.
Dr Roberts, saw the applicant on 16 March and prepared a report of 30 pages. He had before him the reports of each side’s lay evidence. Dr Roberts expressed the following opinion in relation to diagnosis and causation:
“The history with respect to psychiatric symptomatology presented by Mr King and consistently documented by his treating psychiatrist, psychologist and other psychiatrists who have assessed him for the workers compensation claim, reflect the advent of prominent depressive symptomatology and anxiety which, after two years of consistent symptomatology supports the conclusion that he is suffering a persistent depressive disorder with persistent depressive episode and with anxious distress. A prominent inconsistency is the approach to treatment which suggests that Mr King’s treating psychiatrist considers him much less unwell than his presentation at interview on 16 March 2022 would suggest. Namely, an experienced specialist consultant psychiatrist would only maintain an unchanged pharmacological regime for almost two years it is his belief that the symptoms had optimally improved. A lack of satisfactory response after 2 to 3 months would typically lead to revision of the medication and a course so protracted, as that prescribed by Mr King, in particular with the degree of disability associated with it, would typically lead to consideration of hospital admission and consideration of electro-convulsive therapy (ECT). Even in the context of financial constraints including a private hospital admission, a condition of such severity as to necessitate 24-hour observation by family members on a background of past intent to self-harm, recurrent vomiting and ongoing significant weight loss, a referral to a public psychiatric in-patient facility would usually occur. Given the apparent discrepancy highlighted by the approach to treatment, consideration of formal psychometric evaluation is warranted to confirm the severity of Mr King’s condition.”
Despite his reservation as to the severity of the applicant’s condition, he expressed the opinion that:
“The current episode has arisen as an effect of circumstances in the workplace.”
Further, he did not support the conclusion that the retrenchment of “several colleagues” (Mr Wallace and Mr Gapps) were relevant to the causation of his psychiatric diagnosis. Nor did he think that any “pre-existing diagnosis” was relevant.
The respondent specifically addressed the issue of Mr Spangler’s relationship with the applicant in its letter of instructions to Dr Roberts. It requested that he consider the statements of counsel’s witnesses and express an opinion whether the applicant’s psychological disorder was “wholly or predominantly caused by” action taken by the respondent with respect to discipline or, oddly, performance appraisal. The doctor responded by stating:
“As discussed under the sub-heading ‘Summary and Opinion’ there is information to support discipline and performance appraisal as the whole factor in the causation of the diagnosed condition. This would rely on the confident exclusion of personally denigrating behaviour directed at Mr King by Mr Spangler.”
Finally, Dr Roberts expressed the opinion that if the applicant’s account was accepted, he was totally incapacitated for work for the foreseeable future.
While Dr Roberts had reservations as to the extent of the applicant’s ongoing symptomatology, he joins the other medical practitioners in the applicant’s medical case who express the opinion that the applicant has sustained a recognisable psychiatric injury as a result of events which occurred in the course of his employment.
Further, he does not accept that the psychiatric injury results from the retrenchment or dismissal of the applicant’s colleagues by the respondent as alleged in StateCover’s dispute notice. There is, therefore, no acceptable evidence before the Commission that the applicant’s injury was caused by these actions and I do not propose to consider this issue at the length in these short reasons.
The issue posed by Dr Roberts is whether the actions of Mr Spangler can be brought within the concept of reasonable action by the respondent in respect of discipline. He says this:
“Whether the personally offensive behaviour occurred or not is a matter to be determined on factual investigation but one that may prove relevant in determining whether Section 11A of the Workers Compensation Act applies. If it is accepted that statements regarding his workplace performance are accurate and there was an absence of personally offensive language, then Mr Spangler’s response to him was an inevitability of Mr King’s own making. Namely, it is the obligation of a supervisor to comment on inappropriate workplace practices of those working under him and to override decisions and approaches at work if he is of the belief that there is a better method with which to address a particular task. If Mr Spangler resorted to yelling atMr King and using personally denigratory language, this would be considered to fall outside the scope of a manager engaging in discipline or performance appraisal.”
I doubt that Dr Roberts formulation of the law in respect of s 11A is entirely accurate. I will return to this after adumbrating the quite extensive case law dealing with s11A. While I find it difficult to explain the progression of the applicant’s symptomatology more than two years after he ceased to be exposed to the alleged stressors, on the basis of Dr Roberts evidence there is no real contest that his psychological condition was caused by his employment.

SUBMISSIONS

The submissions of the parties are in writing and I do not propose to refer to each of the arguments of counsel in these short reasons.
Mr Hanrahan spent some time analysing the affirmation that I administered to the worker at the commencement of his oral evidence. He submitted that it was an:
“available impression that the oath offered was neither expressly sincere nor made with any confidence of the requirements of the applicant’s promise to tell the truth. It is also inconsistent with his belief and the giving of an affirmation, in preference to an oath to God that the applicant be offended by hearing the phrase ‘God damn’ in his work environment.”
I concede that I might have muffed my lines in administering the oath. However, I was not left with the impression that the applicant deliberately or accidentally omitted words from the oath or that one should draw any conclusion adverse to the applicant’s credibility from the process. It is an extremely flimsy basis on which to commence a credibility argument. I do not propose to accept it. Mr Hanrahan continues thus:
“The stage was thus set for an unconvincing personal attack on Hank Spangler, in a purported justification of the worker’s exasperating poor work practices, observed over a two year period and met initially with patience and ultimately with the justifiable ire of his manager. The worker’s ill-feeling towards his manager was documented on the advice of co-workers who have not provided any statement in support of the worker in these proceedings. It is submitted that the manager acted in a way which could readily be described by a fair observer to be objective and therefore reasonable considering all the circumstances.”
Mr Hanrahan referred to the applicant’s work diary and argued that it “merely seeks to justify” his resistance to direction, insubordination, and trivialisation of the needs identified by his manager to be more cooperative. He submitted that the applicant’s purported reference to his aboriginality was “a convenient recent invention”.
A term allegedly used by Mr Spangler “Aussie boys” was a “quite opaque descriptor” that suggested an age or gender-related allegation rather than “any difference related to nationality”. An allegation that Mr Spangler was intimidating the worker and “just talking down to me” was inconsistent with Mr Spangler’s demeanour and oral evidence.
The applicant was “wilfully blind to his employer’s legitimate management concerns”. He quit following the email of 3 July 2019 from Mr Spangler “rather than acknowledging any need for improvement of his performance”. He demonstrated no respect for “budgetary responsibility”.
Mr Hanrahan also submitted that the applicant had “no explanation for apparent anomalies in the diary entries of 14 June 2018” He was unable to explain how an entry on 14 June 2018 referenced an event which occurred four days later on 18 July 2018. It was submitted that the only possible explanation for the alteration of the document was to:
“list transgressions he perceived were perpetrated by a manager in order to have evidence capable of discrediting him.”
Mr Hanrahan submitted that the oral evidence of Mr Hope and the written evidence of Mr Gapps would be rejected. Conversely, the oral evidence of Mr Spangler should be accepted. He then submitted that “performance management” was the predominant issue arising in this case. He argued:
“The meetings, emails and other documents generated around this issue seek to address legitimate complaints of the Council with the worker in a respectful way, however they are met with denials and a failure of the worker to address all relevant issues in an open and transparent way.”
After referring to the reasoning of Judge Geraghty in Irwin v the Department of Education Director-General of School Education (unreported, 18 June 1998) (Irwin), he submitted that the worker’s behaviour “demanded that the respondent take action in the interests of proper budgetary management”. A broad view of the whole process of performance appraisal/discipline should be taken, including the final meeting following which the applicant ceased work.

Mr Hanrahan argued that the documentary evidence from “multiple witnesses” suggested that the respondent acted in a “respectful and diplomatic manner” towards the applicant notwithstanding his “extensive history of provocation and previous perceived delinquency”. Though the applicant attempted to give the impression that he did “everything” required of him, “his actions spoke otherwise”.
Mr Hickey characterised the dispute that was phrased by the respondent as going to two matters:
(a) were the events that gave rise to the applicant’s psychological injury “real events”, and
(b) if so, was the psychological injury (i) wholly or predominantly caused by (ii) the reasonable actions of the respondent with respect to (iii) performance appraisal and/or (iv) discipline.
In respect of these issues, Mr Hickey referred to the assessment of Dr Roberts that “an objective assessment of the available information reflects a poor working relationship between Mr King and Mr Spangler”.
Dr Roberts had concluded that it would be expected that these circumstances would have caused “significant frustration to both parties”. It followed that Dr Roberts supported the proposition that the applicant had sustained psychological injury in the course of his employment.
While Dr Roberts had accepted that much of Mr Spangler’s behaviour fell within the rubric of performance appraisal or discipline, the respondent had not attempted to identify precisely what events are relied upon and how such events constitute “performance appraisal” or “discipline”.
Mr Hickey addressed aspects of the evidence which may go to establish the occurrence of a psychological injury as a result of real events. He referred to the evidence that the applicant commenced to diarise his interaction with Mr Spangler at the suggestion of Ms Raglus and to Ms Raglus confirming evidence of the applicant in this regard. He also referred to the fact that the applicant raised a complaint with the respondent’s human resources department in February 2019 in respect of Mr Spangler and the absence of any evidence being adduced from the respondent’s human resources officer, Ms Conley, to refute this evidence.
Mr Hickey referred to the evidence of Mr Henderson, Ms Raglus and Mr Hope that they had heard Mr Spangler “yelling”, “swearing” or using offensive terms such as “wetbacks” in his communications with the applicant. Conversely, there was no evidence from human resources or documentary evidence to support Mr Spangler’s assertion that he had “liaised” with people and culture about the claim.
Mr Hickey also attacked Mr Spangler’s evidence that he was “highly surprised” by the applicant’s allegation that he yelled at him in the meeting of 2 July 2019. He conceded that he had heard that assertion “many times” before. These two responses were inconsistent. Similarly aspects of his oral evidence were at odds with his written evidence and he was “careful to craft his answers” in response to direct questions particularly in respect of the meeting of 2 July 2019 and the meaning of the term “wetback”.
Mr Hickey submitted that the Commission:
“would treat Mr Spangler’s evidence with caution and prefer the evidence of the plaintiff where the two contradict, particularly given the evidentiary support from co-workers and diary entries.”
Mr Hickey noted that the respondent had not adduced any evidence of its policies and procedures or any evidence of any formal warning being given to the applicant in respect of misconduct. No formal process was in place and no “planned approach to a consideration of work duties was highlighted”. There was no indication or warning given to the applicant that the meeting of 2 July 2019 was to be disciplinary in nature. Thus, the respondent’s case pursuant to s 11A must fail.
As the reliability of the evidence of Mr Spangler and the applicant was raised by counsel in their submissions, it is necessary to briefly review the extensive written evidence of both witnesses. I stress that what follows is not a comprehensive survey of all of their evidence. Rather, I set out the salient points, so that the conclusions I have reached on the issues in the case can be readily understood. As the respondent has the onus on the s 11A issue. I propose to confine the review to Mr Spangler’s initial, which statement is dated 4 September 2019, and to the first two written statements of the applicant.
By that statement, Mr Spangler records that he has been the respondent’s work’s coordinator for the last 18 months and that the applicant, who is employed as a team leader, reports directly to him. He describes the applicant’s duties as:
“delegating works to supervisors and leading hands with his main role being organising crews for maintenance and ensuring those maintenance works are completed”.
Mr Spangler recounts an event which took place two years ago when the council were “completing some flood damage recovery works”. He states, contrary to his instructions, the applicant contracted to complete works that “were outside of our funds limitations”. It became necessary for him to “pull money from other than our maintenance fund” to cover the cost of the work. He describes the applicant’s behaviour as “negligent”. He continues that following this event:
“I instructed him to cease instructing the contractors as this was not the only example … by this stage, we had spent about 20% of the …. Yearly budget and we were only 2.7% into the spending year”.
At that time, the applicant and Mr Spangler reported directly to Tony Nash, who has subsequently passed away. Mr Spangler states that he “raised the issue with Mr Nash”. He recounts that, following this incident, he “felt there was resistance from Robert” towards him and their working relationship appeared to change. He states that he could not get him to understand that his instructions to the contractors had exceeded the budget which “I am ultimately responsible for”.
Mr Spangler recounts that there was another occasion in April 2018, after he acceded to the position of work’s director where a job which had an “agreed 5-day duration period” took three weeks. He states that this involved an “over commitment” on the part of the applicant.
There was also an occasion when he engaged a contractor for a difficult footpath project rather than use the applicant’s team. Mr Spangler states that the applicant was not assigned to this project so that they could “get into the project and complete it within the deadline”. He states that he wrote an email to the applicant at the time stating that he had “engaged a contractor so as to avoid setting up his crew for failure”. He states that he also stated that:
“I would never want to jeopardise Robert’s reputation with his crew.”
Mr Spangler says that the applicant was quite bitter towards him as a result of the decision to engage a contractor instead of his crew. He records that the applicant was “strongly opposed to Council engaging contractors to execute Council works”.
Then, Mr Spangler recounts a telephone call in which the applicant said:
“I don’t know if I should tell you this Hank. I am afraid that you might yell at me.”
He states that around this time the Director had given the applicant instructions to “fix something”. The applicant proceeded to go to the site and fix it rather than organising for someone else to do this. Mr Spangler says that he told the applicant that he didn’t need him out there “on the tools”. While the applicant liked working on site, Mr Spangler conceived that “his role was to delegate the works” and to ensure the work was done. He records that the applicant had a “hard time” not being on site with his crew.
Mr Spangler then recounts an issue where he clashed with the applicant over the completion of a pit that he had been told would take a day to complete. The applicant responded that they were working on the pit 2 hours a day for 5 days and that’s “1 day”. There was a discussion about whether the time for the completion of works should be addressed in days or hours. Mr Spangler states that the applicant spoke in an aggressive manner during the conversation. He said that he felt that “I did not treat his crew right and that he felt his team’s morale was low”. He says that they shook hands at the end of the discussion and agreed to move on.
Mr Spangler also discusses a restructure in 2018 which resulted in the retrenchment of some workers. He says that:
“It appears that Robert’s crew viewed me as the face of the restructure and it appeared that I became associated with anything related to that restructure. I also believe that Robert is of the belief that I was trying to get rid of some of his supervisors.”
He says that during the period of the restructure through to January 2019 he felt that the applicant was “actively disengaged”. He says that he observed him to:
“act inappropriately during meetings and appeared to intentionally be difficult in our weekly team meetings”.
He states that there was no collaborative approach or any flexibility in respect of their projects and the applicant was intentionally adversarial on a consistent basis.
Mr Spangler says that as part of the restructure the applicant would “no longer be reporting to me as of 2 September 2019”. Then, he recounts several occasions on which the applicant resisted his instructions. He says that about this time he discussed the applicant’s “negativity and resistance towards me” with people and culture. He also says that he discussed with them “continually experiencing issues with Robert working on the tools out on site rather than doing his own job”.
Mr Spangler recounts an incident on 22 January 2019 when the applicant described the principal of a contractor in derogatory language. During the discussion, Mr Spangler says that the applicant raised his voice and said to him:
“That is a fuckin lie mate. You are a fuckin liar mate.”
He says that the applicant was pointing at him and acting aggressively at the time. He accused Mr Spangler of harassment and said that he was “out of here … sick leave”. He says that the applicant was off work for about a week after this incident. However on his return to work he stated that he wanted to apologise and whether they could “do lunch to talk about this”. Mr Spangler declined the invitation.
From mid-2018, the applicant displayed intentional negativity and resistance during weekly meetings, challenged directions, and instructions that he was given and would not provide “a straight answer to requests for updates on projects”. Following a discussion about the time at which the new work’s coordinator would replace him, Mr Spangler said to the applicant that they needed to talk “about the last two years and how we can move forward”. It was agreed that they meet at 2.30pm in the afternoon. Mr Spangler attended with Katrina Blewitt. He says that:
“The purpose of the meeting was to check on Robert and speak to him and explain to him that we understood that the restructure had affected him. We spoke about some of the issues that Robert felt he was experiencing in the workplace. I expressed some of the concerns I had with Robert in the workplace including his behaviour in our weekly meetings, his general communication and behaviour towards me, as well as Robert not responding to, or taking a long time to respond to, emails and text messages that I would send him.”
During the meeting there was also some discussion as to past difficulties. Mr Spangler commented that:
“We used to be mates”
And the applicant replied to the effect of:
“So we are not mates any more?”
He says that they shook hands and agreed to move forward.
However, later in the afternoon there was an exchange of emails. The applicant said in his email that he did not agree with Mr Spangler’s email summarising the outcome of the meeting. Mr Spangler says the applicant sent an email to the “people and culture team advising them that he wished to follow through with his allegations against me.”
Mr Spangler emphatically denies ever bullying the applicant or any other employees. He continues:
“It was clear to me that there was a shift in Robert’s general attitude towards me as a result of the restructure. I believe it was ultimately Robert’s decision to openly go against management decisions as part of the restructure. I believe that Robert did not want to be seen to be siding with management, rather than being one of the boys. I believed he preferred to be seen as siding with employees he had worked with then for about 25 years.”
Mr Spangler also says that he was painted as a “puppet master for the restructure”. He says that he accepts that there were “issues between Robert and me and our communication became difficult”. He says he made a number of attempts to meet with the applicant to address his concerns so that we could “move forward”.

THE APPLICANT

There are seven statements from the applicant commencing with a signed statement of 13 January 2020 and concluding with a signed statement of 20 October 2021. Unfortunately, none of those statements contain a cohesive chronological account of his relationship with Mr Spangler or the development of his psychological condition.
By his initial statement, he states that he would see Mr Spangler on a daily basis and “thought we had an adequate working relationship”. He does recall however that Mr Spangler took exception to his use of his Christian name “Henry” and recalls multiple occasions when he “banged on the desk” at weekly Tuesday meetings.
This statement is primarily concerned with the meeting of 5 July 2019. He states that he was “pretty busy” at the time and it wasn’t clear what the purpose of the meeting was. His impression of the email was that it “referred to going over the issues that occurred over the last 2 years”. Accordingly, he did not think that it was important. He records that Mr Spangler seemed to be saying at the meeting that if a job was “going to fail, let it fail”. He also states that he referred to him as “only an Aussie boy” which he found quite demeaning.
The applicant says that Mr Spangler gave him directions in respect of the removal of slabs on a job that they were presently undertaking which he believed were impractical. He also directed him to change his working arrangements by coming back to the depot each evening at the conclusion of the shift. He thought this would cause “more driving and delay”. He also thought that the “amount of work I get done on any given day would have to be reduced”.
He records that Mr Spangler told him that he wanted “more input from me” at our Tuesday meetings. The applicant thought that this was “a very strange idea”. He states that none of the meetings involved criticism of the work that he was doing, they were “reporting and planning meetings”. He states that Mr Spangler “didn’t make it clear in this discussion how I was meant to give input”.
By a supplementary statement of 7 August 2020, the applicant addressed the evidence of the respondent’s witnesses including the initial statement of Mr Spangler which I have summarised above.
The applicant refers to the allegation of over-spending storm damage funding on Mafeking Road. He says that he performed the work under his former supervisor Tony Nash “who gave him the go ahead” to complete the work. He says that Mr Spangler had “nothing to do with storm damage”. He says that at a meeting on 7 July 2017 he was “sworn at and mimicked while Hank was slamming the desk with his hands”.
The applicant says that Mr Spangler was “angry, yelling and belittling” him on other occasions including when he “returned gravel road maintenance to Hank”. He states that Mr Spangler is raising an issue that goes back to 2017. He states:
“I had not worked with Hank before, who brought this issue up. I was not aware of his aggressive standover style. I felt uncomfortable around him. He was not the maintenance engineer and was not responsible for clients’ quality or specifications. For maintenance I worked with engineers from the Mullumbimby office and I worked under Tony Nash and managed all aspects of the maintenance.”
According to the applicant, Mr Spangler:
“continued to be abusive towards me. This was witnessed from time to time by other workers. This abuse would happen in the depot or in the office or on the phone or on work sites.”
Contrary to Mr Spangler’s view that jobs would be costed in days, the applicant says that he “always talked about an hourly rate and hours to be completed not days. Days is too broad and non-specific.” He states that he has “never been spoken to about negligent spending and I have never overspent the yearly maintenance budget.”
In respect of the allegation that he reacted adversely to the restructuring he states that “the restructuring was good in a very broad sense as everyone below my grade received a pay rise.” He says that the unsuccessful supervisors received generous redundancy packages. He says that he certainly wasn’t trying to make out “that Hank was the source of the restructuring.”
The applicant says that by 2019 he was becoming withdrawn, lacking in confidence, suffering anxiety, and losing weight as well as vomiting and not sleeping. He says of Mr Spangler:
“I was avoiding him as much as possible and didn’t want to meet with him. The restructure wasn’t an issue. It was Hank’s behaviour. I told Hank I was suffering anxiety because of the way he was treating me and I didn’t want to meet with him. His behaviour didn’t change.”
The supplementary statements of both witnesses involve repeated assertions that their version of their interaction from time to time is correct and that the other is not telling the truth. It is difficult for a reader without knowledge of the respondent’s modus operandi to reach any firm conclusion in respect of many of these matters.

DISCUSSION AND FINDINGS

Both parties relied on matters pertaining to credit in their submissions. A reading of the transcript of the evidence of the applicant and Mr Spangler confirms the distinct impression I had at the time that despite some imperfections in their evidence both witnesses answered questions honestly. Both endeavoured to assist the Commission in resolving the issues in dispute.
I reject Mr Hanrahan’s submission that the applicant should not be believed because of the way in which he gave his affirmation. Similarly, I do not believe that the asserted discrepancy in the applicant’s diary undermines his reliability. Undoubtedly, he was recording matters for the purpose of establishing that he was bullied by Mr Spangler. But that does not lead to the conclusion that his entries are unreliable.
Mr Spangler gave careful and thoughtful evidence. He made appropriate concessions. I do not believe there is a proper basis to reject his evidence. While his evidence is not an objective account of all that occurred prior to the 10 July 2019, by and large I accept it. I prefer his evidence to that of the applicant and Mr Hope’s in respect of the use of the word “wetback”. I am not persuaded that he used the words “wet backs “in reference to the respondent’s workers. If he use the word , I am not persuaded that he used it maliciously.
At the same time, it is readily apparent that the two witnesses had dramatically different perceptions of incidents which had occurred in the course of their employment and the nature of their relationship over during 2018 and 2019. It is probably unnecessary to completely unravel the reasons for the discrepancies in their evidence. However, I will return to this aspect of the case when resolving the issues in dispute.
The evidence taken as a whole certainly supports Dr Roberts conclusion that “an objective assessment of the available information reflects a poor working relationship between Mr King and Mr Spangler”. It is unnecessary to go further than the evidence of these two witnesses to reach this conclusion.
However, the evidence of other employees also affirms it. Geoff Bailey, the respondent’s safety officer, recalls an incident in 2019 in the applicant’s office when he overheard a discussion between the two. He heard the applicant say to Mr Spangler:
“Are you calling me a liar?”
and Mr Spangler saying to the applicant:
“Are you calling me a liar?”

Mr Bailey describes the level of the voices as “equal at the time”. They were not shouting but it was clear that it was a “heated discussion”. Several of the applicant’s witnesses refer to “raised voices” when the two men were discussing work issues. Warren Hubbard, Brad Hope and Matthew Henderson all attest to this. While it is true that Ms Blewitt and Ms Mackay state that they did not witness Mr Spangler raise his voice in meetings the applicant, the fact that they did not see it does not undermine the evidence of the other witnesses.
There is, therefore, ample lay evidence to underpin the unanimous medical opinion that the applicant suffered a psychological injury arising out of and in the course of his employment by reason of interpersonal conflict with the Mr Spangler prior to 10 July 2019. I propose to make such a finding. I then turn to the s 11A defence.
The exposition of the law relating to s 11A (1) in Northern New South Wales Local HealthNetwork v Heggie [2013] NSWCA 255 (Heggie) provides a useful starting point for any decision involving the section. In that case, Sackville AJA said this at [59]:
“The following propositions are consistent both with the statutory language and the authorities that have construed s 11A(1) of the WC Act:
(i) A broad view is to be taken of the expression ‘action with respect to discipline’. It is capable of extending to the entire process involved in disciplinary action, including the course of an investigation.
(ii) Nonetheless, for s 11A (1) to apply, the psychological injury must be wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer.
(iii) An employer bears the burden of proving that the action with respect to discipline was reasonable.
(iv) The test of reasonableness is objective. It is not enough that the employer believed in good faith that the action with respect to discipline that caused psychological injury was reasonable. Nor is it necessarily enough that the employer believed that it was compelled to act as it did in the interests of discipline.
(v) Where the psychological injury sustained by the worker is wholly or predominantly caused by action with respect to discipline taken by the employer, it is the reasonableness of that action that must be assessed. Thus, for example, if an employee is suspended on full pay and suspension causes the relevant psychological injury, it is the reasonableness of the suspension that must be assessed, not the reasonableness of other disciplinary action taken by the employer that is not causally related to the psychological injury.
(vi) The assessment of reasonableness should take into account the rights of the employee, but the extent to which these rights are to be given weight in a particular case depends on the circumstances.
(vii) If an Arbitrator does not apply a wrong test, his or her decision that an action with respect to discipline is or is not reasonable is one of fact.”
The concept of reasonableness in s 11A is not clearly defined in the case law. In Commissioner of Police v Minahan [2003] NSWCA (24 September 2003), the Court of Appeal referred to decisions of the Compensation Court relied upon by Walker J, at first instance, without suggesting that they were erroneous. In Irwin Geraghty J, stated:
“The question of reasonableness is one of fact, weighing all the relevant evidence. The test is less demanding than the test of necessity, but more demanding than a test of convenience. The test of “reasonableness” is objective and must weigh the rights of employees against the objective of the employer. Whether an action is reasonable should be attended, in all the circumstances by a question of fairness.”
Then, in Ivanisevic v Laudet Pty Ltd (unreported, 24 November 1998), Truss J, stated:
“In my view when considering the concept of reasonable action the Court is required to have regard not only to the end result but to the manner in which it was effected”.
The judgment in 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: c.f. Pirie v Franklins Ltd [2001] NSWCC 167 (10 September 2001). I see no reason why this is not such a case as the applicant was employed by the respondent for 28 years and occupied a senior role in the maintenance area.
The case law also establishes that a finding that an employer has not proven that a disciplinary action is reasonable is not a finding that it is unreasonable. But reasonableness does not require the employer’s actions in respect of discipline to be flawless.
In Irwin, Judge Geraghty referred to the performance appraisal as being something like an examination. That is something that occurs over a relatively short period of time. By contrast a performance improvement plan may persist over weeks, and training months and years.
In Dunn v Department of Education and Training (2000) 19 NSWCCR 475, after referring to his earlier decision in Irwin, Geraghty CCJ concluded that an enhancement program to which a teacher was subjected for well over a year did not fall within the phrase “performance appraisal”. In Bottle v Wieland Consumables Pty Ltd (1999) 19 NSWCCR 135, Nielson CC J followed the reasoning of Geraghty J. He expressed the opinion that the phrase “performance appraisal” was equivalent to a process of putting a monetary value on work. These cases are well-known and have been applied by members and the presidential unit of the Commission repeatedly.
In Chisholm v Thakral Finance Pty Ltd t/as Novatel Brighton Beach [2011] NSWWCCPD 39 (2 August 2011) at [159], Roche DP criticised an arbitrator for substituting the term “performance management” for “performance appraisal”. He stated that the former term is “not in s 11A and the Arbitrator erred in referring to it.”
To the above I add that I do not accept that instruction in the performance of work without more will ordinarily constitute “discipline” as that word is used in s 11A. In Kushwaha v Queanbeyan City Council [2002] NSWCC 25 (25 March 2002), Judge Neilson in the former Compensation Court, after considering the definitions in the Shorter Oxford English Dictionary 3 ed and the Macquarie Dictionary 3 ed, said this:
“It can be seen, therefore, that the primary meaning of “discipline” is learning or instruction imparted to the learner and the maintenance of that learning by training, by exercise or repetition. The narrow meaning of punishment, chastisement is secondary to the primary meaning although this word is often used in the sense in popular speech. It is the narrow meaning which weighed on my mind in Bottle’s case. However the word used in an Act of Parliament must be given its full meaning unless the context otherwise requires. Such a context does not appear to me to be called for in the interpretation of s 11A(1).”
In my opinion, the context does require that the narrow meaning be given to the word. “discipline”. It appears in a section that refers to seven different actions of an employer which occur during the contract of employment. Each of the actions, other than “discipline”, occur at a particular time in the course of the contract. It is, therefore, difficult to envisage that the word “discipline” by way of exception constitutes a process that takes place on a daily basis over the entirety of the contract of employment as a supervisor instructs his staff in the management of their day to day work.
Rather, in keeping with the other words and phrases used in the section, it is more likely that “discipline” involves an element of chastisement and that it occurs at a particular time or times in the employer/employee relationship. It is plausible that the necessity to give repeated instruction may be an action with respect to discipline. Repeated instruction may be necessary by reason of a worker’s refusal to accept or to comply with initial instruction. In such a case, repeated instruction involves an element of chastisement. However, the day to day imparting of knowledge does not involve chastisement and does not involve an action with respect to discipline.
As I indicated above, the respondent’s medical evidence does not suggest that the retrenchment of Mr Gapps and Mr Wallace in 2018 was causative of the applicant’s psychological injury. While the applicant concedes that that these men were supervisors who worked under him for long periods, he explicitly denies that their retrenchment influenced his psychological state. In fact, he states that they were compensated for losing their positions by appropriate redundancy payments.
Mr Spangler and Ms Mackay assert that the retrenchment of his supervisors caused the applicant to be “unhappy”. Ms Armstrong, on the other hand, records in her statement that he told her in March 2019 the retrenchment issue was “all sorted now” and he wanted to move on”.
While I accept that it may be a factor which influenced the applicant’s ambivalent, but generally poor, opinion of Mr Spangler, that the retrenchment was the whole or predominant cause of his psychological injury, either by itself, or in combination with other actions of the respondent which fall within s 11A, is not a plausible conclusion. The respondent has not proven the necessary causal connection to succeed on this aspect of its defence.
Similarly, it is not possible to bring the interaction between the applicant and Mr Spangler before 10 July 2019 within the phrase “performance appraisal”. There is neither oral evidence nor documentation to support a conclusion that Mr Spangler was engaged in conducting a performance appraisal process with respect to the applicant at any time during their relationship. Certainly, none that would even remotely fall within the oft quoted formulation in Irwin that performance appraisal involved “something like an examination”.
Mr Hanrahan submitted that “the performance management” was at the heart of the disagreement between the applicant and Mr Spangler. But as the case law above emphasises s 11A does not refer to “performance management”. While it is possible that some aspects of performance management may fall within “performance appraisal”, it was not put at the hearing that any particular aspect of the evidence was consistent with performance appraisal.
Patently, there are difficulties in establishing this. There is no satisfactory evidence that the meeting in July 2009 between the two men was for the purpose of performance appraisal. Mr Spangler described the meeting thus:
“The purpose of the meeting was to check on Robert and speak to him and explain to him that we understood that the restructure had affected him.”
It is true that this sentence does not adequately reflect the meaning of the entire paragraph to which it belongs. However, it does emphasise that there was no intention that the meeting was for a purpose that in any way related to “performance appraisal”.
At the time the meeting was convened, Mr Spangler was only weeks away from ceasing to be the applicant’s supervisor. The evidence establishes that the applicant would no longer report to him. Thus, it was an odd time to embark on a process of performance appraisal. Equally, the applicant’s reaction is not explicable on a logical or rational basis. One might have thought that he would bide his time and wait for the arrival of a new supervisor. But the onset of the psychiatric symptoms cannot always be explained by reference to reason or logic.
It is difficult to ignore the evidence from the respondent’s witnesses that the applicant behaved inappropriately towards Mr Spangler consistently over the last few years of his employment. Mr Buckley describes the applicant’s behaviour at weekly team meetings as “highly inappropriate”. He says that he was “being obviously difficult towards Hank”.
This evidence is corroborated by Mr Bailey who recounts that the applicant sought his “approval or support” against Hank. He said to him that Mr Spangler “drives us too hard” or “doesn’t support us” or “calls us Aussie boys”. On the other hand, he says that he has never heard Mr Spangler make a derogatory comment about the applicant or use the term “Aussie boy”. Mr Bailey says that during a meeting the applicant “snapped at” Mr Spangler and was “looking down and shuffling papers in an agitated manner”. He adds that:
“From my own observations of Robert over the past 3 years, I found that he has struggled with managing his team, or has had difficulty in enforcing management decisions, such as the implementation of safe work practices with his crew.”
Mr Bailey says that he is more inclined to work on the tools rather than addressing “any gaps in his crew”.
Ms Mackay and Mr Buckley also give evidence that the applicant behaved inappropriately or in an “offhand manner” at the weekly meetings. Mr Roche refers to the applicant speaking to Mr Spangler in an offensive manner and referring to him “disrespectfully” during conversations with him. He formed the very credible view that “Robert does not like Hank”. None of the above negates the evidence of the applicant’s witnesses Mr Henderson, Ms Raglus and others that Mr Spangler raised his voice and swore at the applicant.
At the hearing and in written submissions both counsel sought to prove that the applicant and Mr Spangler used disparaging or inappropriate language to each other. While such language was probably used by both men, I doubt whether it was used maliciously, at least on Mr Spangler’s part. I am also reasonably certain that it was not in any way causative of the breakdown of their relationship. The accusations are merely emblematic of the interpersonal conflict which has deeper roots.
Mr Buckley suggests that Mr Spangler was characterised by the applicant’s team as an “outsider”. He was an American who had been involved in a significant restructure. He had an accent. Other reasons may also be important. He was a comparatively recent employee of the respondent. Obviously, he had a different approach to aspects of the way the applicant’s team should operate to that which prevailed in the past. Equally, the applicant did not believe that Mr Spangler’s methods were fair or productive.
Several of the witnesses refer to Mr Spangler’s desire to have the applicant delegate work and to the applicant’s preference to be on the tools. It can also readily be inferred that the applicant had formed a view that on occasions Mr Spangler pushed his team to hard. Mr Spangler formed a view that the applicant was careless with his expenditure of council’s funds even before he became his supervisor. The applicant, on the other hand, says that he was complying with the instructions of his supervisor at the time.
Collectively, these matters probably go some of the way to explaining the antipathy between the two men. They, however, do not however assist in determining whether the applicant’s injury was caused by reasonable action in relation to discipline. Dr Roberts expressed the opinion that if it could be shown that Mr Spangler did not behave in appropriately towards the applicant then the development of the applicant psychological injury could be explained by his actions in respect of discipline. By and large, I accept that Mr Spangler behaved appropriately. That is relevant to the issue in dispute, particularly to the issue of reasonableness. It does not, however, provide an answer to the question of whether the applicant’s psychological condition was wholly or predominantly because by reasonable action by the employer.
As Mr Hickey submitted, this is not a case where there is any documentary evidence of a disciplinary process. It is not suggested that the applicant was ever given a formal warning by Mr Spangler while he was his supervisor. It is not suggested that the applicant was about to be given a formal warning or that a process had been initiated which would lead to a warning. I have referred to Mr Spangler’s evidence in respect of the July 2009 meeting above. While there may have been some disciplinary aspects of that meeting, it is quite clear that it was intended to have other purposes. Other than checking on the applicant and informing him that he understood his difficulties, a large part of the meeting it seems to have been a discussion of work practices.
The difficulties in characterising the meeting as a disciplinary meeting is a microcosm of the problems confronting the respondent in establishing that the applicant’s injury was wholly or predominantly caused by discipline. Over the years, the applicant and Mr Spangler had a poor working relationship. Some aspects of it may have related to discipline. Plainly, however, there were differences over the whole range of issues relating to the performance of the work that cannot readily be brought within the rubric of discipline. Then, there was plainly a degree of personal animosity, particularly on the part of the applicant towards Mr Spangler, which compounded their difficulties.
Mr Hanrahan suggested that it was imperative that the respondent take action against the applicant to protect the integrity of its budget. But apart from a reprimand from Mr Spangler, who was not the applicant’s supervisor at the time of the commencement of the impugned work, no disciplinary action was taken. He submitted that he was “wilfully blind” to the respondent’s legitimate management concerns. There may be some truth in this submission. But the respondent took no disciplinary action against the applicant in respect of improper expenditure or in respect of “ provocative” behaviour. The evidence establishes that Mr Spangler made occasional forays in an attempt to rectify this situation. But he did not implement any formal disciplinary action.
While some aspects of the applicant’s behaviour can be characterised as uncooperative or insubordinate, that is no basis for rejecting his claim. It does not provide a ground to reduce or extinguish the respondent’s liability. Equally, a finding that a worker is entitled to compensation does not constitute approval of his behaviour or a finding that the behaviour of the employer is morally reprehensible.
In order to extinguish its liability to pay compensation for a psychological injury the respondent must prove that the injury was caused “mainly” or chiefly’ ’by actions with respect to discipline. The evidence in this case suggests long standing interpersonal conflict between two senior employees of the respondent. It suggests that the men had very different approaches to the way in which work should be done and that there were repeated altercations about a variety of matters relating to the nature of the work, the welfare of the applicant’s team, and whether each was truthful. In that context, it is not possible to reach a positive conclusion that the injury was a wholly or predominantly caused by discipline.
I propose to find and make orders as follows:
(a)    the applicant suffered psychological injury arising out of and in the course of his employment namely a major depressive disorder;
(b)    the applicant’s employment was the main contributing factor to the contraction of the disease;
(c) the deemed date of injury for the purposes of section 15 of the 1987 Act is 10 July 2019;
(d) the respondent has not established that the applicant’s injury was wholly or predominantly caused by reasonable action taken by it with respect to retrenchment, performance appraisal or discipline within s 11A of the 1987 Act.
(e)    that the applicant was totally incapacitated and had no residual learning capacity as a result of the injury from 10 July 2019 the end of the second entitlement period, and
(f)    that the respondent pay the applicant weekly compensation pursuant to section 36 at the rate of $1,996.62 per week from 9 September 2019 to 6 October 2019 and at the rate of $1,681.36 per week from 7 October 2019 to the conclusion of the second entitlement period.

[2022] NSWPIC 232

20 May 2022