McCarthy v Department of Corrective Services - [2010] NSWWCCPD 27

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:			McCarthy v Department of Corrective Services [2010] NSWWCCPD 27
APPELLANT:			Anne Margaret McCarthy
RESPONDENT:			Department of Corrective Services
INSURER:			Employers Mutual Limited
FILE NUMBER:			A1-5623/09
ARBITRATOR:	Mr G Charlton
DATE OF ARBITRATOR’S DECISION:			2 November 2009
DATE OF APPEAL HEARING:		16 March 2010
DATE OF APPEAL DECISION:			22 March 2010
SUBJECT MATTER OF DECISION:			Psychological injury; section 11A of the Workers Compensation Act 1987; whether the employer’s actions were actions taken with respect to performance appraisal, discipline and/or transfer; whether the employer’s actions were reasonable; whether the worker’s admitted psychological injury was wholly or predominantly caused by action taken or proposed to be taken with respect to discipline, performance appraisal and/or transfer; non compliance with section 74 of Workplace Injury Management and Workers Compensation Act 1998; issues in dispute; cause of incapacity; whether a dispute as to cause of incapacity must be particularised
PRESIDENTIAL MEMBER:			Deputy President Bill Roche
REPRESENTATION:			Appellant:	Mr D Shoebridge, instructed by WG McNally Jones Staff
Respondent:	Mr S Hickey, instructed by Rankin Nathan Lawyers
ORDERS MADE ON APPEAL:			The Arbitrator’s determination of 2 November 2009 is revoked and the following orders made in its place: (a) The respondent employer is ordered to pay to the applicant worker weekly compensation as follows: (i) on the basis of total incapacity under section 36 of the Workers Compensation Act 1987 (‘the 1987 Act’) from 20 January 2008 until 5 May 2008 in the sum of $1,297.07 per week; (ii) on the basis of partial incapacity under section 40 of the 1987 Act from 6 May 2008 until 30 June 2008 in the sum of $297.07 per week and from 1 July 2008 to 10 August 2008 in the sum of $348.95 per week; (iii) on the basis of partial incapacity under section 38 of the 1987 Act from 11 August 2008 until 10 August 2009 in the sum of $1,079.16 per week, and (iv) on the basis of partial incapacity under section 40 of the 1987 Act from 11 August 2009 to date and continuing in the sum of $348.95 per week. (b) The respondent employer is to pay the applicant worker’s hospital and medical expenses under section 60 of the 1987 Act. (c) It is noted that, under section 52 of the 1987 Act, the applicant worker’s entitlement to weekly compensation ceases on 15 March 2011. (d) The respondent employer is to pay the applicant worker’s costs. The matter is certified as complex and costs under Table 1 are increased by 30%.”
The respondent employer is to pay the appellant worker’s costs of the appeal, assessed at $2,200.00 plus GST.

BACKGROUND

The appellant worker, Ms McCarthy, started work as a probation and parole officer with the respondent employer, the Department of Corrective Services (‘the Department’), in July 1996. Ms McCarthy’s case is that she sustained a psychological injury (adjustment disorder with anxiety) as a result of being heavily overworked and unfairly treated in the course of her employment from 1 June 2006 until 17 December 2007.

As a result of an incident at work on 17 December 2007 (when Ms McCarthy said that she hoped her manager’s illness, which led to the cancellation of a meeting Ms McCarthy was required to attend, was terminal), she saw her general practitioner, Dr Vidalis, that afternoon and was certified unfit until 19 December 2007. She worked until 10.45pm on 19 December 2007 and then took pre-arranged leave. She was scheduled to return to work on 21 January 2008.

While on leave, Ms McCarthy became distressed as a result of a telephone conversation on 17 January 2008 (referred to by the Arbitrator as having occurred on 19 January 2008) with Mr Pratley, the Department’s acting area manager, when he informed her that the Department would be investigating the circumstances of the incident on 17 December 2007. She has not returned to work since and submitted a claim form on 13 April 2008.

In a section 74 notice dated 29 May 2008, the Department’s insurer, Employers Mutual Limited, disputed liability for the claim on the ground that the psychological injury (which it admitted) had been wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers, or provision of employment benefits to workers.

This notice did not comply with section 74 of the Workplace Injury Management and Workers Compensation Act 1988 (‘the 1998 Act’). The Commission has repeatedly held that, to properly comply with section 74, insurers must issue notices that clearly and concisely identify the issue or issues in dispute (see Gray v Busways Gosford EMP Pty Limited [2009] NSWWCCPD 124). The notice issued by Employers Mutual did not do that.

If an insurer seeks to rely upon section 11A(1) of the Workers Compensation Act 1987 (‘the 1987 Act’) it must, in plain language, identify the ground or grounds upon which it relies and the factual circumstances alleged to support those grounds. It is unacceptable for an insurer to merely list all of the eight potential grounds in section 11A(1), as Employers Mutual did in this matter.

In an Application to Resolve a Dispute (‘the Application’) registered in the Commission on 17 July 2009, Ms McCarthy sought weekly compensation in the sum of $1,297.07 from 17 December 2007 to date and continuing together with hospital and medical expenses. This was amended on appeal to delete 17 December 2007 and insert 20 January 2008. The Application gave a date of injury of 17 December 2007 and described the injury as “psychological/psychiatric”. Under “Describe how injury occurred”, the following appears:

“Applicant subjected to undue psychological stressors from 1.6.06 as detailed in the attached documentation.”

The above description of injury was inadequate and inappropriate. Part 4 of an Application to Resolve a Dispute must succinctly identify the alleged cause of injury. The attached documentation included hundreds of pages of statements, emails, memoranda and medical reports. It is unacceptable to refer to stressors “as detailed in the attached documentation”.

In its Reply, the Department relied upon its section 74 notice and, apparently, sought leave to dispute, “that the applicant has an incapacity for work.”

In a letter dated 24 August 2008, Ms McCarthy’s solicitors sought particulars of the section 11A defence. The Department’s solicitors advised by letter dated 28 August 2009 that the Department relied on “transfer”, “performance appraisal” and “discipline”. That response was also inadequate and failed to particularise the nature of the Department’s defence.

The Commission listed the matter for conciliation and arbitration on 30 September 2009. On that day Mr Brennan, solicitor, appeared for Ms McCarthy and Mr S Hickey, barrister, appeared for the Department. The Arbitrator recorded that the Department conceded that Ms McCarthy had suffered a psychological injury in the course of or arising out of her employment and that her employment had been a substantial contributing factor to her injury (T1.34). He also recorded that the Department disputed “the extent of incapacity at certain dates” (T1.47). Neither party challenged the Arbitrator’s statements. It was also agreed, though not expressly recorded by the Arbitrator, that the injury had been caused by the circumstances of Ms McCarthy’s employment from 1 June 2006 up to and including 17 December 2007.

In respect of the section 11A issues, counsel for the Department prepared and tendered a four-page hand written statement of “Issues/Particulars” in which, for the first time, the Department properly identified the issues in dispute. He identified the issues as follows:

“The applicant’s psychiatric injury sustained with the Respondent was wholly or predominantly caused by the following ‘reasonable’ actions taken or proposed to be taken by or on behalf of the employer:

(1)17/12/2007:
(Performance appraisal/ & discipline)

(a) The calling of the staff meeting by Susan [sic]
Lutherborrow and the cancellation of that meeting due to illness of Susan Lutherborrow.

(b)The reprimand by Mr Peter Miller to the applicant regarding an unacceptable comment relating to Susan [sic] Lutherborrow and the request for apology.

(c)The respondent’s response to the conduct and comments made by the applicant on 17/12/2007 having regard to its duty of care to clients and other fellow workers and including by [sic] Peter Miller.

(2)2006

(a) Fay [sic] Abdel-Ahad’s attempt to address issues of
‘case management’ performance with the applicant and need to refer matters to Director – ‘Bill Kearney’.
(b)Meeting between the applicant and Bill Kearney to discuss some of the concerns and issues that had been raised by unit leader Fay [sic] Abdel-Ahad.

(c)Review of caseload by Bill Kearney and dealings with the applicant in relation to review of caseload & complaints/referral by Fay [sic] Abdel-Ahad.

(3) October 2007
(Transfer)
(a)Regarding Human Resources Officer (Susan
McDougall) responding to request from Stella Miliatis that applicant wanted a transfer from Hurstville Office and the contact with Susan Lutherborrow & Bill Kearney, including the response by Susan McDougall in setting up a meeting to discuss alleged harassment by manager and to explain process of submitting complaint under Bullying and Harassment Policy.

(b)Contact by Susan McDougall with Ralene Hartman, ‘Manager of Staff Support Services’.

(c)Contact by email to [the] applicant from Susan McDougall re supplying of additional support on ‘Department’s Employment Assistance Program’.

(d)After due consideration management were of [the] view that transfer out of Hurstville was not an option.

(4) October 2007
(Performance appraisal and discipline)

(a)The respondent was aware of [the] applicant’s personal issues relating to [the] health of her family and as a consequence the respondent did not move to address performance issues with her at that time.

(5) Discipline
Performance appraisal

Re: the alleged intervention by Susan Lutherborrow & meeting with regard to [a] loud conversation with Annick Larochelle.

(6) Transfer 2006

The discussion of 2006 in which Mr Stewart McNaughton discussed [the] restructure of the department.”

These particulars should have been provided to Ms McCarthy in the section 74 notice issued in May 2008. Insurers are yet again reminded that they have a statutory obligation to comply with the terms of section 74. Their repeated failure to do so is unacceptable and unsatisfactory as it unfairly deprives workers of the opportunity of knowing the case they have to meet. This matter, as with other matters where insurers have shown a blatant disregard for the terms of section 74, will be referred to the WorkCover Authority of NSW for investigation into the insurer’s non-compliance with its statutory obligations.

The arbitration concluded on 30 September 2009 with the parties’ submissions but no oral evidence. On 14 October 2009, the Arbitrator issued the following Direction to the parties:

“1.     Having formed the view, based on the evidence of the Applicant and the
report dated 21 January 2008 and the clinical notes of Dr. Vidalis, that on or about 19 [sic, 17] January 2008 the Applicant suffered an aggravation, acceleration, exacerbation or deterioration of her psychological condition, being an issue not canvassed at the hearing, the Parties are directed to file and serve by 23 October 2009 submissions in relation thereto and in respect of the issues set out below, citing where possible authority therefor.
2.     The Parties may by 28 October 2009 file and serve a response to the other Party’s submissions.
3.      Leave is granted to either Party to file and serve by 28 October 2009 the clinical notes of Dr. Vidalis as relate to the Applicant’s consultation on 17 December 2007 and/or the Medical Certificate of Dr. Vidalis dated 17 December 2007.

Issues:

1.       Do the events of 19 January 2008 constitute the same or a separate injury to that of 17 December 2007?
2.       If the same injury, do we need to redefine the description and date of injury?
3.       If the description and date of the injury are redefined or if there is a second injury, does the Commission have jurisdiction to determine claims for weekly compensation and medical expenses arising therefrom?
4.       If a second injury and the Commission has jurisdiction,
4.1.   does the Respondent concede injury and causation (s4 & 9A)?
4.2.does the Respondent raise a defence under s11A (with or without leave under s289A(4))?

5. What other matters require consideration?
Notation:
The Clinical Notes of Dr. Vidalis, as attached to the Application to Admit Late Documents dated 28 September 2009 and admitted on 30 September 2009, do not contain the clinical notes of Dr. Vidalis as relate to the Applicant’s consultation on 17 December 2007. The Medical Certificate of Dr. Vidalis dated 17 December 2007 has also not been found in the evidence.”

In response to the above Direction, Ms McCarthy submitted that:
“There is no issue in these proceedings as to injury under Section 4 or Section 9A or that the Applicant’s injury caused the incapacity alleged. As best the writer recollects the parties did make submissions in relation to the degree of her incapacity, within the context of the application of Sections 36, 38 and 40.
The only issue to be determined is Section 11A(1) as particularized by the Respondent’s Counsel on the hearing date. There is no issue that incapacity as alleged results from the factual matters alleged in the Application to Resolve a Dispute on and before 17 December, 2007.
Bearing in mind the above, it would appear that the view formed as referred to in the first paragraph of the Direction is not relevant to the Commission’s task in this matter and that to respond to the issues raised would involve falling into error and the potential denial of procedural fairness.”

Whilst the Department filed submissions in response to the Arbitrator’s Direction, those submissions were filed outside the time permitted by the Arbitrator and, as best I can determine, were not considered by him. Essentially, the Department argued that Dr Vidalis’ notes raised significant doubts as to the effect of any alleged work injury upon the worker as at 17 December 2007 and that, the worker having chosen not to rely upon the events of 2008, it was an impossible task to determine what level of incapacity attached to the events up to 17 December 2007. It argued that the events of 19 [sic 17] January 2008 could be determined to constitute a separate injury and there was an “evidentiary dilemma” in the worker’s case in determining whether any total incapacity flowed from the January 2008 event and/or whether any partial incapacity flowed from the January 2008 event, and what level of discretionary reduction should be used under section 40(1) when assessing the proper level of compensation based upon any partial incapacity found for the events relied upon. The Department did not concede that there had been a second injury in January 2008.

The Arbitrator delivered his decision on 2 November 2009 when he made an award in favour of the Department. The Commission issued a Certificate of Determination on that date in the following terms:

“1. Award in favour of the Respondent in respect of the Applicant’s claim for compensation in respect of the psychological injury of 17 December 2007.
2. That the matter is certified as complex, and the maximum payable in respect of the Respondent’s costs under Table 1 are increased by 30%.”

In an appeal filed on 30 November 2009, Ms McCarthy seeks leave to appeal the Arbitrator’s determination.

LEAVE TO APPEAL

Monetary Threshold

Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.

There is no dispute that the monetary thresholds in section 352(2) are satisfied.

Time

The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.

I grant leave to appeal.

THE EVIDENCE

Ms McCarthy’s evidence is set out in several statements that run to well over a hundred pages. Though I have read and considered all the evidence, due to the volume of material tendered it has not been possible to recount every piece of evidence and the following is a summary of the evidence relevant to the issues in dispute. I have essentially followed the headings in Ms McCarthy’s statement of 13 April 2008.

Ms McCarthy is a single woman who was born in 1946 and is currently 64 years old. She gained her Leaving Certificate in 1962 and studied medicine at the University of Sydney for two years before completing a Bachelor of Arts degree with honours in Indonesian and Malayan. In the 1970s she taught English, worked at the Australia Council for two years, taught adult migrants for a year and then went overseas for two years where she worked in London. She attempted a cadetship as a journalist, but left that job after 18 months to take a job with the Health Department in 1977. She worked at the Northern Rivers Psychiatric Unit at Lismore and as a Health Education Officer for four years. She returned to Sydney in about 1982 and started work with the Department of Community Services but was made redundant in 1993. She commenced work as a probation and parole officer with the Department of Corrective Services in July 1996. At the time she stopped work in 2007 she was a grade 6 clerk and had been on that level for many years.

Ms McCarthy was assaulted in 1998 and suffered post traumatic stress disorder. She came under the care of Dr Takas, psychiatrist, who recorded in his report of 4 April 2002 that Ms McCarthy concluded, after temporary placements with the Department, that she had “no real alternative” but to return to her substantive position as a field probation and parole officer. This was despite reservations on his part given her “current medical condition”. Dr Takas felt that there needed to be a “transitional period to full duties” with a gradual increase in Ms McCarthy’s workload spanning a period of one to two months. He felt it imperative for her to have a “supportive office environment”. Ms McCarthy impressed him as a “conscientious worker who is motivated to discharge her duties as an employee and a parent to the best of her abilities.”

Against this background, Ms McCarthy started work as a field probation and parole officer at the Bankstown District Office in May 2002. From January 2006 until mid March 2006 she was the acting unit leader, whilst still performing her usual duties as a probation and parole officer. As she had been asked to concentrate on her unit leader work, her probation and parole work had to “go on the back burner” as there was no one relieving in her substantive position. She resumed her usual position in the second half of March 2006.

Meeting on 26 June 2006

As a result of her father suffering a fall, Ms McCarthy took two days “sick as carer’s leave” on 15 and 16 June 2006 to attend to him in Wollongong. The following week she was ill and took two days leave on 19 and 20 June. On 23 June she took one day “sick as carer’s leave” to take her father to a doctor’s appointment in Wollongong.

On 26 June 2006, Mr Kearney, the district manager at Bankstown, requested a meeting to review Ms McCarthy’s caseload. It was an informal meeting and not described as a disciplinary or performance review meeting, though it also involved Ms McCarthy’s unit leader, Ms Abdel-Ahad. Mr Kearney reviewed Ms McCarthy’s caseload over the preceding six months and critically commented on her caseload management and compliance with departmental policies, procedures and guidelines.

Ms McCarthy says that Mr Kearney failed to acknowledge that for the first three months she had been doing two jobs and since then she had had an influx of difficult cases. At the end of the meeting, Mr Kearney presented a document for signature that imposed deadlines and proposed work performance monitoring. Ms McCarthy refused to sign. Ms McCarthy was distressed by this meeting and saw her general practitioner and was referred to a psychiatrist for “severe anxiety and depressive symptoms stemming from harassment” at work.

Mr Kearney’s evidence is that Ms Abdel-Ahad brought to his attention in mid 2006 that Ms McCarthy had “case management performance issues”. She had tried to address those issues with Ms McCarthy, however, had not been successful to the standard required under departmental policy and procedure and therefore had no alternative but to bring the matters to his attention. Mr Kearney intended to keep the discussion with Ms McCarthy “informal”. The discussion concerned Ms McCarthy’s non-compliance with “Case Management Policies, Procedures and Guidelines”.

Examples of Ms McCarthy’s non-compliance included her failure to complete assessments in a timely manner and her failure to follow procedures in relation to client home visits. He stated that Ms McCarthy’s initial response was “defensive and emotive”. Ms McCarthy said that she had a backlog of work or an excessive workload. Mr Kearney reviewed her caseload and found it to be within the normal range. He offered her a pre-prepared guideline note that identified the areas of concern raised by Ms Abdel-Ahad. The purpose was to have Ms McCarthy understand what the issues were. It was Mr Kearney’s intention to work with her to address those issues and improve her work performance. He considered that his conduct was professional, fair and reasonable and he denies any allegation that he was bullying, harassing or victimising Ms McCarthy.

In her 60-page statement in response dated 23 March 2009, Ms McCarthy stated that Ms Abdel-Ahad had conducted an audit of her caseload on 9 June 2006 but had not expressed the concerns mentioned by Mr Kearney and appeared to be “reasonably satisfied overall” with Ms McCarthy’s case management, but raised “a few issues for follow-up which I was in the process of doing.” She stated, “in no way could that conversation be construed as performance management.” Mr Kearney denied that the meeting was a formal or disciplinary meeting and he refused to allow Ms McCarthy to have a witness of her choice (Ms Cheryl White) present.

Ms McCarthy stated that the audit of her caseload going back six months failed to acknowledge that for the first half of that period she had been doing two jobs and that, as a result, she had a backlog of work in addition to an influx of new clients. Mr Kearney generalised and, when he provided specifics, she was able to answer them but he appeared unwilling to hear her responses, as he seemed to have already formed his view beforehand. Ms McCarthy admitted she had a backlog of work as she had been doing two jobs in the first half of the six months that he audited.

Ms McCarthy stated that it was “disingenuous” of Mr Kearney to present his document as “a pre-prepared guideline” when “the tone was clearly intimidatory”. It was not a discussion in which her input was sought because Mr Kearney and Ms Abdel-Ahad had already formed their view, as was evidenced by Mr Kearney’s prepared statement. The issue was not her “work performance” but that for half of the six months reviewed, she had been doing two jobs. Mr Kearney did not acknowledge that double load.

Transfer to Hurstville District Office

On learning of a vacancy at the Hurstville District Office, Ms McCarthy applied for and secured a transfer to that office on 1 August 2006. Her new District Manager, Ms Lutherborrow, reported directly to Mr Kearney. Ms McCarthy heard, via a third person, that Mr Kearney had told Ms Lutherborrow that there were “performance issues with her”. Despite this, Ms McCarthy’s initial experience at Hurstville was positive and she got on well with her unit leader, Peter Miller, and with Ms Lutherborrow.

Incident with Mr McNaughton

At an office meeting towards the end of 2006, Ms McCarthy spoke up about her support for a group opposing a restructure of Community Offender Services. She alleges that Mr McNaughton took strong exception to her comments and to the fact that she opposed the restructure. She states that he yelled at her in front of other staff, accusing her with words to the effect that she was a “backstabber”. She was upset by that verbal attack and left work early and went home in tears. Mr McNaughton subsequently apologised, but Ms McCarthy considered that their working relationship, which had previously been good, was never the same again.

Mr McNaughton stated that Ms McCarthy was unhappy with the proposed restructure because it discriminated against her as she was a single mother and would not be able to advance to grade 7 or 8, as she was not prepared to do shift work. He recalls that the argument became heated and he indicated to her that he definitely disagreed with her assertion that the restructure should not be supported. He does not recall the exact wording he used. He agrees that he apologised to Ms McCarthy that afternoon, though she refused an invitation to have a cup of coffee and discuss the issue. Some four to six weeks later she did have a cup of coffee with him and he believed that that was the end of the incident.

In her response to Mr McNaughton’s statement, Ms McCarthy responded that she had a clear recollection of the incident and of Mr McNaughton calling her a “backstabber”. She added that his accusation left her “gobsmacked” and that he became very angry and abusive. She agreed that he offered to have a cup of coffee and discuss the issue but did not recall if that was the same afternoon.

Workload issues

The workload model agreed to by the Department and the Public Service Association allowed for an allocation of work to the value of 140 hours per month per officer. Ms McCarthy stated that she often had an excessive number of clients (in the 50s to late 60s range) with a workload sometimes exceeding 140 hours. She discussed her workload with Mr Miller, her immediate supervisor at Hurstville, and his response was to the effect that everyone was in the same boat. She stated that Ms Lutherborrow had made representations for additional officers to cope with a blowout in the workload, but had been refused.

In respect of the workload issue, the Department relied on evidence from Mr McNaughton, Mr Miller and Mr Kearney.

Mr McNaughton, unit leader at the Hurstville District Office, stated that district managers and unit leaders had fortnightly meetings and always listed “staffing and workload as standing matters on the agenda”. This was to ensure that workloads were monitored so that staff members were able to perform their duties efficiently and effectively.

Mr Miller did not dispute that the worker had a demanding workload. He added, “because of staff shortages other officers were also carrying excessive case loads” (Mr Miller’s statement 1 May 2008, paragraph 10). In terms of the number of clients assigned to Ms McCarthy, he said that some of them would have had expired orders, which would normally be taken from her case load.

Mr Kearney stated that in 2006 Ms Abdel-Ahad brought to his attention that Ms McCarthy had case management performance issues. When he spoke with the worker about those issues, it was his intention to keep the discussion informal. He discussed non-compliance with Case Management Policies, Procedures and Guidelines, such as failing to complete assessments in a timely manner and failure to follow procedure in relation to home visits of clients. Her initial response was “defensive and emotive”. She “always had some reason for her failures and would generalise”. She said she had a backlog of work or an excessive workload. When he conducted reviews of her caseload, he found it to be “within the normal range” and not excessive. To have Ms McCarthy understand the issues, he offered her a “pre prepared guideline note which identified some of the areas of concern” raised by Ms Abdel-Ahad. He considered he was justified in conducting the discussion and that his conduct was “professional, fair and reasonable”. He denied he bullied, harassed or victimised Ms McCarthy.

Encounters with Mr Miller and Ms Larochelle on 17 July 2007

On this day, Ms McCarthy arrived at work when a number of work colleagues were sitting in the coffee room discussing the ongoing re-structure of Community Offender Services and the issue that all promotional positions would require agreement to do shift work. Mr Miller said words to the effect that people could “choose” whether to go for the promotional positions or not. As a single parent, Ms McCarthy felt strongly on this issue and asked “rhetorically” why people could not understand that some people could not “choose” to compete for the positions because of their carer responsibilities. She felt that the promotional arrangements were inherently discriminatory under the Anti-Discrimination Act and that what she said was not understood. People stared at her, so she left the coffee room.

She then had a number of minor encounters with Ms Larochelle in which Ms Larochelle appeared “uncharacteristically curt”. Later on the same day (a particularly busy day for Ms McCarthy with 17 clients booked in) Ms McCarthy was hurrying from the photocopier room to the interview room when her phone rang. She called out for someone to answer her phone and take a message for her. Ms Larochelle said words to the effect that other people had clients as well. Ms McCarthy was “taken aback”, stopped, and said that that was the third time that Ms Larochelle had “had a go at” her that day and she asked “what it was all about”. After Ms McCarthy completed her interview, Ms Larochelle came up to her and spoke to her about her expecting other people to take her messages. Ms McCarthy responded, “Well, just ignore it then” and she walked to the coffee room. Later that afternoon, Mr Miller told her that she owed Ms Larochelle an apology. Ms McCarthy did not think an apology was warranted, as Ms Larochelle had been “snippy” with her earlier in the day.

Ms Larochelle’s evidence is that she recalls a day when Ms McCarthy said, in a loud tone, “Can somebody pick up my phone.” Ms Larochelle commented that she had clients as well. Ms McCarthy walked towards the end of the office and, from about two desks away, she shouted, “what is the matter with you today, you have been snippy two or three times.” Ms Larochelle was “sort of in shock” and said, “You are in your own world.” At the conclusion of their respective work interviews, Ms Larochelle approached the worker and said “Anne can we sort this out?” Ms McCarthy got up and walked away. Ms Larochelle walked back to her desk feeling “pretty upset”. She did not need to be shouted at. Ms McCarthy later apologised for the incident and said that she did not realise she had been shouting. Ms Larochelle also apologised if she had been snippy, but added that that did not warrant the way Ms McCarthy spoke to her. In the course of this meeting, Ms Larochelle cried and walked out. She considered that Ms McCarthy had spoken to her in a most unprofessional way.

Meeting with Ms Lutherborrow 18 July 2007

On 18 July 2007, Ms Lutherborrow called Ms McCarthy into her office and said both Mr Miller and Ms Larochelle had complained about her behaviour the previous day. Ms McCarthy replied that the matters were “so petty that they did not deserve further discussion and should have been left on the previous day”.

In her response of 23 March 2009, Ms McCarthy stated that she considered Ms Larochelle’s reaction to have been out of proportion and gratuitous given what she thought was a simple request, which was not directed at her. She agreed that Ms Larochelle did approach her at her desk after the interview, but recalls that Ms Larochelle did not want to “sort things out” but wanted to have a further discussion on a matter that appeared (in Ms McCarthy’s opinion) to be “too petty to want further attention”. Ms McCarthy agrees that she walked away to avoid inflaming the situation further. She claims that Ms Larochelle made a disparaging comment as she walked away. Ms McCarthy did not regard her request as “extraordinary”. The request was not a demand and, in any case, was not directed at Ms Larochelle. Ms McCarthy believed that Ms Larochelle had “other things going on” at the time and that her reaction in leaving the district manager’s room in tears probably demonstrated that she was also under an excessive workload.

Ms McCarthy acknowledged that her voice was louder than other people in the office and said that she would keep her voice down in the future. She subsequently worked amicably with Ms Larochelle, but she felt unhappy about the way in which the matters had been handled by Mr Miller and Ms Lutherborrow. She felt so distressed that after two sleepless nights she consulted Dr Morgan on 20 July 2007, as her usual doctor, Dr Vidalis, was not available and she obtained a medical certificate for one day’s sick leave.

Mother’s terminal illness and death

Ms McCarthy took time off work on 14 August 2007 to attend to her gravely ill mother who passed away on Friday 17 August 2007. As a result, Ms McCarthy was off work on a combination of carer’s leave and sick leave from 14 August 2007 until she returned on Monday 3 September 2007.

Return to work Monday 3 September 2007

On her return to work, Ms McCarthy found her pigeonhole filled with 12 new matters. This was a heavy and, in her view, excessive influx of new clients, given that she already had a backlog of work because of nearly three weeks absence.

On her return to work, Ms Lutherborrow asked if the worker still intended to attend the Public Service Association Annual Women’s Conference on 13 and 14 September 2007, though her application for special leave to attend that event had already been approved. Ms McCarthy stated that she wished to attend and Ms Lutherborrow appeared to be displeased with this response and said that she would have to look at her application for leave in October.

Ongoing investigations for breast lump

Whilst on leave in August 2007, Ms McCarthy found a breast lump that required specialist investigations that went on for a lengthy period due to inconclusive x-rays and the need for more diagnostic tests. She worked half a day on 11 September 2007, as she had a specialist appointment that afternoon. Before leaving, she could not find Ms Lutherborrow or Mr Miller and she wrote on the white board “out” for the afternoon. On her return to work on the following day she found an email from Ms Lutherborrow reprimanding her for her absence the previous afternoon. The email stated:

“Hi Anne,
Just a reminder that you need to consult with me prior to leaving early from the office on your reporting day – other staff have to see your clients in your absence. If it is unavoidable, eg illness, then I am sure it won’t be a problem, but any foreknowledge of not being here allowed you to reschedule, and at the least inform me, as the manager, before you left. And I understand you were aware of this earlier in the day. We do work flexible hours, and I think I am supportive of that flexibility. However, we also need to maintain the core business that we do, as well as the associated responsibilities.
Please see me if you have any questions.
thanks
Susanne”

Ms McCarthy was “puzzled and distressed by this email” as she had informed Ms Lutherborrow in advance of her absence and the reason for it. She showed the email to Mr Miller and Mr McNaughton. Mr Miller suggested that she check the attendance book to see which of her clients had reported in her absence. On doing that she discovered that three clients had reported in the afternoon but she had made none of those appointments. Ms McCarthy spoke to Ms Lutherborrow and told her that she had informed her in advance of her absence on the afternoon of 11 September and the reason for it. Ms Lutherborrow acknowledged that she had been informed but had not been told that 11 September was Ms McCarthy’s “reporting day”. Ms McCarthy had tried unsuccessfully to get another time for her appointment and had been unaware that clients were booked in for the afternoon. Ms McCarthy agreed to email Ms Lutherborrow with any proposed absences in the future.

Friday 28 September 2007

On the last day before Ms McCarthy was due to take one week’s recreational leave, she found in her pigeonhole two new pre-sentence reports. Both appeared complex. She had seven clients booked in on that day (although a number did not turn up), an urgent pre-sentence report due soon after her return from leave, and her computer malfunctioned in the afternoon. Neither Ms Lutherborrow nor the unit leaders were present in the office that afternoon to discuss pre-sentence reports. Ms McCarthy felt overloaded with work and did an “Officer Workload Enquiry” which showed a total of 167.5 hours and 67 clients. The Public Service Association had advised members that, when the 140-hour limit under the workload model was exceeded they should hand back the excess to their supervisors. Accordingly, Ms McCarthy left a note for Mr Miller with the two files, stating:

“Peter
I am returning Mariano Gallo & Greg Buckingham psr’s as I am unable to do them given inadequate time (not back till 8/10), the fact that I am now doing court duty & have less available time in the office & am overloaded (see officer workload enquiry of 167.5 hrs & 67 clients.
Please make other arrangements.
Thanks, amc”

She also left a print out of the officer workload enquiry showing the above figures.

Ms McCarthy returned from leave on 8 October 2007 and was surprised to find the two pre-sentence reports on her desk. Mr Miller directed her to discuss the matter with Ms Lutherborrow.

Meeting with Ms Lutherborrow 9 October 2007

Ms McCarthy pointed out that she was overloaded with work, had a backlog from when she had been on leave, had a recent heavy influx of new clients, had ongoing medical investigations requiring absences from work, was getting court duty once a fortnight, and was heavily booked with clients on reporting days, so had less available time in the office to do the pre-sentence reports. She also referred to the computer malfunction on 28 September and that she would lose half a day from the office to take her car to NRMA at Riverwood on 10 October 2007 following a car accident. Ms Lutherborrow interrupted and said that that had nothing to do with work. She added that Ms McCarthy could have sent out reporting letters to the two pre-sentence report clients before she went on leave. Ms Lutherborrow appeared intransigent and would not concede Ms McCarthy’s points. As they seemed to be at an impasse, Ms McCarthy left the room.

Ms McCarthy was so distressed following this meeting that she telephoned Ms Miliatos, human resources consultant at Long Bay Correctional Centre, and told her that she considered she was being “bullied and harassed” by Ms Lutherborrow and wanted a transfer out of Hurstville District Office. She also said that she did not want Mr Kearney involved in any discussions to do with her complaint as she considered that she had been bullied and harassed by him at the Bankstown District Office. Ms Miliatos appeared sympathetic and said she would have to discuss the matter with her superiors.

Ms McCarthy then contacted the industrial officer with the Public Service Association, Ms Helen Sourlas, and told her about her meeting with Ms Lutherborrow.

Ms McCarthy received an email from Ms Lutherborrow on 9 October 2007. The email stated:

“Anne,
As per my instructions to you, you have been allocated these 2 PSRS for preparation for Court. I considered your request to reallocate them to another officer.
However, I have looked at your workload, and consider it entirely acceptable that you retain these two PSRs, due 29/10/07 and 2/11/07. I agree that you now don’t have a full 5 weeks to do the work in the remaining time frame. What you have is 3 and 3 ½ weeks to prepare them, and you don’t need that amount of time to actually prepare a report in any case. Furthermore, you received these allocations at the end of September, and the fact that you did not send out appointment letters prior to your taking a week’s leave, which would have helped you with your preparation and organisation, is not justification for giving them back.
As discussed with you, I offered to take some of your supervision clients off your caseload to allow you some breathing space, although I don’t consider your workload at this point excessively onerous as per the workload model (including court duty hours). However, you still said no, you can’t do them and left my office while we were still discussing the matter.
I am still open to removing some supervision cases from your caseload. Please confirm with me on this.
However, you will still need to prepare these PSRs.
Anne, I understand that it has not been an easy time of late for you personally, but if you are at work, you need to be available and able to do your work as assigned as per your job description.
Please come and chat with me and we can look at your workload together, and at management strategies, and/or if you would like some of the supervision cases removed.
Thanks,
Susanne” (emphasis included in original)

Ms McCarthy responded with a lengthy email the same day saying that she did not have sufficient lead-time to do the two pre-sentence reports as she was behind in her work due to the unforseen three weeks’ leave she took in connection with the death of her mother. She added that any cases taken off her would not address the problem of insufficient lead-time for the two full pre-sentence reports. Regardless of when the files had been allocated, Ms McCarthy only found them in her pigeonhole on the afternoon of Friday 28 September 2007 before she was due to go on one week’s leave. Due to other demands on her time, Ms McCarthy did not have the three and a half weeks’ lead-time that Ms Lutherborrow asserted. Ms McCarthy concluded her email as follows:

“I resent your implication that I am not ‘available and able to do my work…’ as I consider that I am conscientious about performing my duties. The fundamental problem in this office appears to me to be understaffing and excessive workload and I have said this on numerous occasions.”

Ms Lutherborrow sent Ms McCarthy a further email on 10 October 2007 in which she offered to take some supervision cases off her. The email also pointed out that Ms McCarthy’s workload was 122 plus 17.5 hours court duty per month, before taking into account the offer to take some supervision cases off her. Ms Lutherborrow reiterated that she felt the worker did have sufficient lead-time for the pre-sentence reports. The calculation of 139.5 hours included time for the two additional reports. Therefore, she required the worker to undertake the preparation of the two reports for Gallo and Buckingham. However, she restated her offer to look at the worker’s caseload and take some cases from her if she thought she would benefit from that. The email concluded:

“Anne, finally, we have taken into account your sick leave without pay recently, by keeping an eye on your workload hours. The majority of your clients were interviewed in your absence when they reported to the office. I do acknowledge that there is work that always needs to be caught up on when an officer is on leave, however, I think that we have taken this into account, particularly with my offer to negotiate some of the supervision cases.”

Ms McCarthy believes that she emailed Ms Lutherborrow (this email is not in evidence) stating that it would have been more helpful to have a moratorium on new clients, rather than taking clients off her supervision caseload. In response, Ms Lutherborrow wrote on 11 October 2007:

“Hi Anne,
I have transferred those 2 clients as requested …(14 hours total).
Regarding allocations, we have already taken this into account if you look at the allocations spreadsheet. However, the latest one allocated yesterday, Nelson PINTO, went to you as it was a result of a PSR that you wrote. We will continue to adjust allocations of supervision clients to you accordingly up to the 2/11/07 whenever possible. However, I would expect that your case management – e.g. case notes, LSI-Rs and case plans are addressed over the next four weeks.
Do you have a copy of the audit checklist that Mr Miller has been undertaking of your caseload? I am not sure if its completely finished yet, but if you don’t have a copy, please see me, as it would greatly assist you, and highlights the items that need to be prioritised in your case management. Please also assist by indentifying anything that can be terminated.
Thanks,
Susanne”

Ms McCarthy asked other staff members if they had had similar deadlines imposed and was informed that they had not. Ms McCarthy considered this deadline to be “reminiscent of the four week deadline imposed by Mr Kearney” in June 2006.

Ms McCarthy was unable to get all her case management elements up to date within the four-week deadline Ms Lutherborrow had imposed, though she had caught up with most of her case notes. She failed to meet the deadline because of absences from work because of continuing specialist appointments and medical investigations for a breast lump, fortnightly court duty rostering, pre-sentence reports, casework, and heavily booked reporting days.

Following her discussion with Ms Miliatos, Ms McCarthy received phone calls and emails from Ms Sue McDougall, senior human resources consultant and Ms Miliatos’ immediate supervisor. Ms McDougall said that there would be a meeting to discuss her issues and she would be able to bring along a support person. She also said that one of the likely outcomes would be that Ms McCarthy would be put on a performance management plan. Ms McCarthy expressed concern about the suggestion that she would be put on such a plan and Ms McDougall stated that she had already spoken to Mr Kearney and Ms Lutherborrow and understood that “this sort of thing had happened” with her at Bankstown. Ms McCarthy said that she did not understand how her complaint of bullying and harassment of her by Ms Lutherborrow had been turned around about an issue about her work performance. Ms McDougall said that the worker had not, in fact, made a complaint about bullying and harassment, which was a formal process requiring the filling out of a specific form that had not been done. The worker again asked for a transfer from the Hurstville District Office and faxed a copy of her resume on 17 October 2007.

Ms McDougall sent an email to the worker on 22 October 2007 stating that she was happy to meet with her to discuss her “current issues/discussions with Stella [Miliatis] in regards to being bullied/harassed by your manager and explain the process of submitting a complaint under the bullying/harassment policy, if you want to pursue this matter”. Then she added that she could provide information about the department’s Employment Assistance Program, if the worker needed some additional support. Ms McDougall was available to visit the Hurstville office on Wednesday 24 October 2007. The meeting did not have to be in the office and she was happy to have a coffee somewhere.

The worker then sought advice from Ms Sourlas from the Public Service Association. She was advised that it was difficult to prove bullying and harassment and the best course might be to thank Ms McDougall for her offer but not pursue the matter further. Ms McCarthy then sent an email to Ms McDougall saying that she would try to resolve the matters herself.

Ms Miliatis’ evidence is that the worker contacted her on 10 October 2007 indicating that she wanted a transfer from Hurstville and that she was being harassed and victimised by Ms Lutherborrow. Ms Miliatis spoke with Ms McDougall and Ms Brennan, regional executive director, and was advised to leave Ms McCarthy at Hurstville and to performance manage her.

Ms McDougall’s evidence essentially confirms the chronology set out by Ms McCarthy and Ms Miliatis. Ms McDougall added that, after receiving Ms McCarthy’s resume, she spoke with Ms Judy Windle, director of human resources. After due consideration, management was of the view that a transfer from Hurstville for Ms McCarthy was not an option. Ms McDougall was aware that the worker had been experiencing personal issues relating to the health of her family and, as a consequence, the department did not move to address performance issues with her at that time.

Events on Monday 17 December 2007

Ms McCarthy cancelled certain parolee home visits so she could attend a staff meeting at the Hurstville District Office at 11am on Monday 17 December 2007. When she arrived, Mr McNaughton informed her that the meeting had been cancelled because of Ms Lutherborrow’s illness. Ms McCarthy expressed disbelief and frustration that her entire day had been “stuffed up” because of the staff meeting and she said that she “hoped it was terminal”.

Mr Miller said that she should not bring her stress into the office. She found his comment “unfair, unwarranted and puzzling”. Due to apparent tension between herself and Mr Miller she arranged for a parolee home visit and she went to her car. As she was consulting her directory to locate the parolee’s address, Mr Miller put his head in the car window, startling her. He said something about her stress and that it was not a nice thing that Ms McCarthy said about Susanne (Lutherborrow). Ms McCarthy responded that it had been a “throw away comment” and that he should get a sense of perspective. He appeared unhappy and said that he would discuss it further on her return.

Ms McCarthy was distressed by her second encounter with Mr Miller and the prospect of “yet more recriminations from him in a third encounter on the same subject” when she returned to the office. She completed the home visit, but was in such a distressed state by her encounters with Mr Miller that she returned home and telephoned her sister to seek her advice. She advised Ms McCarthy to see her doctor and get a medical certificate. Ms McCarthy attended on Dr Vidalis and related to him the incident at work and he allegedly provided her with a certificate for the balance of 17 December and for 18 December. Ms McCarthy then telephoned Mr Miller and advised him that she would not be back to work until Wednesday 19 December and she informed him of her appointments for Monday afternoon and gave him the names of the 14 clients booked in for reporting to her on Tuesday 18 December.

Ms McCarthy worked until 10.45pm on 19 December 2007, but was still unable to complete everything. She started her approved leave at the end of work on 19 December 2007 and was due to return to work on Monday 21 January 2008.

Mr Miller stated that he vividly recalls Ms McCarthy coming out of the vicinity of the lift at the Hurstville office on 17 December 2007. She was having a heated one-way conversation with someone, but he could only hear her raised voice. He was later able to confirm that she had been raising her voice with Mr McNaughton. As she passed his desk he could see that she was upset. He told her that the meeting was cancelled because Ms Lutherborrow was ill. Ms McCarthy immediately replied, “I hope its terminal”. Mr Miller, and another colleague who sat next to Ms McCarthy, was “taken back” by the comment. Mr Miller could see that the worker was “very agitated” and after she left the office, he felt some concern for her.

Mr Miller left the office and saw her sitting in her car. He approached the car and may have gently tapped on the window to gain her attention. After Ms McCarthy wound down the window, he said to her in a calm voice, “Anne, are you okay?” He stated that she “muttered some reply in an aggressive and loud manner again about the cancellation of the meeting”. He said that her comments about Ms Lutherborrow were “not appropriate”. He said that Ms McCarthy muttered something else, wound up her window and departed.

Mr McNaughton also gave evidence about the incident on 17 December 2007. He stated that he was walking to the lift when Ms McCarthy arrived. He told her that the meeting had been cancelled due to Ms Lutherborrow’s illness. She loudly expressed her dissatisfaction at being inconvenienced and having had to change her plans to attend the meeting.

The Department also relies upon a document headed “Matters to be referred to the Professional Conduct Management Committee” allegedly prepared by Ms Lutherborrow on 15 January 2008. That document consists of extensive hearsay evidence of what Ms Lutherborrow had been told of the events of 17 December 2007 whilst she was absent due to her health. It adds little to the first hand evidence given by Mr Miller and Mr McNaughton and I do not intend to rely on it on this issue.

In her response dated 23 March 2009, Ms McCarthy stated that her frustration was not directed at Mr McNaughton but was simply “letting off steam”. Her statement about Ms Lutherborrow’s illness was made “as an off hand flippant remark”. She was upset by Mr Miller saying that she should not bring her stress into the office because her “stress” arose from work issues, namely the home visits not being done because of the staff meeting that had now been cancelled and the prospect of further “unpleasant upbraiding” from Ms Lutherborrow as a result of failing to do the visits before going on leave. Ms McCarthy considered Mr Miller’s comment to be unfair. She does not recall repeating her comment in the main body of the office. She stated that the comment had not been made to Mr Miller and that she was “at a loss” to account for his assertion that the person sitting next to her had been “taken aback by that comment”. Ms McCarthy had a “vague recollection” that she may have related what had transpired to Ms Montin, a worker who sat diagonally opposite her at the four-person work station, and that a trainee may have been listening in.

Ms McCarthy received “an unpleasant shock” when Mr Miller put his head into the window of her car when she was consulting the street directory for her home visit. She does not recall him asking if she was okay, but she does recall him making further comments about her “stress” and then saying, “That was not a nice thing you said about Susanne [Lutherborrow]”. She responded by saying as noted above, that it was a “throw away line” and that he should get “a sense of perspective”. He stepped back from the car and appeared annoyed with her response as he said that he would discuss it further when she returned. She denies responding in an aggressive or loud manner and states that she responded as calmly as she was able, even though she was upset. She claims that she was “distressed and intimidated” by this further encounter and “dreaded of the prospect of a third upbraiding” from him on her return to the office.

Leave over Christmas/New Year period

Ms McCarthy took a combination of recreational leave and half pay extended leave from 20 December 2007 until 18 January 2008 inclusive.

Telephone call to Mr Rick Pratley on 17 January 2008

On or about 17 January 2008 Ms McCarthy made a personal telephone call to Mr Pratley, then the district manager at the Bankstown District Office and also the acting area co-ordinator for Bankstown, Hurstville and Sutherland. He informed her that he had recently visited the Hurstville District Office and been informed that a complaint had been lodged with the Professional Standards Management Committee in relation to her behaviour in December 2007. He advised that there would be a meeting between Ms Lutherborrow, himself, and Ms McCarthy on her first day back at work after her leave and that she was entitled to have a support person present. He also mentioned the likelihood that she would be placed on a Performance Management Plan.

Ms McCarthy responded by telling him her version of what had occurred and her “frank views” on the situation at the Hurstville District Office, the people involved, and the manner in which she had been treated there. After she finished, Mr Pratley informed her that, as acting area co-ordinator, his role was to support the district manager and he would be relaying the contents of this conversation to her. This shocked Ms McCarthy as he had not interrupted or warned her beforehand that he intended to relay her comments to Ms Lutherborrow. She claims that had she been warned she would not have continued with what she understood to be a private conversation.

Ms McCarthy was “shocked, anxious and distressed” following the phone conversation with Mr Pratley. She was so distressed by the prospect of going back to her workplace that she suffered “severe anxiety, depression and physical symptoms”. She saw Dr Vidalis who certified her unfit from 21 January 2008 to 25 January 2008. At some stage, Dr Vidalis informed her that he did not handle workers’ compensation cases and she then started seeing Dr Susan Britton.

Mr Pratley prepared a document headed “Report for PCMC Re: Anne McCarthy” on 22 January 2008. The report recounts his telephone conversation with Ms McCarthy on 17 January 2008 when she telephoned about nominations to the union executive. After dealing with that matter, Mr Pratley informed Ms McCarthy that he had another matter he wanted to focus on and that, as the acting area manager, it was an official matter to which he would like her response. She responded “Oh! I guess you are going to talk about what I said before Christmas about Susanne and that I hoped her illness was terminal (laugh). It was a throw away line, she just likes the sound of her own voice and is making big of this…”

Mr Pratley again reminded Ms McCarthy that he was talking to her as the acting area manager and that he wanted to use this opportunity to establish a time on Monday 21 January 2008 when he could meet with her and Ms Lutherborrow. He added that it was not appropriate to discuss the incident over the phone. He “further cautioned her” that a report was already being tabled to the Professional Conduct and Management Committee. Ms McCarthy ignored that caution and “proceeded to dialogue” without his interjection. Mr Pratley made notes of her comments as she spoke and his notes are the basis upon which he prepared his report.

Mr Pratley then reported:

“Officer McCarthy proceeded to state that she was overworked and not coping with the parolee caseload allocated to her and that there had been little understanding or support. That the management team were trying to suggest that; her workload was lower than she perceived. That she was stressed about needing to see parolees via home visit[s] and that she had been running late for the staff meeting on the day in question (17 December 2007). She stated that her daughter, Eli was on leave (school holidays) and that she had run out of food and toilet paper and had to go shopping before reporting for work. On arrival she parked outside in the one hour parking zone, as she feared going onto the parking lot as the only space that was not taken was the District Manager’s and no one dared take that spot.”
On arriving into the reception area of the office (the client waiting area) she stated that she ran into Unit Leader Stuart [sic] McNaughton who asked her if she had received the message that Susanne (District Manager) was sick and that the planned staff meeting had therefore been cancelled. Officer McCarthy stated that she replied by saying: ‘She’s sick! She’s stuffed up my whole morning – I hope its terminal.’ ‘It was a throw away line’.

Officer McCarthy stated that she then proceeded into the main office of the Hurstville District Office where Unit Leader Peter Miller, having heard what had been stated to Unit Leader McNaughton in the reception area of the District Office approached her and challenged her about making this statement and that it was inappropriate and offensive. Officer McCarthy then stated about Unit Leader Miller, ‘That Peter Miller, he runs with the tales…’ Officer McCarthy confirmed that she again stated, ‘Yes, I said I hope its terminal’ confirming that it was repeated loud enough for others to hear and that she didn’t care.
Officer McCarthy stated that she was stressed by Unit Leader Miller’s comment and reaction and that she therefore decided to leave and conduct a parolee home visit. She stated that Unit Leader Miller had problems with her, even that he had had to interview eight of her clients during the Christmas period and that he was annoyed because he had to work! She stated that Unit Leader Miller pursued her to her car and stuck his head through her window to again discuss the incident but that she was not prepared to discuss the matter so drove off.
Officer McCarthy stated that after completing the home visits that she went home and phoned her sister and discussed the matter. She states that her sister advised that she get a medical certificate, stating that she was stressed. Officer McCarthy said, ‘My sister warned me to do this given the statement that I have made’.
Officer McCarthy stated that it was her belief that the management team at the Hurstville District Office were trying to undermine her. That the District Manager had previously tried to stop her from attending the Women’s PSA Conference. That in October just prior to leave she had been given two Pre Sentence Reports to complete with inadequate lead time. That she had been in excess of 170 hours of allocated work according to her use of the ‘OIMs Officer Work Enquiry’ report and that she was furious about emails which she had received from the District Manager which were picking fault with case management. Officer McCarthy stated that she had seen these emails as bullying and harassing and had made reference to the Regional Human Resources Manager with reference to a complaint. That this had not received support which she had expected and that therefore there had not been any formal complaint made. That she had remained in the workplace until nearly 11.00 pm on the Wednesday prior to taking leave to ensure that all outstanding work had been completed.
Officer McCarthy then alluded again to the suggestion of a conspiracy to undermine by the office management stating that, ‘I can’t win… It’s the Pete and Stewie show…they sit in the staff room and make stupid comments…Peter Miller, runs with tales back to Susanne’.”

At this stage Mr Pratley interjected and suggested that the statement (presumably made on 17 December 2007 about Ms Lutherborrow) had been inappropriate and he asked if she had given any further thought to the offence that it had brought and the complaint now been lodged. Ms McCarthy responded “Given that I have a medical certificate for this period I don’t have to say a thing, the certificate covers me…”

Further discussion dealt with the resolution of her mother’s estate, that family members had advised her to resign, getting a loan, and getting another job. She was still stressed about her mother’s death and her father was unwell following a fall. She added, “you need energy to fight these things and I don’t think I can fight these things. They’re trying to get me - yes! I did make a flippant comment but only those little kindergarten people who run with tales can see issue.”

Mr Pratley reminded Ms McCarthy that he had taken notes of the conversation and that the notes would form the basis of a formal report. The worker then became stressed and stated that she thought it had been a confidential conversation. He reminded her that she was required to recommence duties at Hurstville on Monday 21 January 2008 and that an interview would be conducted.

In her response dated 23 March 2009, Ms McCarthy took issue with a number of points in Mr Pratley’s report. In particular, she disputed that he said he had another matter he wanted to focus on and that, as the acting area manager, it was an official matter to which he would like her response. She claimed that he merely told her that he had recently been at the Hurstville District Office and learned that Ms Lutherborrow had lodged a complaint about her behaviour with the Professional Conduct Management Committee. She agreed that she referred to her “flippant comment about Ms Lutherborrow’s illness” and she pointed out that it was a “throw away line”. She also agreed that she related to Mr Pratley the sequence of events on 17 December and that she had returned home in a distressed state and had telephoned her sister.

She had no recollection of Mr Pratley saying that it was not an appropriate matter to discuss on the phone. It was untrue that she ignored his caution because he had given no such caution. She considered this to be a denial of natural justice and an abuse of his position. She denied saying that she could not cope with the parolee caseload, but may well have said that there was little understanding or support from the management team and that her workload was higher then they acknowledged. She also added that she was running late for the meeting (on 17 December) because of commitments with her daughter. She did not recall making the statement “I hope it’s terminal” to Mr McNaughton, but recalled making that comment to Ms Daniel. Mr Miller did not approach her and say that her comment was inappropriate and offensive, as suggested in Mr Pratley’s report.

Ms McCarthy concedes that she “may well have commented on Mr Miller running with tales about me to the District Manager” because that had been her experience of him. She did not, however, recall repeating her comment “about Ms Lutherborrow’s illness” to Mr Miller. She did not recall saying that she repeated the comment loud enough for others to hear her and that she did not care. She stated that it was not true that she was not prepared to further discuss the matter so drove off. She denies that her sister “warned” her. Her sister advised her because she could hear the level of her distress on the phone.

Ms McCarthy does not recall saying that the management team at Hurstville were trying to “undermine” her, but she did complain of their unfair treatment of her. She denied saying that Ms Lutherborrow had tried to stop her attending the PSA Annual Women’s Conference. She doubted that she would have said she was “furious” at Ms Lutherborrow’s emails, rather she said she was distressed. She could not recall using the word “conspiracy” to Mr Pratley, but did comment on the closeness of the two unit leaders, Mr Miller and Mr McNaughton, who called each other “Stewie” and “Mr Pete” and she referred to them as the “Stewie and Mr Pete show”. She felt that, in view of the closeness between Mr Miller and Mr McNaughton, she could not hope to get fair treatment from the management structure at Hurstville. She could not recall saying that they “sit in the staff room and make stupid comments”. She agreed that she observed “the tendency of Mr Miller to ‘run with tales’ to the District Manager” on matters she considered trivial.

Whilst Ms McCarthy had no clear recollection, she agreed that it is likely that she told Mr Pratley about her mother’s death and her father’s fall. She did feel at the time that she did not have the energy to pursue a dispute with the Department. She recalls complaining about Ms Lutherborrow’s frequent absences from the workplace and that she did not appear to work as hard as the probation and parole officers did. She agrees that her work situation was intolerable and she may have said something to that effect.

Mr McCarthy would not describe her conversation with Ms Pratley as a “dialogue” because he said very little other then repeating on a number of occasions that he was the acting area co-ordinator. She denies that Mr Pratley said he was taking notes. She agrees that he told her that, as acting area co-ordinator, his job was to support the district manager and that he would be passing on the contents of the conversation to her. She did not recall Mr Pratley’s closing remarks because she was so distressed by his comment that he intended to pass on her remarks in what she understood to be a personal call. She believed that the investigation process to which she was subjected had been “stressful and unreasonable and in the current work environment it would seem to be bullying and harassing”. This was a quote from an email Mr Pratley wrote in November 2006 in another unrelated matter.

Medical Evidence

Dr Vidalis wrote a referral for Ms McCarthy to Dr Moorthy on 1 July 2006 in which he stated:

“Please review this lady who has had severe anxiety and depressive symptoms stemming from ‘harassment’ at work. She understandably feels distressed and targeted over her work performance despite the fact that she is a single mother and has a sick father under her care.”

Dr Vidalis reported “To Whom It May Concern” on 21 January 2008 in the following terms:

“On the 17 December, 2007 I saw Ms Anne McCarthy in my rooms. She presented in a distressed state and told me that she had encounters that morning at work with her immediate supervisor that she felt amounted to harassment. As a result of this consultation, I gave her a medical certificate from the workplace for the 17^th-18^th December (inclusive).
Ms McCarthy saw me again on the 19^th and 21^st January 2008 with concerns about the situation in her workplace on her return from leave. I have advised her to avoid any situations or encounters of a confrontational nature that are likely to cause her anxiety and be detrimental to her psychological health and physical well being.
After discussions with Anne, it seems evident that her situation at work is ‘hostile’ to her proper functioning and I would recommend an internal transfer to a more supportive environment.
As a consequence of her severe anxiety, depressive state which have been induced by work, I have felt it necessary to refer her to a psychiatrist for further assessment and therapy.”

Dr Vidalis’ clinical notes for 19 January 2008 referred to “severe anxiety & depressed feelings related to work. Patient made a ‘flippant’ remark about other woman which she feels was taken out of context: previously differences…” They also referred to clashes at work.

Because Dr Vidalis did not do workers’ compensation cases, Ms McCarthy saw Dr Britton on 18 February 2008. Dr Britton reported to the insurer on 12 May 2008 that Ms McCarthy was extremely distressed when she first saw her. The worker gave a history of “bullying at work, excessive workload, discrimination and unfair treatment at a time when she had a sudden combination of un-foreseeable personal crises”. Dr Britton also recorded that the worker got behind in her caseload in 2006 and she was quite unfairly criticised by the subsequent district manager. Her mother died suddenly in August 2007 and she felt that criticism at work accelerated and amounted to bullying on her return from bereavement leave. She considered that she was carrying an excessive caseload, but management continued to be critical and unsupportive. She received yet more criticism when she took time off during work hours to have a breast lump investigated.

Ms McCarthy admitted that “occasionally during this overwrought time” she said some “unfortunate things”. She tried to explain that her situation was one of work overload and extreme personal distress but that met with derision and ultimately formal complaint. She was unable to secure a transfer to another office.

By the time Dr Britton examined the worker, she was suffering severe reactive anxiety and depression. She was extremely distressed, emotionally and psychically exhausted, and felt her workplace was hostile. She found the open hostility from some colleagues and from management to be extraordinarily hurtful. She felt harassed by repeated criticism starting from 2006. Dr Britton encouraged the worker to put in a workers’ compensation claim because her illness was “clearly work related”. There was a delay in putting in the claim because the worker was “too emotionally unwell as a result of the persistent criticism and harassment”. She feared further retribution and felt she needed to consider the effect of such a claim on her career.

Dr Britton concluded that the worker suffered anxiety and depression as a result of her treatment at the Department over the previous two years. She felt Ms McCarthy’s workplace had been a significant contributing factor. She stated that Ms McCarthy was unfit for work. The doctor added that Ms McCarthy would prefer to be working, but felt emotionally drained and unable to concentrate on tasks for long enough to work. Ms McCarthy felt that she was unjustly treated in her work at the Department.

Dr Dinnen, psychiatrist, saw Ms McCarthy on 26 February 2008 and reported to the insurer on 7 May 2008. Dr Dinnen took a history of the problems at work. In particular, he noted that she complained her caseload was too high and that her case management had been criticised.

Under “current symptoms”, the doctor noted Ms McCarthy reported “considerable anxiety centered [sic] on the preparation of her 100 page document and her application for compensation”. She said that the preparation of the report was “hideous” and that it took her a number of weeks. Her sleep was reasonable, though she was worried about her father. She felt very tired and sleepy during the day. She did not believe she could go back to work at the Department because it was a “hostile environment”. Relocation to another department or redundancy were possibilities. She wanted to “fight for justice”. She reported having bad dreams about the workplace and lay awake at night worrying about finances.

Dr Dinnen diagnosed Ms McCarthy to be suffering from an adjustment disorder with anxiety symptoms. On the issue of causation, he stated that there were “cumulative issues” and, according to her account, employment was a substantial contributing factor to her diagnosis. The cumulative issues the doctor referred to were “cumulative stressors in the workplace to do with management of cases”. He considered her to be totally unfit for work. He concluded:

“It would seem the patient was given a work load beyond her capacity to cope. She may need to take a less demanding position in the Department of Corrective Services or some other government department if she is to return successfully to the work place. A graduated return to work plan would be advisable”.

Dr Rikard-Bell, consultant psychiatrist, examined Ms McCarthy on behalf of Employers Mutual on 5 May 2008 and reported to the insurer on 8 May 2008. He found Ms McCarthy to be “very intense and serious, long-winded and quite loquacious”. After the assault in 1998, Ms McCarthy worked in head office from 1999 until she returned to her substantive position as a Probation and Parole Officer at Bankstown in 2002. She felt there had been a long history of prejudice and intimidation dating back to her time at Bankstown. She felt that she had not been given adequate consideration whilst she was away having her breast lump investigated. There had been a series of events and misunderstandings and she felt there were “a lot of ill-considered emails and warning letters that were sent to her by her boss Susanne”. She felt this was harassment and bullying. The doctor noted reports and statements by others that they did not perceive the treatment as harassment.

Ms McCarthy provided only a cursory history of the events on 17 December 2007 and the doctor recorded that the worker “made some flippant statement about Susanne” and that she was then reprimanded for her statements. The doctor added, “She was so upset about the reprimands and the build up to this staff meeting that she became sick”. Her superior, Peter Miller, confronted her and told her that he felt she had made an inappropriate statement”. She was so upset that she saw Dr Vidalis who diagnosed anxiety and depression. Since that incident she has had difficulty getting to sleep with middle insomnia. She had lost weight and her mood had been anxious. She felt very distressed.

Dr Rikard-Bell recorded that Ms McCarthy wanted a supportive environment and that she did not feel she could get support at Bankstown. Ideally, she would “prefer to be working in a less stressful environment and doing policy work”. She enjoyed doing policy programs and training.

Dr Rikard-Bell diagnosed Ms McCarthy to be suffering with adjustment disorder with anxiety. He thought her quite capable of participation in employment, though her functioning at work was impaired. He believed that her anxiety was due to significant issues relating to her work environment and that relocating to a new work environment would help her psychiatric condition.

The insurer asked the doctor, among other things, “is Ms McCarthy’s claim regarding employment difficulties reasonable or unreasonable and due to the action on the part of the employer?” The doctor responded:

“In my opinion it is difficult to judge exactly whether the action of the employer has been reasonable or not. I believe that Ms McCarthy is quite obsessional and compulsive in her personality style and therefore she tries to do her work to the absolute best of her ability. This often leads to conflict. She is very critical of herself and others when tasks are not completed at a high level.”

The doctor added that Ms McCarthy’s reaction was in keeping with her obsessional personality style and that she was very sensitive to criticisms. Resolution of the industrial issue was the most effective intervention. There were no other factors contributing to her psychiatric condition, except her personality style. He felt that Ms McCarthy had improved since leaving work, though she was anxious about being forced to return to her previous work environment. He felt that the prognosis was good because he believed Ms McCarthy to be a “dedicated and a focused worker” who wants to do the best she can. He felt that work was a substantial contributing factor to her condition.

On the question of whether the worker was fit for her pre-injury duties, Dr Rikard-Bell stated:

“I believe Ms McCarthy needs a new environment and less demanding duties. I believe that it would be best for her to have some rehabilitation and to reintroduce her work over a period of perhaps a month and then she can resume suitable duties. Ideally, she may be able to also use her skills in another capacity.”

In response to a direction that Ms McCarthy return to work at Bankstown, Dr Britton wrote on 19 June 2008 that the conditions offered at Bankstown were unacceptable. Ms McCarthy felt that her grievance had not been heard and that putting her on a performance management plan, outside the district manager’s office and having to report daily, was effectively blaming her and treating her as though she had been guilty of serious misconduct. On her return to work, Ms McCarthy needed respect and support. Dr Britton felt it would be to everyone’s advantage for Ms McCarthy to be placed in another government department.

Dr Gilandas, clinical psychologist, examined Ms McCarthy for medico-legal purposes on 13 and 20 September 2008. He took a history that she had been overburdened with work and that that was exacerbated by a climate of bullying and harassment by her supervisors. She was allegedly subjected to “hostile and intimidating meetings” with district managers and was presented with a list of her alleged deficiencies, which she experienced as unfair and humiliating.

That Ms McCarthy did not seek medical treatment between 17 December 2007 and 19 January 2008 is not determinative and does not indicate that she had recovered from her injury. This submission again focuses on the events of 17 December 2007 and ignores the long series of events through 2006 and 2007 that caused or contributed to the conceded psychological injury.

It is not disputed that the phone conversation with Mr Pratley was a significant event that caused Ms McCarthy distress and prompted her to see Dr Vidalis. The inference I am invited to draw is that, but for that conversation, Ms McCarthy would have returned to work to work on 21 January 2008 and would have suffered no incapacity. However, the determination of the cause of Ms McCarthy’s unfitness for work from 20 January 2008 depends on an evaluation of all of the evidence and the full history of the matter.

The overwhelming weight of the medical evidence (consistent with Ms McCarthy’s evidence) is that she was unfit for work from 20 January 2008 as a result of the cumulative effect of work events from June 2006 until 17 December 2007 (see, in particular, Dr Dinnen’s evidence at [107] above). The Department never asked Dr Rikard-Bell, or any other medical expert, to comment on the effect of the phone conversation on Ms McCarthy and whether that conversation amounted to a new and independent cause of the incapacity. Dr Rikard-Bell considered that Ms McCarthy’s injury was due to significant issues relating to her work environment.

Mr Hickey effectively invites me to make up for the lack of proper preparation of the Department’s case by drawing conclusions in respect of nexus that are not supported by any credible expert evidence. In the absence of persuasive evidence to the contrary, I accept the evidence from Drs Dinnen, Britton and Rikard-Bell to the effect that Ms McCarthy’s incapacity resulted from the stressors to which she was exposed in the course of her employment between 2006 and December 2007. Notwithstanding some shortcomings in their histories, they provided a “fair climate” for acceptance of their conclusions (Paric v John Holland Constructions Pty Ltd [1984] 2 NSWLR 505 at 509-510).

Whilst it is true that Dr Gilandas referred to Ms McCarthy’s injury having been precipitated by the work stressors “between 2006 – 2008”, he offered no support for the proposition that the incapacity resulted from the 17 January 2008 phone conversation. He clearly based his conclusion on the long history of stressors from 2006. To focus on 17 January 2008 is to look for a proximate cause of the incapacity rather than the whole chain of events that led up to the phone call.

Even if there were any merit in Mr Hickey’s submissions, at best they only support a conclusion that there were multiple causes for Ms McCarthy’s incapacity in January 2008. That does not prevent Ms McCarthy from recovering compensation. It is trite law that a loss can result from more than one cause (ACQ Pty Ltd v Cook [2009] HCA 28 at [25] and [27]; (2009) 83 ALJR 986). The authority of Calman is also instructive on this issue. The Court held (at [38], excluding footnotes):

“Once the appellant established that his underlying anxiety disorder was an injury within the meaning of the Workers Compensation Act, he was entitled ‘to compensation ... under [that] Act’ upon proof that his total or partial incapacity for work resulted from that injury. The question then for the Tribunal was whether the appellant’s incapacity was causally connected to the underlying anxiety disorder. It has long been settled that incapacity may result from an injury for the purposes of workers’ compensation legislation even though the incapacity is also the product of other - even later - causes. Indeed, death or incapacity may result from a work injury even though the death or incapacity also results from a later, non-employment cause. Thus, in Conkey & Sons Ltd v Miller, Barwick CJ, with whose judgment Gibbs, Stephen, Jacobs and Murphy JJ agreed, held that it was open to the Workers’ Compensation Commission to find from the medical evidence in that case ‘that the death by reason of myocardial infarction when it did ultimately occur, ‘resulted’ from the work-caused injury of the first infarction, even if it could not be said that the final infarction was itself caused by work-caused injury.’”

In the present case, the Department conceded that Ms McCarthy received a work related psychological injury. It made that concession after it received and considered the worker’s claim form and medical reports from Drs Britton and Dinnen. Those documents made it clear that Ms McCarthy’s injury and incapacity resulted from the cumulative stressors to which she had been exposed at work from June 2006 until December 2007. Thus, even if a later cause (the phone conversation with Mr Pratley) contributed to Ms McCarthy’s incapacity that does not prevent a finding that the incapacity resulted from the earlier work-caused injury. The Arbitrator wrongly referred to Calman as providing support for the opposite conclusion.

At the appeal hearing, Mr Hickey submitted that there was no need for medical evidence on the nexus issue and that the analysis called for an evaluative process. I agree that a determination on causation requires an evaluation of all the evidence and that it is for the Commission to reach a factual conclusion according to law (South Australian Emergency Commission v Workers Compensation Tribunal and anor [2009] SASC 213 at [59]). In reaching that conclusion, the Commission is not necessarily bound by the medical evidence but will always, depending on the nature of the issue in dispute, give that evidence careful consideration. As observed by McDougall JA (McColl and Bell JJA agreeing) in Nguyen v Cosmopolitan Homes [2008] NSWCA 246 (at [61]), “the inference of causation may be drawn from all of the evidence in the case, including expert evidence as to the possibility that the causal relationship exists.” In a case such as the present, however, where the evidence on the nexus issue is essentially all one way, I am not persuaded that the Department’s position is tenable, let alone true and correct.

I do not accept that the Arbitrator was right to fix on the events of 17 December 2007 and 17 January 2008, and to conclude that the events of 17 January were the predominant cause of the incapacity. The Arbitrator found that the events on 17 December 2007 were “the cause or predominant cause” of the injury (Reasons at [30]) when there was no medical evidence to that effect. He did that on an application of the common sense test of causation referred to in Kooragang. Whilst he was correct to apply the common sense test of causation, he failed to give appropriate weight to the evidence from Drs Dinnen, Britton and Rikard-Bell who all concluded that the worker’s injury and incapacity resulted from the general circumstances of her employment in 2006 and 2007 rather than from the events on 17 December 2007. The events on 17 December 2007 were only one part of a series of stressful events that happened at work over a long period. The overwhelming weight of evidence is that Ms McCarthy’s psychological injury resulted from the cumulative stressors in the work place relating to her workload and conflicts at work over work issues between 2006 and December 2007. Her incapacity resulted from that injury.

The Arbitrator found that Ms McCarthy suffered an aggravation, acceleration, exacerbation or deterioration of her psychological state on 17 January 2008 (referred to by him as having occurred on or about 19 January 2008) and that that event comprised “one injury with that of 17 December 2007”. In circumstances where neither party relied on the incident on 17 January 2008 (either the worker, as a further injury, or the Department, as a defence), and the Department had admitted injury based on the claim form and reports from Drs Britton and Dinnen, that finding was not open. Mr Hickey argued that that finding was appropriate because the Commission could inform itself on any matter (section 354(2) of the 1998 Act). The Arbitrator did not inform himself on a matter, but determined an event that neither party relied on to be an aggravation injury under section 4(b)(ii) of the 1987 Act. Given the issues in dispute, the way the parties presented the case, and the Department’s concession on injury, it was not open to the Arbitrator to make a finding of an aggravation injury as a result of the phone conversation on 17 January 2008.

Given the Department’s reliance on section 11A, it is appropriate that I deal with each of the circumstances said to give rise to this defence, as particularised and argued by Mr Hickey at the arbitration.

It must first be noted that the Department carries the onus of proof in establishing a defence under section 11A (Ritchie v Department of Community Services [1998] NSWCC 40; (1998) 16 NSWCCR 727; Department of Education and Training v Sinclair (2005) 4 DDCR 206; [2005] NSWCA 465).

First, the Department relied on performance appraisal and discipline in respect of the events on 17 December 2007. Ms McCarthy was distressed that she had cancelled appointments to attend a meeting on 17 December 2007. When she was informed that the meeting had been cancelled, she was frustrated and upset. Mr Miller saw that she was “very agitated” and he felt “concern for her”. He approached her car and asked if she was okay. He does not recall saying that he would speak to her later that day, but did say that her comment about the district manager (that she hoped the illness was terminal) was “not appropriate”. Accepting that Mr Miller said he would speak to Ms McCarthy later (though he does not recall making that statement), that does not amount to “discipline” in section 11A, which includes “punishment inflicted by way of correction and training” (Shorter Oxford English Dictionary 3ed; Kushwaha v Queanbeyan City Council [2002] NSWCC 25 at [151]). In these circumstances, the events on 17 December 2007 could not be characterised, on any view, as discipline and section 11A has no application.

Second, the Department relied on performance appraisal and discipline in respect of the meeting in June 2006 when Mr Kearney spoke with Ms McCarthy about her case management and compliance with departmental policies and guidelines. I am satisfied that a review of Ms McCarthy’s work by her superior with a proposal that that work be managed amounted to performance appraisal. I am also satisfied that the action taken, or proposed to be taken, by Mr Kearney with respect to performance appraisal was reasonable. Clearly, there were issues with regard to Ms McCarthy’s case management. The Department was entitled to address those issues. It did so in a perfectly appropriate and reasonable manner.

The next question is whether Mr Kearney’s conduct was the whole or predominant cause of Ms McCarthy’s injury. Acting Deputy President Handley considered the phrase “predominantly caused” in Ponnan v George Weston Foods Ltd [2007] NSWWCCPD 92 and applied the dictionary meaning (at [24]) of “mainly or principally caused”. I agree with that definition and intend to apply it in the present matter. Whilst I accept that Ms McCarthy found the meeting with Mr Kearney to be distressing and that it was one of many factors that contributed to her injury, the Department has called no persuasive evidence, and I am not satisfied, that it was the whole or predominant cause of her injury.

Third, the Department relied on the worker’s reaction to her application to be transferred from the Hurstville office. The defence in section 11A applies if the injury was caused by “reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer” (emphasis added). The emphasised words suggest, as Mr Shoebridge submitted, that the provision only applies to transfers initiated by employers. However, the words “with respect to” make it clear that the section relates to any transfer, whether initiated by the employer or the worker.

This conclusion is consistent with the other provisions in the section. For example, a worker will usually (though not always) initiate a promotion by making an application for a higher position. If the application was unsuccessful, and a psychological injury resulted, an employer would be entitled to rely on section 11A as a defence (assuming its actions were reasonable and the whole or predominant cause of the injury) because its actions in refusing the promotion were actions taken “with respect to promotion”. The same principle must apply with respect to transfers. It does not matter who initiated the transfer. The question is whether the action taken or proposed to be taken “with respect to” the transfer that is alleged to have caused the injury was reasonable and whether the psychological injury was wholly or predominantly caused by that action.

Ms McCarthy sought a transfer from the Hurstville office because she was distressed after a meeting with Ms Lutherborrow on 9 October 2007, which made her feel that she was being bullied and harassed. Ms McDougall, the senior human resources consultant, declined the application after speaking with Ms Windle, the director of human resources. The Department had concerns about performance issues but because of Ms McCarthy’s personal circumstances, decided not to move to address the performance issues at that time. In these circumstances, I find that the Department’s decision not to transfer Ms McCarthy was reasonable action with respect to transfer.

The next question is whether the refusal to transfer Ms McCarthy was the whole or predominant cause of Ms McCarthy’s injury. The Department has called no persuasive evidence on this issue. None of the medical experts have placed any particular weight on this issue in reaching their conclusions as to the cause of Ms McCarthy’s injury. I am not satisfied that the refusal to transfer Ms McCarthy was the whole or predominant cause of her injury though I accept that it was one of many factors that caused her distress and contributed to her injury.

Fourth, the Department relied on performance appraisal and discipline in October 2007 in the context that, being aware of Ms McCarthy’s personal and family circumstances, it did not move to address performance issues. It is unclear exactly what the Department relies on under this heading. There was clearly conflict between Ms McCarthy and Ms Lutherborrow in September and October 2007. There were issues in September 2007 about Ms McCarthy being given two new pre-sentence reports. Ms McCarthy complained to Ms Lutherborrow at a meeting on 9 October 2007 that she was overloaded with work as a result of having been on leave, having ongoing medical investigations, and being heavily booked with clients on reporting days.

I do not believe any of the discussions or emails in September and October 2007 could be classified as either performance appraisal or discipline. They were merely exchanges about Ms McCarthy’s workload and general circumstances. For example, Ms Lutherborrow offered to “negotiate some of the supervision cases”. I do not accept that Ms Lutherborrow’s expectation that Ms McCarthy’s “case management…and case plans” would be “addressed over the next four weeks” (Ms Lutherborrow’s email of 11 October 2007) was either part of a performance appraisal or discipline. It was not a “deadline”, as Ms McCarthy has asserted. Ms Lutherborrow was neither appraising Ms McCarthy’s performance nor disciplining her. She was merely asking her to do her job. It follows that the Department has not established a defence under section 11A in respect of “October 2007”. That the Department did not “move to address” performance issues in October 2007 confirms that Ms Lutherborrow’s actions at that time could not be characterised as performance appraisal or discipline.

After the meeting on 9 October 2007, Ms McCarthy contacted Ms Miliatos and complained that she was being bullied and harassed. I accept that Ms McCarthy found the meeting on 9 October 2007, and contact with Ms Lutherborrow generally, including via email, to be distressing and that she perceived that she was being treated unfairly. Her perception was based on real events and clearly contributed to her injury. I do not accept, however, that Ms Lutherborrow bullied or harassed Ms McCarthy, either on 9 October 2007 or on any other occasion. Ms Lutherborrow merely performed her job as the district manager. Her emails, for example, were always in measured and polite language.

Fifth, the Department relied on discipline and performance appraisal in respect of intervention by Ms Lutherborrow over incidents with Ms Larochelle and Mr Miller in July 2007. Ms Lutherborrow spoke with Ms McCarthy on 18 July 2007 after she received complaints from Mr Miller and Ms Larochelle about the worker’s conduct. The full facts of these events are set out at [44] to [49] above. It is not necessary to analyse them in any depth because there is no persuasive evidence that Ms Lutherborrow’s discussion with Ms McCarthy could be characterised as either performance appraisal or discipline. Ms McCarthy’s performance was not appraised and she was not disciplined. It follows that the question of the reasonableness of Ms Lutherborrow’s conduct does not arise and the defence under section 11A fails. I accept, however, that Ms McCarthy found the episode distressing, that she could not sleep for two nights, and that she saw her doctor.

Last, the Department relied on the item headed “Transfer 2006”. This related to a discussion in 2006 Ms McCarthy had with Mr McNaughton about a proposed restructuring of Community Offender Services. There is no basis on which that discussion could be characterised as action taken or proposed to be taken by the employer with respect to transfer and the reliance on section 11A with respect to it was misplaced. This incident was, however, distressing to Ms McCarthy and caused her to go home in tears.

For the reasons outlined above, the Department has not come close to establishing a defence under section 11A. It has tendered no persuasive evidence that Ms McCarthy’s psychological injury was wholly or predominantly caused by reasonable action taken or proposed to be taken with respect to any of the issues upon which it relied. Ms McCarthy’s injury was caused by “cumulative issues” (Dr Dinnen 7 May 2008) and her “work environment” generally (Dr Rikard-Bell 8 May 2008) with the Department in 2006 and 2007.

It follows that Ms McCarthy is entitled to an award of compensation and I now turn to the assessment of that award.

Weekly Compensation

As per the amendment made at the hearing of the appeal, Ms McCarthy claims weekly compensation from 20 January 2008 to date and continuing for herself and one child, Eliane born on 16 December 1994. She claims total incapacity from 20 January until 8 May 2008, partial incapacity under section 38 from 11 August 2008 until 10 August 2009, and partial incapacity under section 40 at all other times.

Based on the evidence from Ms McCarthy and Drs Britton and Dinnen, I accept that, as a result of the admitted work injury, Ms McCarthy was totally unfit from 20 January 2008 until she saw Dr Rikard-Bell on 5 May 2008. However, from 6 May 2008 (the date she saw Dr Rikard-Bell as opposed to the date of his report) she was fit for work in a “new environment” with “less demanding duties” (Dr Rikard-Bell page 10).

The worker claims compensation under section 38 for 52 weeks from 11 August 2008, the date on which she requested the Department to provide her with suitable employment as per the terms of Dr Rikard-Bell’s report of 8 May 2008 and Dr Britton’s report of 19 June 2008, which she attached to her request. I accept that she requested suitable employment on 11 August 2008 and that the Department declined to provide that employment. The Department’s direction that Ms McCarthy return to work at Bankstown was, to say the least, inappropriate. I also accept that she sought suitable employment on the occasions recorded in her statement of 19 May 2009 and that she has not been suitably employed between 11 August 2008 and 10 August 2009.

Mr Hickey submitted at the arbitration (at T55.55) that the entitlement to compensation under section 38 would have ceased on 13 October 2008 because on that date Dr Britton certified Ms McCarthy unfit for work. At the appeal hearing, he submitted that the entitlement would have ceased on 22 January 2009 because Dr Cohen (general practitioner in the same practice as Dr Britton) certified Ms McCarthy unfit for work on that date. These certificates must be read in the light of Dr Britton’s reports of May and June 2008 that made it clear that Ms McCarthy was fit to return to work, but in a different department. I do not accept Mr Hickey’s submission.

The first 26 weeks of Ms McCarthy’s incapacity (total and partial) ceased on 2 June 2008. She is therefore entitled to receive compensation at 80 per cent of her current weekly wage rate, that is 80 per cent of $1,348.95, which equals $1,079.16. I find that Ms McCarthy is entitled to compensation under section 38 from 11 August 2008 until 10 August 2009 at $1,079.16 per week.

Turning to Ms McCarthy’s entitlement under section 40, the main restriction on her ability to work is that she cannot work “with the persons she identifies as having injured her” (Dr Britton 12 May 2008). Essentially, this means that she cannot go back to work with the Department. I agree with Dr Britton’s assessment that it would be to “everyone’s advantage for Ms McCarthy to be placed in another government department” (Dr Britton 19 June 2008). Dr Gilandas expressed a similar view and added that Ms McCarthy was capable of full-time work if she was given a new start in an emotionally supportive environment that did not hold any traumatic memories of “bullying/harassment” (Dr Gilandas 20 September 2008).

Ms McCarthy is an intelligent and well-educated woman who has many transferable skills. In preparing this case, she demonstrated an ability to collate and assimilate large volumes of information and to recount in great detail events that happened three to four years ago. She told Dr Rikard-Bell that her preference was to work in a less stressful environment doing policy work. I accept that she is fit for work of that kind on a full-time basis, but that her capacity is slightly diminished because of the continuing effects of her injury.

Mr Shoebridge submitted that Ms McCarthy could only earn from $200.00 to $400.00 per week. Mr Hickey did not suggest a figure. I do not accept that the worker’s ability to earn is as reduced as Mr Shoebridge submitted. When she ceased work in 2007, she was a grade 6 clerk. Comparable weekly earnings but for the injury are set out in Part 5 of the Application and are not disputed by the Department. They were $1,297.07 from 17 December 2007 to 30 June 2008 and $1,348.95 from 1 July 2008 to date.

In determining Ms McCarthy’s ability to earn, I have had careful regard to the terms of section 43A of the 1987 Act. In particular, I have had regard to the nature of her incapacity, essentially an inability to return to work with the Department, and the evidence that she is fit for full-time work. I have also had regard to her age, high level of education, skills and work experience. On one view, she could be considered fit for the same grade or position as that which she held with the respondent, but in another government department. If that were so, it could be argued that she has no loss, or only a nominal loss. However, such a finding would not allow for Ms McCarthy’s reduced ability to engage in stressful work or stressful work environments, or the fact that the Department has not provided an injury management plan or rehabilitation training. Taking all matters into account, I believe that at all times since 5 May 2008 Ms McCarthy has been fit for full-time work as a senior clerk or senior administrative assistant earning $1,000.00 per week.

Deducting $1,000.00 from the agreed probable earnings but for injury gives a difference of $297.07 for the period from 6 May 2008 to 30 June 2008, $348.95 from 1 July 2008 to 10 August 2008 and from 11 August 2009 until 15 March 2011.

The parties agreed at the appeal hearing that, Ms McCarthy having recently turned 64, is only entitled to weekly compensation until 15 March 2011 (section 52 of the 1987 Act).

Mr Hickey submitted that, because of the incident on 17 January 2008, I should use the section 40 discretion to reduce any difference between probable earnings and ability to earn. He cited no authority in support of his submission.

The leading authority on the exercise of the discretion is Australian Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50 where McHugh JA (as his Honour then was) (Kirby P and Mahony JA agreeing) stated at 54F-55A:

“The third step in the process requires the Compensation Court to look at the circumstances of the case. The weekly payment awarded must bear such relationship to the differential amount – which is the result of the exercise under the first and second steps – as under the circumstances of the case is proper. This third step therefore calls for the exercise of a judicial discretion of a kind with which courts have long been familiar.
It is at this stage that the Compensation Court can and must examine all the facts. The matters which can be examined include such matters as retirement, other supervening illnesses or injuries, the personal employment history of the worker, and so on.” (emphasis added)

Applying this statement of principle I do not accept that there are any grounds that justify the exercise of the discretion in the present matter. Having found that Ms McCarthy’s incapacity resulted from her accepted psychological injury and having carefully considered Ms McCarthy’s personal employment history and other circumstances, including the incident on 17 January 2008, I am comfortably satisfied that the figures set out at [178] are “proper in the circumstances of the case” (section 40(1)). The incident on 17 January 2008 was not a supervening illness or injury. If it was, I do not accept that it made any material difference to Ms McCarthy’s capacity to earn.

CONCLUSION

Having conducted a review on the merits, I have determined that the Arbitrator erred in his approach to the matter and that the true and correct position is that, as a result of Ms McCarthy’s admitted psychological injury, she was incapacitated for work from 20 January 2008 to date and continuing and that she is entitled to an award of compensation as set out below. As Ms McCarthy has reached the retirement age for females, her entitlement to weekly compensation ceases on 15 March 2011.

DECISION

The Arbitrator’s determination of 2 November 2009 is revoked and the following orders made in its place:

(a) The respondent employer is ordered to pay to the applicant worker weekly compensation as follows:
(i)on the basis of total incapacity under section 36 of the Workers Compensation Act 1987 (‘the 1987 Act’) from 20 January 2008 until 5 May 2008 in the sum of $1,297.07 per week;
(ii)on the basis of partial incapacity under section 40 of the 1987 Act from 6 May 2008 until 30 June 2008 in the sum of $297.07 per week and from 1 July 2008 to 10 August 2008 in the sum of $348.95 per week;
(iii)on the basis of partial incapacity under section 38 of the 1987 Act from 11 August 2008 until 10 August 2009 in the sum of $1,079.16 per week, and
(iv)on the basis of partial incapacity under section 40 of the 1987 Act from 11 August 2009 to date and continuing in the sum of $348.95 per week.

(b)     The respondent employer is to pay the applicant worker’s hospital and medical expenses under section 60 of the 1987 Act.
(c)     It is noted that, under section 52 of the 1987 Act, the applicant worker’s entitlement to weekly compensation ceases on 15 March 2011.
(d)     The respondent employer is to pay the applicant worker’s costs. The matter is certified as complex and costs under Table 1 are increased by 30%.”

COSTS

The respondent employer is to pay the appellant worker’s costs of the appeal, assessed at $2,200.00 plus GST.

Bill Roche
Deputy President

22 March 2010

I, TUYET WALLIS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE