Milo v Arnotts Biscuits Ltd

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Milo v Arnotts Biscuits Ltd [2025] NSWPIC 88
APPLICANT:	Leoncio Milo
RESPONDENT:	Arnotts Biscuits Limited
MEMBER:	Brett Batchelor
DATE OF DECISION:	17 March 2025
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987; claim for permanent loss compensation pursuant to section 66 as a result of psychological injury arising out of or in the course of the applicant’s employment with the respondent; the respondent defended the claim relying on section 11A claiming that the conceded psychological injury suffered by the applicant was as a result of reasonable action taken against him with respect to discipline and/or dismissal; Held – the actions of the respondent with respect to discipline and dismissal were not the whole or predominant cause of the applicant’s psychological injury; applicant suffered primary psychological injury arising out of or in the course of his employment with the respondent; matter remitted to the President for referral to a Medical Assessor for assessment of permanent impairment as a result of such injury.
DETERMINATIONS MADE:	The Commission determines: 1. The applicant sustained primary psychological injury deemed to have occurred on 5 October 2022 arising out of or in the course of his employment with the respondent. 2. The matter is remitted to the President for referral to a Medical Assessor for assessment of psychological injury deemed to have occurred on 5 October 2022. 3. The documents to be referred to the Medical Assessor are: (a) Application to Resolve a Dispute and attached documents; (b) Reply and attached documents; (c) Application to Lodge Additional Documents dated 6 February 2025 and attached documents, and (d) Application to Lodge Additional Documents dated 7 February 2025 and attached documents. A brief statement is attached setting out the Commission’s reasons for the determination.

STATEMENT OF REASONS

BACKGROUND

Leoncio Milo (the applicant/Mr Milo) commenced work as a casual employer with Arnotts Biscuits Limited (the respondent/Arnotts) in about 1991. He became a machine operator and mixer in 1992, and continued in such employment until he resigned on 5 October 2022.
As at September 2022 the applicant’s manufacturing manager was Simar Dhanano (Simar), his line leader Ben Morgan (Ben), and acting line leader Mulita Chakamanon (known as Candy).
The applicant’s duties included operating mixing machines, forming, baking, and relieving the operators. His normal working hours were eight hours on day shift, from 7.00am until 3.00pm. There was an obligation to attend work about 6.30am to sign on and engage in a pre-shift meeting before starting work.
Mr Milo describes the physical aspects of his duties which involved repetitive and extensive lifting and carrying of product required for the manufacture of Arnotts biscuits. From June 2022 until September 2022 he requested and received physiotherapy treatment due to intrusive shoulder, neck, and back pain. This treatment coincided with the introduction of “new product” in July 2022.
On the morning of 9 September 2022 the applicant’s duties included relieving operators, and he spoke to “Clarence”, asking him to relieve two of the mixers, “Gerry” (Gerry Erminato) and “Mustafa” (Mustafa Vurguntas). Mr Milo then went for his tea break into the tea room, followed by Mustafa, who wanted to be relieved. A conversation between the two ensued.
Mustafa left the tea room and returned about 10 minutes later accompanied by Gerry. A verbal exchange occurred between Mr Milo and Gerry, which culminated in Gerry swearing at Mr Milo, who reacted by hitting Gerry on the torso. The applicant claims that he reacted instinctively as he saw Gerry’s hand move towards him after being sworn at, and he was scared Gerry was about to hit him. The applicant says that he apologized for his actions.
The applicant was subsequently spoken to by Sima, the manufacturing manager. A report was made to “Belinda” (Belinda Magrtizer, People and Culture Business Partner) in HR, and to line leader Ben.
Both the applicant and Gerry were sent home in the afternoon of 9 September 2022, and the applicant has not worked since that day.
Ben and Belinda investigated the incident that occurred in the lunch room. Stand down letters were issued to Mr Milo and Gerry. Ben and Belinda interviewed witnesses to the incident on 12 September 2022, Gerry on 14 September 2022, and the applicant on
15 September 2022.
The applicant attended the meeting with Ben and Belinda on 15 September 2022 accompanied by two support persons, at least one of whom was a representative of the NUW union.
The findings of the investigation into the incident were that:
(a) the allegation of inappropriate behavior on the part of Gerry, namely that he swore at the applicant in the tea room, accused him of being a liar, and pointed aggressively in his face, was substantiated, and
(b) the allegation that the applicant physically assaulted Gerry in the tea room by punching him in the chest was substantiated.
The conclusion of the investigation was that the recommendations to be considered were:
(a) that Gerry be given a first and final warning for breach of the Code of Business Conduct and Ethics and support to improve behaviour in the future, and
(b) that the applicant be asked to show cause for gross misconduct.
On 16 September 2022 Simar, the manufacturing manager, wrote to Mr Milo requiring him to attend a further meeting on 23 September 2022 to show cause as to why his employment with Arnotts should not be terminated. The applicant responded in writing to this letter on
29 September 2022, although the letter itself was undated.
The applicant attended a further meeting on 5 October 2022 with Belinda and Simar. Mr Milo was accompanied by two union support representatives and the union organizer. During the meeting the applicant was advised that his employment would be terminated due to serious misconduct. Mr Milo and the Union requested that Arnotts accept a resignation instead.
Mr Milo resigned in writing with immediate effect on 5 October 2022.
On 21 November 2022 the respondent’s insurer, icare, provisionally accepted liability for weekly payments and treatment expenses claimed by the applicant as a result of “Adjustment disorder with other symptoms” with a specified date of injury of
[1] Application to Resolve a Dispute (ARD) p 1.
9 September 2022.[1]
On 19 January 2023 the applicant was independently medically examined by Dr Murphy, consultant forensic psychiatrist, at the request of icare. Dr Murphy produced a report dated 31 January 2023 in which he expressed the opinion that Mr Milo had pre-existing problems with his health in the form of a diagnosis of major depressive disorder recurrent with severe psychosis. The doctor said that the managerial action taken by Arnotts caused a significant worsening of Mr Milo’s pre-existing depression, and that he “developed severe problems with anxiety and mood, meeting the DSM-5 criteria (Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition) criteria for 296.33 major depressive disorder recurrent severe without psychosis (aggravation of pre-existing condition).”[2]
[2] Reply p 197.
Dr Murphy produced supplementary reports dated 27 February 2023,[3] and 11 April 2023.[4]
[3] Reply p 209.
[4] ARD p 212.
On 26 April 2023 icare issued to the applicant a notice under s 78 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) containing a denial of liability for the injury referred to in [15] above.[5]
[5] ARD p 8.
On 8 June 2023 the applicant was independently medically assessed by Dr Kumagaya, consultant psychiatrist, at the request of his solicitors. Dr Kumagaya produced a report of that date containing a diagnosis of the applicant suffering from major depressive disorder with anxious distress, with an onset of such injury in May 2022 in the context of problems experienced at work.[6]
[6] ARD p 226.
On 22 June 2023 the applicant requested a review of icare’s s 78 notice dated
[7] ARD p 13.
[8] ARD p 306.
[9] ARD p 308.
26 April 2023,[7] supported by the report of Dr Kumagaya dated 8 June 2023 and reports from Mr Carl Nielsen, psychologist, dated 18 May 2023,[8] and Dr Lim, the applicant’s treating general practitioner and Nominated Treating Doctor (NTD), dated 30 May 2023.[9]
On 22 June 2023 the applicant claimed lump sum compensation pursuant to s 66 of the Workers Compensation Act 1987 (the1987 Act) in respect of 19% whole person impairment (WPI)[10] as assessed by Dr Kumagaya in a second report dated 8 June 2023.[11]
[10] ARD p 20.
[11] ARD p 242.
On 6 July 2023 icare issued to the applicant a review outcome affirming the denial of liability contained in the s 78 notice dated 26 April 2024 and the respondent’s reliance on s 11A(1) of the 1987 Act in defence of the applicant’s claim. Icare noted that it relied on actions taken by the respondent with respect to discipline and/or dismissal pursuant to that section of the 1987 Act.[12]
[12] ARD p 14.
On 19 December 2023 icare issued to the applicant a s 78 notice containing a denial of liability for the applicant’s claim for lump sum compensation.[13]
[13] Reply p 173.
The applicant commenced the current proceedings by way of the ARD lodged
12 November 2024 to which icare responded with the Reply lodged 3 December 2024.
The ARD contains claims for weekly benefits, medical expenses, and lump sum compensation, based on both physical injury to the lumbar spine, cervical spine, left shoulder and right shoulder, and psychological injury, all claimed to have been sustained by Mr Milo on a deemed date of injury of 5 October 2022.
The matter was the subject of a preliminary conference on 10 December 2024, following which the following Directions and Notations were issued:
“1.     The date by which notices for production dated 3 December 2024 issued by the respondent to the applicant, and dated 13 November 2024 issued by the applicant to the respondent, are to be complied with is extended to 24 December 2024.
2. The respondent has leave pursuant to s 289A of the Workplace Injury Management and Workers Compensation Act 1998 to put in issue the applicant’s claim of injury to the left shoulder pursuant to s 4 of the Workers Compensation Act 1987 (the 1987 Act).
3.     The matter is stood over for conciliation/arbitration to 10:00AM on 12 February 2025 via video conference.
4.     The applicant is to attend at his solicitor’s office or counsel’s chambers for the conciliation/arbitration.
Notations
A.    The parties agree that the applicant’s pre-injury average weekly earnings are $2,318.10.
B.    The respondent may seek to amend the date of injury relied upon by the applicant to correspond with the first date of the applicant’s incapacity.
C.    The respondent relies upon ‘discipline’ and ‘dismissal’ in its defence of the applicant’s claim pursuant to s 11A(1) of the 1987 Act.”
At the conciliation conference on 12 February 2025, no resolution of the applicant’s claims was reached. The matter accordingly proceeded to arbitration hearing. It was agreed between the parties that the applicant’s claim for psychological injury should be determined first, in the context of the onus on respondent to prove the s 11A defence. The respondent concedes that the applicant has sustained psychological injury, but claims that such injury was caused by the reasonable actions it took against Mr Milo with respect to discipline and/or dismissal.

ISSUE IN DISPUTE

Was the psychological injury claimed to have been suffered by the applicant on
5 October 2022 caused by the reasonable actions it took against the applicant with respect to discipline and/or dismissal?

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION

I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.
Notwithstanding direction [4] set out in [26] above, the applicant did not attend at his solicitor’s office or counsel’s chambers for the conciliation/arbitration. I was unable to speak to Mr Milo, who it appeared was attending the conciliation/arbitration using a mobile phone. Shortly after the arbitration hearing commenced Mr Milo became disconnected from the video conference. In his absence, I was informed by his legal representatives that he was becoming upset with the process. Having regard to these matters, and some other technical difficulties experienced with the video and audio connection, I determined that the matter should proceed by way of written submissions.
A short transcript of what occurred before the direction for written submissions was issued has been taken out and is available to the parties on request.
Mr T Hickey appeared on behalf of the applicant, briefed by Ms Azer. Mr Stiles appeared for the respondent briefed by Ms Wrigley. A representative of EML, which managed the claim on behalf of Arnotts, also attended.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Personal Injury Commission (Commission) and considered in making this determination:
(a)    Application to Resolve a Dispute and attached documents;
(b)    Reply and attached documents;
(c)    Application to Lodge Additional Documents dated 6 February 2025 lodged by the respondent with 216 pages of attachment documents (respondent’s late documents);
(d)    Application to Lodge Additional Documents dated 7 February 2025 lodged by the applicant with 50 pages of attached documents (applicant’s late documents);
(e)    respondent’s written submissions dated 14 February 2025;
(f)    applicant’s written submissions dated 25 February 2025, and
(g)    respondent’s written submissions in reply dated 4 March 2025.

Oral evidence

There was no application to adduce oral evidence or to cross-examine the applicant.

SUBMISSIONS

Written submissions have been received from the parties. In view of the onus on the respondent to prove the issue referred to above at [28], the respondent made its submissions first. A summary of the parties’ submissions is as follows.

Respondent

By way of background, the respondent gives a brief outline of the applicant’s case, noting the agreement between the parties to defer determination of Mr Milo’s claims for compensation as a result of physical injuries alleged to have been sustained as a result of the nature and conditions of his employment with the respondent.
The respondent notes that if the applicant succeeds in relation to the claim in respect of the primary psychological injury, he will be referred to a Medical Assessor for assessment of permanent impairment. If the s 11A defence is successful, there will be no need for any such referral and the matter will be relisted for further preliminary conference with a view to dealing with the allegations in respect of physical injury and the claim for weekly compensation.
The respondent refers to the s 78 notice dated 26 April 2023, the s 287A review notice dated 6 July 2023, and the further s 78 notice dated 19 December 2023.
The respondent accepts that the applicant suffered psychological injury arising out of or in the course of his employment with the respondent. Both Dr Murphy and Dr Kumagaya have diagnosed a major depressive disorder.
The respondent’s case is that the whole or predominant cause of that psychological injury was the reasonable action taken/proposed to be taken in relation to discipline and dismissal relating to events that occurred in the workplace on 9 September 2022.
The respondent foreshadows that the applicant will seek to argue that there was a history of stressors and psychological symptoms dating back before 9 September 2022. However, the respondents submits that once the objective evidence is considered, it will be clear that there is no support for the applicant’s contention that any of those earlier issues were causative of the psychological injury.
In respect of the s 11A defence, the respondent submits that what occurred on
[14] ARD p 46.
[15] ARD pp 96-100.
9 September 2022 is largely uncontroversial. The respondent summarises what occurred with reference to the applicant’s statement dated 16 November 2022,[14] and [43] thereof as well as the investigation records prepared by the respondent relating to the subject incident.[15]
The respondent summarises details of the applicant’s evidence of the confrontation that occurred between him, and Gerry and another colleague. This became a heated exchange and ultimately resulted in Mr Milo striking Gerry in the chest area, a matter which is conceded by Mr Milo. The respondent notes that no dispute has been raised in the applicant’s evidence regarding the circumstances in which the incident occurred, with Mr Milo telling his employer during the investigation that he regretted hitting Gerry.
The respondent submits that the investigation undertaken by the respondent is consistent with the respondent’s Anti-Harassment, Bullying and Discrimination Policy, and the reference under “Policy Summary” to “violence” being deemed to be “Unacceptable Conduct”.[16]
[16] Applicant’s late documents p 30.
The respondent refers to the Anti-Harassment, Bullying and Discrimination Procedures and Appendix which sets out the processes in more detail, and that “Actions Arising From The Investigation Process” can include disciplinary action resulting in termination.[17] The respondent notes that there is evidence that the applicant was aware of these processes and procedures as he confirmed his attendance at an Anti-Harassment training session.[18]
[17] Applicant’s late documents p 41.
[18] Applicant’s late documents p 49.
The respondent summarises the process of investigation it undertook as a result of what can only be described as the applicant’s “unacceptable conduct” under the policy, such investigation in accordance with such policy. This commenced with a letter from the respondent to the applicant dated 9 September 2022 confirming that Mr Milo was being stood down from his position pending an investigation.[19]
[19] ARD p 160.
The minutes of the meetings which took place between the respondent’s representatives and witnesses to, and participants in, the incident over the period from 12 September 2022 to
[20] ARD pp 79-96.
[21] ARD p 166.
[22] ARD p 96.
15 September 2022 are referred to.[20] The letter to the applicant dated 12 September 2022 indicating that a meeting with him was to take place regarding the incident is referred to,[21] such meeting occurring on 15 September 2022.[22]
A Confidential Investigation Report dated 15 September 2022, confirming that the allegations against the applicant and Gerry had been substantiated, was prepared, which noted that Gerry was to be issued with a first and final warning letter, and that the applicant was to be asked to show cause for gross misconduct.[23] The show cause letter was issued to the applicant on 16 September 2022,[24] which produced a response from Mr Milo (undated).[25] While the respondent notes that Mr Milo in that letter cited stress outside the workplace that was associated with personal issues that had affected his mental health, it also notes that nothing was raised by the applicant therein in relation to any alleged past history of psychological issues or symptoms due to employment related factors.
[23] ARD p 102.
[24] ARD p 168
[25] ARD p 163.
The respondent notes that when it ultimately indicated its intention to terminate the applicant’s employment, he asked that he be permitted to resign from his position and he submitted his resignation letter on 5 October 2022.[26]
[26] ARD p 170.
The respondent quotes the cause of psychological injury deemed to have occurred on
5 October 2022 as set out on the ARD Form 2, which makes reference to longstanding issues in the workplace respecting staff shortages and relief from mixing and forming machines causing tension between workers. This ultimately led to the altercation on
9 September 2022, and the forced resignation from employment by the applicant.

In terms of the allegations of “long standing issues” the respondent submits that there is no treating medical evidence to suggest that the applicant ever complained of any work related psychological symptoms to any treating doctor, nor obtained any treatment for any work related psychological issued, prior to the incident on 9 September 2022.
The respondent notes that from the reports it obtained from Dr Murphy, commencing with that dated 31 January 2023, the doctor recorded a history that in April 2022 the applicant was seeking psychological treatment from his general practitioner and the EAP (Employees Assistance Programme) in relation to marital issues. Reference was made to “Long standing friction” regarding breaks at work, however there was no suggestion that Mr Milo ever sought treatment, or complained of psychological symptoms, relating to those issues. Dr Murphy expressed the view that the applicant suffered a mental health collapse following his alleged forced retirement, and went on to diagnose a pre-existing major depressive disorder dating back to April 2022 in the context of marital distress, and managerial action resulting in a significant worsening of his condition.
In his further report dated 27 February 2023 Dr Murphy stated that there are a multitude of factors that contributed to the applicant’s psychological condition but the disciplinary action was the tipping point in his mental health. In a further report dated 11 April 2023, Dr Murphy confirmed that the managerial action was the predominant cause of the applicant’s psychological condition.
In his statement dated 25 October 2024 the respondent notes that the applicant asserts that he was experiencing psychological symptoms due to long standing issues prior to
[27] ARD p 178.
9 September 2022. However he does not state he sought treatment or attended upon any doctor in relation to these alleged symptoms. Indeed the respondent notes that it did not cause him to reduce or change his hours and he continued to work without restriction up until 9 September 2022.[27]
The respondent notes that the applicant acknowledges some marital difficulties in April 2022, but maintains that they were not the cause of his psychological condition. The respondent submits that is inconsistent with what did, in fact, occur. There is no evidence to suggest that the applicant ever sought treatment for the alleged work related stressors prior to the incident of 9 September 2022. It is however clear that he did seek psychological treatment for marital stressors. Despite this, the respondent notes that Mr Milo seeks to maintain that those marital stressors were not a factor that contributed to his psychological condition, and that his condition is entirely due to work related issues. The respondent submits that the Commission would not accept that contention on the evidence.
The respondent refutes the applicant’s assertion that to terminate his employment was harsh. The respondent submits that is exactly what the case is all about. The respondent’s position is that the incident in which Mr Milo was involved on 9 September 2022 was a serious one, being a physical assault on a colleague, and it was appropriate that disciplinary action was contemplated and taken.
The respondent submits that the incident of 9 September 2022 was appropriately and properly investigated, with the applicant having conceded that his conduct was wrong and knowing that the potential disciplinary action could include termination of employment. Whilst the applicant was prepared to acknowledge this during the course of investigation, it is clear that he is unhappy with the action that was taken.
The respondent says that the evidence clearly indicates that the predominant cause of the applicant’s major depressive disorder was the action taken by the respondent in relation to discipline and dismissal. It was from that point that he sought treatment in relation to psychological symptoms. There is no evidence of him previously seeking treatment, or having time off because of work related stressors. The respondent submits that the correspondence by Mr Milo to the respondent as part of his “show cause” submission suggested he had always been happy at work, and enjoyed working for the respondent. This is not consistent with what the applicant now seeks to assert.
The respondent notes that the applicant was working without restriction up to the incident on 9 September 2022. There is no evidence that he was ever diagnosed with a psychological condition relating to his employment prior to that point, or that he ever sought treatment in relation to any psychological symptoms relating to employment up until that date. The only evidence of prior psychological symptoms or treatment is related to marital issues he was experiencing in or about April 2022.
The respondent submits that Dr Murphy provides support for the conclusion that the action taken by the respondent in relation to discipline and dismissal was the predominant cause of the applicant’s condition. The respondent submits that the Commission would accept that evidence and conclude that the applicant’s psychological condition was predominantly caused by the action taken by the respondent in relation to discipline and dismissal.
In terms of reasonableness, the respondent submits that there was nothing unreasonable in the respondent’s approach in dealing with what was a serious workplace incident. There was a policy in place (of which the applicant was aware) dealing with unacceptable conduct, and the respondent adhered to that policy and the procedures contained therein. The investigation was objectively fair, and the applicant was given the opportunity to provide his version of what occurred and then, once the allegations against had been substantiated, to show cause why he should not be dismissed.
The respondent submits that it concluded that applicant’s conduct constituted gross misconduct. This was a reasonable conclusion in the circumstances, as it would be in any workplace if a worker struck a co-worker. As a result of that gross misconduct, the decision was made that the applicant’s employment was to be terminated. The respondent maintains that the disciplinary process and action, leading to the applicant’s resignation, was reasonable action in the circumstances.
The respondent submits that the claim in respect of primary psychological injury should fail under s 11A and that there should be an award in favour of the respondent.
The order proposed by the respondent is an award in favour of the respondent in respect to the allegation of primary psychological injury.

Applicant

The applicant provides a background to the dispute, noting that he sustained a major depressive disorder with anxious distress as a result of ongoing longitudinal problems with staff shortages, interpersonal [sic, disputes?] amongst staff due to staff shortages, and ongoing issues with staff relief procedures ultimately culminating in an altercation involving the applicant, Mustafa, and Gerry.
The applicant notes that the respondent relies on a defence to his claim pursuant to s 11A of the 1987 Act in respect of actions regarding “dismissal” and/or “discipline”, and that the respondent does not deny that the applicant has suffered a psychological condition that has arisen out of, or in the course of, employment.
The applicant refers to his statement provided to the respondent’s factual investigator on
2 November 2022 (signed by the applicant on16 November 2022), less that one month after the deemed date of injury, which sets out the commencement of his employment in 1991 and an outline of his duties in the course of his employment.
The applicant submits that this statement was clearly drafted in the context of the respondent investigator seeking information in relation to the altercation event and with a person who speaks English as a second language. Notwithstanding these facts, the applicant still raised longstanding issues in the workplace, and noting “depression because of longstanding relieving and forming issues”.[28]
[28] Applicant’s statement dated 16 November 2022 at [58], ARD p 55.
The applicant refers to his subsequent statement dated 25 October 2024,[29] which contains reference to the earlier statement and the issues set out in the earlier statement in respect of long standing staff shortages, workers’ relieving issues, and the altercation on
[29] ARD p 178.
9 September 2022. The applicant confirms that he had raised these issues with Simar and Tim without success.
The applicant notes that he confirmed in his statements the feelings of anxiousness, depression, and stress, and sleeplessness, causing an impact on his mental health, and that he had made complaints about these matters. Mr Milo concedes that there were issues in marriage, largely due to his taking stress home from the work place.
The applicant refers to the series of text messages between himself and Assistant Supervisor Mulita Chakamanon (known as “Candy”),[30] which contained reference to issues of concern, including workflow processes, staffing issues, job allocation and movement, ongoing arguing in the workplace, and staff happiness. The applicant says that, at the urging of Mr Chakamanon, these were raised with Ben and Simar.
[30] Commencing at ARD p 182.
None of the forementioned material is traversed by the respondent. The applicant submits that, at best, Mr Chakamanon appears to downplay some of his interactions with the respondent, remaining silent on text messages and indicating that he had not complained on “bullying or harassment”, despite Mr Milo having texted him that he was anxious, stressed and depressed, and that arguments had been occurring in the workplace. The applicant notes the concession by Mr Chakamanon of his (the applicant’s) complaints about breaks, and who was getting long breaks and not returning therefrom on time.[31]
[31] Statement dated 21 November 2022 (Chakamanon statement), ARD p 73 at [19].
The applicant refers to the statement of Simar Dhanoa dated 9 December 2022.[32] The applicant submits that Mr Dhanoa did not expressly deny that the applicant had previously made complaints to him, but acknowledged that changes had occurred in March 2022 with regard to the mixing platform, and that issues had been made with relief arrangement. Complaints were also made about an unnamed staff member who had been engaged in bossy and intimidating conduct with other employees, with Mr Milo identifying him as being disrespectful also in team meetings.
[32] Reply p 147 (Dhanoa statement).
The applicant notes that there is no statement from “Tim”, identified as having been a member of management to whom the applicant had also complained.
The applicant refers to the statement of Belinda (referred to above at [7]), dated
[33] ARD p 59.
21 November 2022.[33] She confirmed that Mr Milo had not been previously counselled for work performance not been the subject of any compliant regarding repetition of causing discomfort in the workplace, but did acknowledge that there had been friction in the past between the applicant and Gary.
The applicant refers to the statement of Ben, Team Leader, dated 16 November 2022,[34] who denied having any knowledge of friction before the incident of 9 September 2022. The applicant submits that this is difficult to accept having regard to the other evidence referred to above, ant the seemingly general knowledge in the workplace of ongoing issues, and the fact that he was the Team Leader.
[34] ARD p 66.
The applicant submits that it is inexplicable, given the nature of the s 11A defence, and the allegation made in relation to ongoing issues in the workplace involving Mr Vurguntas and Gerry (Mr Erminato), no statement evidence is forthcoming from these two persons. Instead, the respondent seeks to rely on the interview notes from Gerry that are unsigned and does not address any background history. The interview note of Mr Vurguntas, whilst signed, does not constitute a statement for the current proceedings, and does not respond to the background history.
The applicant submits that caution should be exercised in terms of the evidence of Gerry as it does not constitute statement evidence and is unsigned. Reference is made to rule 73 of the Personal Injury Commission Rules 2021 and what is said in South Western Sydney Area Health Service v Edmonds[35] in respect of probative value. The applicant submits that there is no probative value in the evidence of Gerry.
[35] [2007] NSWCA 16 (Edmonds) at [127]-[131]
The applicant submits that to the extent that any weight can be placed upon the interview notes of either individual, the documents make plain that:
(a) Gerry was swearing at Mr Milo and had to be physically restrained, such was his demeanour, and
(b) there had been previous animosity between Gerry and Mr Milo.
According to the applicant, that is the only weight that can be attached to the documents.
The applicant submits that in the context of the evidence in the claim, it is patently obvious that there were longstanding issues at play leading to the confrontation that occurred. The evidence is consistent with there being issues with Gerry and Mr Vurguntas in terms of the applicant’s complaints in the past. The applicant submits that the prior issues involved disunity, aggression and workload, and the approach of both Gerry and Mr Vurguntas in their accosting the applicant on this occasion is consistent with that prior conduct.
The applicant refers to the note of the interview of Mr Michael Ha dated
12 September 2022.[36] Mr Ha describes Mr Vurguntas coming into the “team” room to see
[36] ARD p 92.
Mr Milo, then leaving and returning with Gerry. Mr Ha describes both Mr Vurguntas and Gerry attending and starting yelling, with Gerry being very upset, very angry, and swearing at the applicant. Consistent with Mr Milo’s evidence, Mr Ha describes Gerry and Mr Milo both pushing each other, not seeing who pushed first, a push in the chest area for both, not being able to recall if it was a closed fist or open fist, and that it was with two hands.
Turning to the medical evidence, the applicant refers to the clinical record of him seeing his treating general practitioner on 14 November 2022 [sic, 2 November 2022],[37] who recorded a brief history of the problems with threats from co-workers due to ongoing issues with relieving workers from the machines, lack of support from management, relieving workers from mixing and forming machines for 12 months, and the incident of 9 September 2022.
[37] ARD pp 428-429.
The applicant notes to the referral by the treating general practitioner to a psychologist on
[38] ARD p 426
16 November 2022,[38] with the similar history to that noted immediately above. In fact, what appears at ARD pp 425-428 is a report of Carl Nielsen, psychologist, who diagnosed Mr Milo as suffering from adjustment disorder with depressed and anxious mood, with features of post-traumatic stress disorder.
The applicant notes the report of his general practitioner, Dr Lim, dated 30 May 2023,[39] in which he outlined the background history confirming that the applicant was involved in an incident at work on 9 September 2022 when he was threatened by co-workers in the context of ongoing issues relieving workers from work machines. A lack of support was also noted in that regard.
[39] ARD p 308.
The applicant then refers to the report of the independent medical examiner, Dr Kumagaya, who carried out an examination on 8 June 2023 and produced a report of that date, referred to above at [19], noting the history of workplace problems experienced by Mr Milo from 2021.
The applicant submits that in terms of the position adopted by the respondent with respect to s 11A and the opinions of Dr Murphy, the independent medical examiner retained by the respondent, Dr Kumagaya provides a reasoned response in which he confirms that the failure of Dr Murphy to deal with the ongoing longitudinal stressors means that he has not engaged with a full analysis of the causative factors. Dr Kumagaya expresses the opinion that the workplace symptoms first experienced by Mr Milo were only worsened by the events of 9 September 2022, events that were directly a result of the same longitudinal workplace stressors that he had experienced for at least the previous 12 months.
The applicant submits that Dr Murphy’s failure to engage with the known ongoing issues in the workplace prior to the management action leading to the altercation on
9 September 2022 poses a difficulty in accepting his opinion. That failure was significant in the context of the reported complaints and history reported by the applicant in his original statement. Therefore the Commission cannot place any weight on the opinion.
The applicant refers to his evidence of what occurred leading up to 9 September 2022, noting that those matters arose in a pre s 11A setting. These are matters that the applicant communicated as being causative of his condition, the symptoms of which manifested as early as mid-2022, and provide a basis upon which Dr Kumagaya provided his opinion. That opinion was consistent with those of the treating general practitioner and psychologist.
The applicant refers to what Acting Deputy President Roche said in Attorney General’s Department v K,[40] in respect of the “egg-shell psyche” principle, equivalent of the “egg-shell skull” principle, and a worker’s perception of real events which actually occurred in the workplace which give rise to a psychological injury.
[40] [2010] NSWWCCPD 76 (AG v K).
The applicant notes that no issue is raised by the respondent under s 14 of the 1987 Act in respect of his conduct, and has only sought to rely on reasonable management action in “discipline” and/or “dismissal”. The applicant submits that the respondent cannot take any comfort under s 11A in relation to the circumstances of the altercation as it occurred on
9 September 2022.
The applicant refers to a number of well known authorities which deal with the various aspects of s 11A, noting that the onus of proof of establishing matters under that section falls on the employer, and it is therefore incumbent upon the respondent to satisfy the Commission that his injury arose wholly or predominantly as a result of discipline or dismissal. The grounds upon which the respondent relies must be properly particularized in the s 78 notice.
The applicant submits that the Commission will need to conduct a detailed comparison of potential causes of the psychological injury, undertaking a weighing of the employer’s actions in the s 11A “discipline” and “dismissal” context only (emphasis in submissions) against all other factors.
The applicant submits that when the matters referred to in the submissions are weighted and regard is had to the contemporaneous material, it is inconceivable that the injury could be said to arise predominantly from discipline of dismissal. The applicant submits that the medical evidence of Dr Kumagaya, when regard is had to the applicant’s statement evidence, the contemporaneous text messages and the undisputed background facts, must be accepted.
The applicant submits that it is clearly the case here that the observations if AG v K are satisfied. Moreover, the respondent has failed to establish on any basis that the injury that has been conceded arose as a result of any actions by which s 11A could be invoked.
The applicant submits that there should be an award in his favour and a referral be made to the Approved Medical Specialist [sic, Medical Assessor].

Respondent in reply

The respondent refers to the applicant’s submissions in respect of a series of text messages/exchanges relating to workflow processes, staffing issues and the like. The respondent submits that while this confirms that the applicant raised workplace concerns with his supervisors/colleagues, there is no evidence these concerns resulted in psychological symptoms or reaction, or that it caused the applicant to attend on any doctor or health care provider for treatment. The respondent reiterates what it said in written submissions dated
14 February 2025 that there is no evidence of the applicant seeking psychological treatment (for a work related issue) or being incapacitated for work as a result of any psychological condition, up until the incident that occurred on 9 September 2022.

In relation to the criticism referred to above at [77] above, the respondent notes that there is no real controversy as to the circumstances in which the applicant came to be the subject of disciplinary action. This is particularly so given the applicant’s own concession regarding his conduct. The interview notes relied upon go to the investigation that was undertaken by the respondent rather than any factual issue or dispute as to the circumstances of what occurred on 9 September 2022.
The respondent finally joins with the applicant in referring to the decision of Acting Deputy President Candy at [89] in Iss Property Services Pty Limited v Milovanovic[41] in so far as it requires a “comparison between all of the employment related contributions to injury and those contributions as a result of reasonable actions by the employer” (emphasis in submissions). The respondent submits that in this case, the Commission would be comfortably satisfied that the whole or prominent cause of the applicant’s psychological injury was the reasonable action taken by the employer in relation to discipline and dismissal. To the extent that there were other “employment related conditions”, there is no evidence to suggest they resulted in the applicant seeking psychological treatment or impeded on his ability to undertake his preinjury duties. It was not until after he engaged in gross misconduct on 9 September 2020 [sic, 2022], and was subjected to disciplinary action resulting in dismissal, that he sought any psychological treatment (save for some psychological treatment he obtained for marital stressors).
[41] [2009] NDWWCCPD 27 (Milovanivic).
The respondent submits that the appropriate outcome of the proceedings would be an award in favour of the respondent in respect of the allegation of primary psychological injury.

FINDINGS AND REASONS

Section 11A action

Section 11A(1) of the 1987 Act is in the following terms:
“(1) No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.”
The applicant in this case has not put in issue the reasonableness or otherwise of the respondent’s action taken with respect to discipline or dismissal. He has presented his case on the basis that the action was not the whole or predominant cause of his undisputed psychological injury, based principally on the opinion of Dr Kumagaya. The “reasonableness” issue will not therefore be considered in these reasons.[42]
[42] See State of New South Wales (Hunter New England Local Health District) v Chislett [2025] NSWPICPD at [60].
The applicant has similarly not put in issue what occurred in the investigation process into the incident of 9 September 2022 carried out by the respondent. I accept the respondent’s submission in reply that there is no real controversy as to the circumstances in which the applicant came to be the subject of disciplinary action. The applicant himself admits to striking Gerry in the chest, in response to what he perceived to be a threatening approach to him by Gerry in the tea room, with Gerry swearing at Mr Milo and accusing him of being a liar, in response to a similar accusation from the applicant to Gerry about lying.
In his undated letter to the respondent in reply the letter from Brett Power to Mr Milo dated
9 September 2022,[43] the applicant says of Gerry’s approach to him in the tea room:
“He came into the tearoom intimidating, harassing me, and swearing with actions using his right hand, thinking he might hit me while I’m sitting down then I tried to protect myself and instinctively reacted, hitting Gerry.
I apologise, I feel sorry and regret for my actions. They were out of character. I am not a violent person and I understand I should not act like that in the workplace. Gerry’s actions on the day made me feel intimidated because of the harassment and anxious but I knew I should have removed myself from the situation.”[44]
[43] Reply pp131-134.
[44] Reply p 134.
In the minutes of the meeting between Mr Milo and his two support persons Daniel Harding and Craig Talbot, Ben, and Belinda as note taker on 15 September 2022, in part response to the first specific question put to him, Mr Milo said:
“First I want to say I regret hitting him. I don’t want to get anyone in trouble, and I feel sorry for Gerry to and I don’t want him to lose his job or else how will he pay his mortgage?”[45]
and later in part response to question 3:
“I had to protect myself and moved my arms. I didn’t know which part of the body I touched. When I realised, I said sorry straight away when I realised, I hit him. I was in the corner; I had no room, and they were so close to me.”[46]
[45] ARD p 97.
[46] ARD p 98.
The applicant was the subject of disciplinary action because he hit Gerry, and he was then asked to show cause for gross misconduct. When threatened with dismissal by the respondent, he was allowed to resign on 5 October 2022.[47]

Causation of psychological injury
[47] ARD p 170.

The respondent does not dispute that there were workplace concerns raised by the applicant with his supervisor and colleagues prior to 9 September 2022. These are confirmed by the applicant:
(a)    at [42] of his statement dated 16 November 2022 given to an investigator, where he says that he experienced harassment and intimidation and bullying due to longstanding issues with relieving for forming and mixing. Those issues caused frustration amongst mixers and formers, and were the subject of several complaints of several workers to management. Despite these complaints,
Mr Milo says that management did not rectify the issue, and it persisted leading to tension and arguments between workers;[48]
(b)    in the text messages exchanged between Mr Milo and Candy, Annexure ‘A’ to his second statement dated 25 October 2024;[49]
(c)    in the email from the union to the respondent dated 12 April 2022, Annexure ‘B’ to the statement dated 25 October 2024,[50] and
(d)    in the consultation note dated 2 November 2022 of the treating general practitioner, Dr Eric Lim, where:
(i)the applicant told Dr Lim that he was threatened by co-workers due to ongoing issues with relieving workers from machines and felt a lack of support from management, and
(ii)there is record of an ongoing issue in respect of relieving workers from mixing and forming machines for 12 months, such issue having been previously raised with HR and management and which was disregarded.[51]
[48] ARD p 52.
[49] ARD p 182.
[50] ARD p 196.
[51] ARD p 428.
Belinda at [12] and [15] in her statement dated 21 November 2022 states:
(a) her belief that there may have been friction in the past between Mr Milo and Gary, and
(b) that although she was not aware of any conflict between Mr Milo and Gary until the incident of 9 September 2022, it was discussed during the investigation that some time ago there was a similar disagreement with Mr Milo and Gerry, both of whom said that it was resolved by the Team Leader who no longer works for the respondent.[52]
[52] Reply pp 31-32.
I accept that there were issues in the workplace for about 12 months prior to
9 September 2022 as hereinbefore referred to.
However, as the respondent submits, there is no evidence that these issues resulted in psychological symptoms or reaction, such that the applicant attended on a doctor or health care provider for treatment. There is no evidence that he sought psychological counselling for a work related issue at that time, or that he became incapacitated for work because of any such issue.
The applicant submits that it is inexplicable that the respondent did not produce any evidence from Gary or Mr Vurguntas addressing any background history. Perhaps the explanation for that is that it does not dispute such history.
I do not discount any weight that should be given to the evidence of interview with Gary in terms of the rules of the Commission or what was said by the Court of Appeal in respect of the probative value of evidence in Edmonds. That evidence is not in issue in the current proceedings. What must be determined is if the action taken by the respondent against the applicant in regard to discipline and/or dismissal was the whole or predominant cause of
Mr Milo’s psychological injury.
A review of the relevant medial evidence is as follows.

Dr Lim/Carl Nielsen

The consultation note with Dr Lim, treating general practitioner, dated 2 November 2022 is referred to above at [106(d)]. The applicant had seen Dr Lim before this date in respect of claimed physical injuries suffered arising out of or in the course of his employment with the respondent. It appears that the earliest consultation with Dr Lim was on 20 October 2022.[53]
[53] ARD p 433.
Dr Lim issued an “Initial Medical Report” dated 2 November 2022 to the applicant’s solicitors in which he relevantly noted:
(a)    presentation to Dr Lim on 2 November 2022 following psychological injuries sustained on Friday 9 September 2022;
(b)    diagnosis of adjustment disorder with features of post-traumatic stress disorder;
(c)    pre-existing marital issues;
(d)    the matters referred to in [106(d)] above;
(e)    the incident in the lunch room on 9 September 2022;
(f)    Mr Milo was stressed and depressed about being unable to return to work and under financial pressure, and
(g)    A “Conclusion/Causation” as follows:
“He sustained a psychological injury from the workplace. He was threatened by co-workers due to ongoing issues with relieving workers from the machines. He felt lack of support from management.
Work was the main contributing factor for the injury.”[54]
[54] ARD p 300.
Carl Nielsen, psychologist, reported on 16 November 2022 to “General Practitioner Workers Doctors” (Workers Doctors being the practice of which Dr Lim is a member) noting:
(a) Mr Milo was referred for psychological therapy, and
(b) the following description of what occurred on 9 September 2022:
“During Mr Milo's lunch break, two (2) colleagues who were supposed to be relieved approached Mr Milo and became aggressive towards him. One (1) colleague raised his hands and swore at Mr Milo. Mr Milo noted approaching HR on several occasions to resolve the workplace issues but nothing was resolved leaving Mr Milo unsupported and feeling unsafe at his place of work. He resigned on 5th October 2022 as he was no longer Psychologically able to cope with his work duties.”[55]
[55] ARD p 303.
Carl Nielsen diagnosed the applicant as having sustained adjustment disorder with depressed and anxious mood with features of post-traumatic stress disorder due to his work related injury where employment was the main contributing factor.

Dr Murphy

Dr Murphy’s report dated 31 January 2023 and supplementary reports dated
27 February 2023 and 11 April 2024 are referred to above at [16]-[17].
In his principal report dated 31 January 2023 addressed to the case management specialist of icare, Dr Murphy referred to and quoted from the following paragraph in the applicant’s undated letter of apology to the respondent referred to at [103] above:
“Recently, I have been dealing with lots of stress outside of work involving personal issues. These issues have affected my mental health and influenced my poor reaction on the day of the incident. I am taking steps to address my stress and improve my mental health. Actually, I was seeking help through EAP before this incident happened which was advised by Simar Dhanao – the manufacturing manager. I am continuing counselling with EAP at present. I’m also seeking help through a private counsellor with the help of my eldest daughter. I am having regular meetings with my GP to manage stress. I have conversations with Simar Dhanao often when we both have free time at work. I’m trying to live a healthier lifestyle by changing my habits and regularly exercising to relieve stress and lose weight.”
Dr Murphy then referred to the factual investigation into the incident of 9 September 2022, summarising what took place up until the applicant’s resignation on 5 October 2022.
Dr Murphy recorded Mr Milo as saying that the long hours he worked, up to 12 a day starting at 3.00am, started to put a strain in his marriage, and quoted the following:
“My wife accused me of being a workaholic. She wanted to know why I was never home. She asked me whether I was seeing another woman. We started to argue a lot”. (emphasis in report)
Dr Murphy recorded that:
(a)    in April 2022 Mr Milo saw his general practitioner who commenced him on Lexapro 20 mg daily (a mild anti-depressant medication) and Melatonin to improve his sleep;
(b)    the general practitioner also arranged a referral to a clinical psychologist and marriage therapy;
(c)    in addition, Mr Milo sought assistance from the EAP psychologist;
(d)    with the commencement of treatment, especially the marriage therapy, things at home began to improve;
(e)    another strain on Mr Milo’s health was low back pain following the introduction by the respondent of a new mixer in July 2022. At age 67 years Mr Milo began to come home from work feeling sore with the low back pain steadily worsening throughout August and September 2022, and
(f)    in respect of the long standing friction amongst the team members about relieving each other during breaks, Mr Milo said that there had been a few union meetings about it, and management just kind of ignored it, but arguments persisted.
Dr Murphy expressed the opinion that the applicant had pre-existing problems with his mental health with a diagnosis of major depressive disorder recurrent severe without psychosis, and that the managerial action taken by the respondent caused a significant worsening of Mr Milo’s pre-existing depression. He developed severe problems with anxiety and mood meeting the criteria for major depressive disorder recurrent severe without psychosis (aggravation of pre-existing condition).
Dr Murphy noted that the applicant had been compliant with treatment by his general practitioner and psychologist, but despite everyone’s best efforts, his mental health remained fragile, with episodes of suicidal ideation experienced. The doctor made recommendations for future treatment.
In answer to specific question [6] put to him, Dr Murphy said that Mr Milo first developed problems with his mental health in April 2022, and that his mental health remained fragile requiring further treatment. In answer to question [9] Dr Murphy said that the applicant’s marriage was under significant strain in April 2022.
In his supplementary report dated 27 February 2023 addressed to the case management specialist of icare, Dr Murphy relevantly said:
(a)    it was outside his expertise as a psychiatrist to advise whether the employer’s actions were reasonable, but that legal advice would need to be sought;
(b)    the employer’s actions following the incident of 9 September 2022 were the causation for Mr Milo’s current diagnosis and symptoms;
(c)    Mr Milo’s reaction to the workplace event(s) was abnormal and constitutes a mental illness;
(d)    in answer to a question as to whether the incidents in the workplace, including the employer’s actions following the incident of 9 September 2022, were the whole and [sic] predominant cause of Mr Milo’s diagnosable condition, explained (quoting his previous report) that there were multiple contributing factors (marital distress and low back pain) but the disciplinary action was the tipping point in the applicant’s mental health, and
(e)    In answer to a question as to the percentage apportionment of the pre-existing vs work related injury which was contributing to the current medical condition/presentation, said that the work injury accounts for greater than 80% of Mr Milo’s current presentation
In answer to a further request from the respondent’s solicitors dated 5 April 2023, Dr Murphy provided a further supplementary report dated 11 April 2023. Included in the schedule of questions was an observation correcting a question previously posed to the doctor, in response to which an answer in the previous supplementary report to icare was supplied. The new question highlighted the distinction between “whole and predominant cause” and “whole or predominant cause” (emphasis added), noting that “wholly” and “predominantly” are separate concepts and a finding of one or the other needs to be considered. Dr Murphy said:
“The managerial action taken by the employer on 9 September was not the whole cause of Mr Milo’s current psychiatric injury.
However, based on the chronology, available medical evidence, and the content of his distress, it was the predominant (I estimate 80%) cause of Mr Milo’s current psychiatric injury.
Again, it is outside the area of expertise for a psychiatrist to advise you on whether the managerial action was reasonable.”

Dr Kumagaya

The two reports of Dr Kumagaya dated 8 June 2023 are referred to above at [19] (principal report) and [21] (assessment report).

Principal report

Dr Kumagaya lists the following documentation as being provided to him and reviewed:
(a)    medico-legal report of Dr Lucas Murphy dated 31 January 2023;
(b)    supplementary report(s) of Dr Lucas Murphy dated 27 February 2023 and
11 April 2023;
(c)    psychologist report dated 18 May 2023 and 16 November 2022;
(d)    Initial Medical Report of Dr Eric Lim dated 2 November 2022;
(e)    clinical Notes of Workers Doctors;
(f)    Workers Injury Claim Form, and
(g) insurer's s 78 notice dated 26 April 2023.
In the principal report Dr Kumagaya recorded under “HISTORY OF PRESENTATION” how Mr Milo described that he had commenced work as a machine operator at the respondent in December 1991. The doctor then went on to record the following history in respect of problems experienced in the workplace from 2021, the incident of 9 September 2022, and the applicant’s resignation from his employment with the respondent:
“Mr Milo first described experiencing problems with his workplace in 2021. Mr Milo stated that there were significant issues with staff shortages, which impacted on the capacity of workers to relieve each other from their machine duties. This would regularly result in workers missing their breaks, as well as conflicts between
workers, owing to the inability to relieve each other. Mr Milo stated that he had escalated his concerns in relation to such problems to the factory manager and human resources department of his organisation on at least five occasions, although his concerns were not addressed. He stated that he had also involved his union to assist in such discussions.
In the context of such workplace nature and conditions, Mr Milo described the onset of depressive and anxious symptoms in approximately May 2022. These included low mood, decreased interest and engagement in previously enjoyable activities, sleep disturbance, concentration difficulties, low energy levels, easy fatigability, anxiety, and restlessness.
On 9 September 2022, Mr Milo stated that he was asked by his colleague to relieve two other colleagues from operating mixing and forming machines. Mr Milo stated that he was in the middle of attending to a separate issue, and hence was not able to relieve his colleagues. Mr Milo stated that during his morning tea break, he was approached by these two colleagues who postured aggressively towards him, whilst
threatening and intimidating him. Mr Milo stated that one of these individuals then screamed at him, and began approaching him with his hands raised. Mr Milo stated that a physical altercation subsequently transpired.
The incident resulted in a further destabilisation of Mr Milo’s mental state.
Despite explaining to his employer that his actions were in self-defence, Mr Milo stated that on 5 October2022, a meeting was arranged by his employer during which he was advised that he would be terminated if he did not voluntarily resign. Mr Milo stated that he subsequently signed a document confirming his resignation as he felt pressured to do so.
Owing to his deteriorating mental state, Mr Milo had not been able to return to work since.”

Dr Kumagaya then went on to deal with a number of other matters including current functioning, treatment history, and past psychiatric history. In respect of treatment history, the doctor is obviously referring to the treatment rendered by Dr Lim and Carl Nielsen, although those treaters are not specifically mentioned by name. Under past psychiatric history,
Dr Kumagaya records Mr Milo’s statement that he had attended psychological therapy once before in the context of familial psychosocial stressors, and that at the point of his workplace injury he was in remission of such concerns and his mental state was stable. There was no previous history of depression, anxiety, melancholia, psychosis, obsessions, or compulsions. Mr Milo denied any prior history of self-harm, suicide attempts, or harm towards others. There was no history of prior psychiatric admissions, or pre-injury psychotropic trials.
It is not relevant to refer to other matters recorded by Dr Kumagaya until he expresses his expert opinion. In answer to specific question [4] posed to him, the doctor says:
(a)    Mr Milo’s employment with the respondent “…was the main contributing factor to his psychological injury. He did not have a significant psychiatric injury background pre-dating the workplace injury”;
(b)    “Mr Milo described how he first experienced the onset of his psychological injury in May 2022 in the context of longitudinal problems with staff shortages, which impacted on the capacity of workers to relieve each other from their machine duties. Mr Milo described how this would regularly result in workers missing their breaks, as well as conflicts between workers, owing to the inability to relieve each other. Mr Milo also described how his employer failed to adequately address such concerns despite repeated attempts by Mr Milo to escalate his concerns in relation to such.”, and
(c)    the workplace incident on 9 September 2022 only served to further destabilise
Mr Milo’s already unstable mental state. The incident, described by
Dr Kumagaya, further worsened Mr Milo’s depressive and anxiety symptoms.
The doctor’s answers to further specific questions posed to him are not relevant to the issue to be determined in the current proceedings, with the exception of question [11] where the doctor is asked to comment on the report of Dr Murphy dated 31 January 2023, and supplementary reports dated 27 February 2023 and 11 April 2023.
In expressing his disagreement with Dr Murphy, Dr Kumagaya mentions the following:
(a)    Dr Murphy does not acknowledge the longitudinal workplace stressors that resulted in the initial onset of the applicant’s psychological injury in May 2022;
(b)    Dr Murphy states that Mr Milo experienced a deterioration in his mental state in April 2022 in the context of marital psychosocial stressors and low back pain. He states that Mr Milo’s mental state was significantly worsened by the management action taken by the respondent against him. Dr Kumagaya notes however that the longitudinal problems to which Dr Murphy failed to draw attention were staff shortages which saw workers having to forego their work breaks, as well as being unable to relieve each other of their work duties;
(c)    Dr Murphy also does not acknowledge the repeated attempts by Mr Milo to have such workplace concerns rectified; they were not sufficiently addressed, and
(d)    Dr Kumagaya says that the latter workplace stressors were significant, as it was in the context of these that Mr Milo first experienced the onset of depressive and anxious symptoms. Such symptoms were only worsened by the events of
9 September 2022, events that were directly the result of the same longitudinal workplace stressors to which Mr Milo had been subject for at least the previous 12 months.
Dr Kumagaya respectfully disagrees with Dr Murphy’s opinion in relation to diagnosis, noting that Dr Murphy states that Mr Milo experienced an aggravation of a pre-existing condition. (emphasis in report). Whilst Dr Kumagaya acknowledges that Mr Milo attended psychological therapy prior to his workplace injury in the context of familial psychosocial stressors, Mr Milo states that such symptoms were well addressed with such treatment, and subsequently remitted.
Dr Kumagaya expresses the opinion that the applicant’s psychosocial stressors, and the psychological symptoms those induced, were separate to the psychological injury he sustained as a result of his employment with the respondent.
Dr Kumagaya comments on the opinions of Dr Murphy expressed in the supplementary reports dated 27 February 2023 and 11 April 2023. He respectfully disagrees with
Dr Murphy’s statement that the employer’s actions following the incident of
9 September 2022 constituted causation of Mr Milo’s psychological injury. Dr Kumagaya repeats his previously expressed opinion that the onset of the psychological injury was in May 2022 in the context of longitudinal workplace stressors relevant to staff shortages, as well as perceived inaction by the applicant’s employer in addressing these matters.
Dr Kumagaya says that the events of 9 September 2022 only served to destabilise Mr Milo’s already unstable mental state.

The assessment report

In this report Dr Kumagaya gives a diagnosis of major depressive disorder with anxious distress, stating the applicant’s condition is well stabilised, and is unlikely to change in the next year without treatment. His condition has reached maximum medical improvement.
Dr Kumagaya assesses the applicant as having sustained 19% whole person impairment.

Both reports

It is noted that Dr Kumagaya does not in the assessment report specify a date of injury on the psychiatric impairment rating scale (PIRS) table. He does record in the principal report that the applicant has been unable to return to work since 5 October 2022 as a result of his workplace injury, and Mr Milo’s description that he first experienced the onset of psychological injury in May 2022.
A review of the relevant lay evidence is as follows.

The applicant’s evidence

The undated letter to the respondent in reply the letter from Brett Power to Mr Milo dated
9 September 2022 is referred to above at [103]. In that statement the applicant does not refer to any psychological consequences of the difficulties he apparently experienced in the workplace from April or May 2022 requiring him to seek medical assistance or treatment. He does say:
“Recently, I have been dealing with lots of stress outside of work involving personal issues. These issues have affected my mental health and influenced my poor reaction on the day of the incident. I am taking steps to address my stress and improve my mental health. Actually, I was seeking help through EAP before this incident happened which was advised by Simar Dhanao – the manufacturing
manager. I am continuing counselling with EAP at present. I’m also seeking help through a private counsellor with the help of my eldest daughter. I am having regular meetings with my GP to manage stress. I have conversations with Simar Dhanao often when we both have free time at work. I’m trying to live a healthier lifestyle by changing my habits and regularly exercising to relieve stress and lose weight.”
There are no records of treating practitioners in evidence covering the period up until
9 September 2022. However, the applicant concedes that he did not seek treatment during this period for any work related psychological injury or condition. He did seek and receive counselling from EAP for non-work related stressors.
In his statement dated 16 November 2022 the applicant says at [58] that, when consulting his solicitor after he was terminated, he asked who was going to look after his work related physical injuries and his depression because of the longstanding relieving and forming issues.
In his supplementary statement dated referred to above at [69] the applicant says at [6] that prior to the altercation on 9 September 2022, he was already feeling anxious, depressed, and stresses from the longstanding issues. He says that he was not sleeping well, and that if the issues were not impacting on his mental health, he would not have raised any such complaints and persevered with his work. The reason Mr Milo says that he made the complaints was because they were causing him to feel anxious, depressed, and stressed.
At [7] of that supplementary statement the applicant says:
“My wife, Julita Milo, and I were having problems in around April 2022. A big reason for these problems was because I was always working overtime and bringing into my home my stress from what was happening at work. This created a breakdown in our relationship. There was no affair. I did experience a generalised depleted mood and sought counselling; however, I do not believe this caused or contributed to my current psychological condition. My wife and I have a stable marriage, and we live together.”
Although it was not referred to by the applicant in submissions, there is in evidence a statement by the applicant’s wife, Julita Milo (Ms Milo), dated 1 March 2024.[56] This was obviously given long after the dispute arose between the applicant and the respondent as to the causation of the applicant’s psychological injury.
[56] ARD p 203.
Ms Milo says at [7] of her statement that when Leo worked at Arnotts Biscuits, she wasn’t always happy on the occasions that he worked overtime. That was because she saw it as
Mr Milo overworking himself. She was concerned about the long term effects this would have on him and his health. Ms Milo also says that she did not like Mr Milo spending time away from his family.
At [8] Ms Milo also says that, like with any other issues, they talked about this, and things have become good. They speak with their children about these issues as well, and they have a very open communication with them, and this helps. At [9], Ms Milo says that they also attended couples counselling in three occasions in or around 2021. At [12] she says that it is a stable marriage that she and her husband share.
The statement of Ms Milo paints a somewhat rosier picture of the relationship between herself and her husband in early 2022 than that portrayed in the history the applicant gave to Dr Murphy on 19 January 2023. Dr Murphy recorded in the report dated 31 January 2023 that:
(a) his wife accused him of being a workaholic, wanted to know why he was never home, and asked him if he was seeing another woman. They started to argue a lot, and
(b) in April 2022 Mr Milo saw his general practitioner who commenced him on Lexapro 20 mg daily and Melatonin to improve his sleep. The general practitioner arranged referral to a clinical psychologist and marriage therapy, and in addition Mr Milo sought assistance from the EAP psychologist. With the commencement of treatment, especially the marriage therapy, things at home began to improve.
When relating his past psychiatric history to Dr Kumagaya as recorded in the principal report, the applicant said that he had attended psychological therapy once in the context of familial psychosocial stressors, and that at the point of his workplace injury, he was in remission of such concerns and his mental state was stable.
If what the applicant related to Dr Murphy is accepted, Mr Milo understated the extent and effect of the “familial psychosocial stressors” discussed with Dr Kumagaya. Nevertheless, in the absence of the evidence of practitioners who treated the applicant from about April 2022 onwards, and of any other evidence to indicate that the familial psychosocial stressors were ongoing as at September 2022, I find that such stressors, whilst they may have been playing a part of the applicant’s psychological state as at 9 September 2022, were not a significant part of that presentation. On the evidence, they had been addressed and resolved by that date.
What the applicant told Dr Murphy as to the situation with his marriage in early 2022 is consistent with what he said in his undated letter of apology to the respondent referred to above at [103] and [139]. However that letter was written by Mr Milo when he was replying to the letter from Brett Power dated 9 September 2022, and trying to salvage his position with the respondent after a long, and until then unblemished, record of employment. Mr Power’s letter was the commencement of the investigatory process into the events of
9 September 2022 in the tea room, and in my view it is understandable that Mr Milo would not at that stage mention discord within the workplace as a factor in explaining his actions on that day.
I accept that the applicant’s actions in the tea room (described elsewhere as lunch room) were out of character, and that he expressed immediate remorse for what he did. He was even concerned for the welfare of Gerry, and the security of his position with the respondent. He apologised to Gerry.
Viewed in that light, I think that the applicant’s actions in the tea room on 9 September 2022 were the culmination of a long period of frustration arising out of the longitudinal issues in the workplace, and the perceived failure of the respondent to deal with them. Those issues were significant.
Dr Murphy did not place great emphasis on those issues in giving his opinion. Dr Kumagaya did.
I also find that the applicant was suffering from symptoms of stress and anxiety as a result of physical injuries of which he gives evidence, but those were not his major concern as at
9 September 2022.
The disciplinary action taken by the respondent following 9 September 2022 and dismissal of the applicant from his employment was not the sole cause of his psychological injury. The issue for determination is if it was the predominant cause of such injury.

AG v K

In AG v K Acting President Roche considered a worker’s perception of events with the following observations (authorities omitted):
“(a)    employers take their employees as they find them. There is an ‘egg-shell psyche’ principle which is the equivalent of the ‘egg-shell skull’ principle;
(b)     a perception of real events, which are not external events, can satisfy the test of injury arising out of or in the course of employment;
(c)     if events which actually occurred in the workplace were perceived as creating an offensive or hostile working environment, and a psychological injury followed, it is open to the Commission to conclude that causation is established;
(d)     so long as the events within the workplace were real, rather than imaginary, it does not matter that they affected the worker’s psyche because of a flawed perception of events because of a disordered mind;
(e)     there is no requirement at law that the worker’s perception of the events must have been one that passed some qualitative test based on an ‘objective measure of reasonableness’, and
(f)     it is not necessary that the worker’s reaction to the events must have been ‘rational, reasonable and proportionate’ before compensation can be recovered.”
In this case Mr Milo perceived real events in the workplace involving longitudinal issues from at least early 2022 or possibly late 2021 as creating an offensive or hostile working environment. If one regards what happened in the tea room on 9 September 2022 as the culmination of such events, as I have found, psychological injury followed. I make this finding notwithstanding the undisputed fact that, prior to September 2022 the applicant had not sought treatment for the stress and anxiety caused by the longitudinal events in the workplace.
This finding is in accordance with the opinion of Dr Kumagaya on causation, and consistent with the opinions of Dr Lim and Carl Nielsen who started treating Mr Milo in November 2022, shortly after he resigned on 5 October 2022.
The actions of the respondent after 9 September 2022 with regard to discipline and dismissal must be compared with the events occurring in the workplace up to and including what occurred in the tea room on that day. Candy ADP said at [89] in Milovanovic that what is required:
“…is a comparison between all of the employment related contributions to injury and those contributions as a result of reasonable actions by the employer.”
The term “predominantly” means mainly or principally in the context of the injury received. It requires that the employer’s actions be the primary or leading cause of the psychological injury, though not necessarily the only cause. The term acknowledges other factors may contribute, but the employer’s actions must outweigh those factors in significance.[57]
[57] See Ponnan v George Weston Foods Ltd [2007] NSWWCCPD 92 per Handley ADP at [24], and McCarthy v Department of Corrective Services [2010] NSWWCCPD27 per Roche ADP at [157].
I am satisfied that what happened to the applicant in the workplace up to and including the events of 9 September 2022 was the predominant cause of the applicant’s psychological injury. I am not satisfied that the subsequent actions of the respondent with respect to discipline and dismissal were the predominant cause of the applicant’s psychological injury.
The matter will be remitted to the President for referral to a Medical Assessor for assessment of permanent impairment as a result of psychological injury deemed to have occurred on
5 October 2022.
In respect of the deemed date of injury claimed in the ARD, that is the date of the applicant’s resignation from the respondent’s employ. I do note that the date of injury specified in the various notices issued by icare to Mr Milo, commencing with the acceptance of provisional liability notice dated 21 November 2022 and concluding with the review outcome notice dated 6 July 2023, the date of injury is specified as 9 September 2022. That would be consistent on one view with my finding that the events in the tea room on that day were the culmination of long standing longitudinal issues in the work place causing the applicant’s psychological injury. On the other hand, as noted at [150], the letter from Brett Power to
Mr Milo of that date was the commencement of the investigation process into the applicant’s actions.
The respondent did not make a submission on what should be the date of injury in the event that it was unsuccessful in its s 11A defence, nor did the applicant. In that circumstance I will adopt the deemed date of injury nominated by the applicant in the ARD.

SUMMARY

The applicant sustained primary psychological injury deemed to have occurred on
5 October 2022 arising out of or in the course of his employment with the respondent.
The matter is remitted to the President for referral to a Medical Assessor for assessment of psychological injury deemed to have occurred on 5 October 2022.
The documents to be referred to the Medical Assessor are:
(a)    ARD and attached documents;
(b)    Reply and attached documents;
(c)    Application to Lodge Additional Documents dated 6 February 2025 and attached documents, and
(d)    Application to Lodge Additional Documents dated 7 February 2025 and attached documents.

[2025] NSWPIC 88

17 March 2025