Nicolaides v Blacktown City Council

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Nicolaides v Blacktown City Council [2022] NSWPIC 455
APPLICANT:	George Nicolaides
RESPONDENT:	Blacktown City Council
MEMBER:	Brett Batchelor
DATE OF DECISION:	15 August 2022
CATCHWORDS:	WORKERS COMPENSATION - Claim for weekly benefits and for section 60 of the Workers Compensation Act 1987 (1987 Act) expenses as a result of psychological injury sustained by the applicant worker in the course of his employment with the respondent; no issue that the applicant sustained psychological injury; the respondent employer claims that it was caused by reasonable action taken or proposed to be taken by or on its behalf with respect to discipline pursuant to section 11A of the 1987 Act; Held — finding that the injury was not wholly or predominantly caused by action taken or proposed to be taken by or on behalf of the respondent with respect to discipline; the action taken by the respondent employer was not reasonable; awards in favour of the applicant for weekly benefits compensation and for costs and expenses pursuant to section 60 of the 1987 Act.
DETERMINATIONS MADE:	The Commission determines: 1. The psychological injury sustained by the applicant arising out of or in the course of his employment with the respondent was not wholly or predominantly caused by action taken or proposed to be taken by or on behalf of the respondent with respect to discipline. 2. The action taken or proposed to be taken by or on behalf of the respondent with respect to discipline was not reasonable. 3. The applicant had no current work capacity from 24 May 2021 to 4 January 2022. 4. The applicant has had current work capacity from 5 January 2022. 5. The applicant’s pre-injury average weekly earnings are $1,245. 6. The applicant’s ability to earn in suitable employment from 5 January 2022 is $500 per week. 7. The respondent is to pay the applicant weekly benefits as follows pursuant to Workers Compensation Act 1987: (a) 24 May 2021 to 23 August 2021 - $1,182.75 per week pursuant to s 36(1); (b) 24 August 2021 to 4 January 2022 - $996 per week pursuant to s 37(1), and (c) 5 January 2022 to date and continuing - $496 per week pursuant to s 37(3). 8. The respondent is to have credit for payments made to the applicant since he was suspended from work. 9. The respondent is to pay the applicant’s costs and expenses pursuant to s 60 of the Workers Compensation Act 1987.

STATEMENT OF REASONS

BACKGROUND

This matter comes back before the Personal Injury Commission (the Commission) following an arbitration hearing on 13 April 2022, and the issue of Certificate of Determination and Statement of Reasons dated 16 May 2022 (Reasons 16 May 2022), which dealt with objections raised by the applicant to evidence attached to an Application to Admit Late Documents (AALD) dated 8 March 2022 lodged by the respondent.
A brief background to the proceedings appears at [1]-[3] of Reasons 16 May 2022.
Further relevant background is as follows.
As at 2021 Mr Nicolaides (the applicant/Mr Nicolaides) had worked for Blacktown City Council (the respondent) as a full-time employee for approximately 18 years. On 26 April 2021 he attended a meeting with Kevin Jones, employed by the respondent as Manager, Key Venues, and Kristy Watts, employed by the respondent as Executive Manager, Customer Experience. Leading up to that meeting the applicant claimed that in early April 2021 he heard rumours about whether male staff had made female staff feel uncomfortable. This information was conveyed to Mr Nicolaides by a lifeguard at the Blacktown Council Leisure Centre where he worked. The applicant was surprised that there was even this suggestion, and also surprised to hear such a rumour.
The lifeguard to whom the applicant spoke mentioned that Kate Williamson, an aquatics coordinator, had made an enquiry of a co-worker about whether male staff had made female staff feel uncomfortable.
The applicant approached Kate Williamson who indicated to him that she could not speak about it because she was undertaking an investigation. The applicant, as a union delegate, was of the view that it was not Ms Williamson’s role to be undertaking the type of investigation in which she was apparently engaged, and that it should have been done by human resources. He lodged a grievance with the respondent through the usual grievance process, and received an automated email response. However, no contact was made with him, nor was he interviewed. No action was taken in response to the grievance lodged.
About a week after the applicant lodged his grievance with the respondent, a letter dated 26 April 2021 was handed to him by Kristy Watts containing advice that the respondent was in receipt of allegations that Mr Nicolaides may have breached the Council’s Code of Conduct, Prevention of sexual harassment in the workplace, and Respectful behaviour policies. The author of the letter advised that due to the serious nature of the allegations, Mr Nicolaides was suspended on full pay effective 27 April 2021 and sent home. Other conditions were placed upon him[1]. Following the meeting on 26 April 2022 referred to in [4] above, the applicant went home and says that he found himself increasingly worried and concerned about the process that was unfolding.
[1] AALD 8 March 2021 p 37, noting that page references in this Statement of Reasons are to those in the electronic records of the Commission.
Prior to 19 May 2021 the applicant called his employer assistance counsellor because he says that he was struggling. That person did not do anything to ease his concerns. On 19 May 2021 Mr Nicolaides received an email letter from Sparke Helmore, the respondent’s solicitors, advising him of a confidential investigation into concerns about his workplace behaviour. The author of the letter advised that “Our preliminary investigations have given rise to allegations concerning your workplace behaviours.”[2] The applicant was asked to attend a meeting to take place via videoconference on Friday 21 May 2021 or Monday 24 May 2021. Attached to the letter were “Investigation Principles – Blacktown City Council” for signature by the applicant and “Allegations of fact” setting out in detail four allegations that the applicant:
(a)    inappropriately touched female staff;
(b)    asked an inappropriate question of a sexual nature;
(c)    viewed and had shown other staff members inappropriate images on his personal mobile phone during work hours, and had sent inappropriate content to work colleagues, and
(d)    had inappropriately used council resources, specifically his desk computer.
[2] AALD 8 March 2021 p 39.
Mr Nicolaides did not attend a video meeting on 21 or 24 May 2021 as requested by Sparke Helmore due to the state of his health.
On 24 May 2021 the applicant consulted his general practitioner, Dr Chandra, complaining of stress at work and of the accusation of sexual harassment and bullying. Dr Chandra counselled Mr Nicolaides and advised him to stay off work until he was assessed by a psychologist. He was certified medically unfit to return to work[3].
[3] Application to Resolve a Dispute (ARD) p 31.
On 4 June 2021 the applicant signed and lodged with the respondent a Workers Compensation Claim Form in which he claimed his injury as “Work related anxiety. Impacting on sleep, digestive processes etc.[4]”
[4] ARD p 2.
Mr Nicolaides saw Dr Chandra again on 24 June 2021 seeking local counselling from “John Blyth”. Dr Chandra created a Mental Health Treatment Plan, and referred the applicant to David Blyth, counsellor[5]. The applicant consulted David Blyth in June and July 2021[6].
[5] ARD p 31.
[6] ARD p 26.
On 20 September 2021 the respondent issued to the applicant a notice under s 78 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act)[7] following an independent medical examination of the applicant by Dr Doron Samuell, psychiatrist, on 17 August 2021 and production of a report by Dr Samuell dated 13 September 2021[8]. Dr Samuell diagnosed the applicant as suffering from a panic disorder, and said that his suspension from employment was the substantial cause of his condition.
[7] ARD p 9.
[8] Reply p 2.
In the s 78 notice, the respondent asserted that the action it took to suspend the applicant from his employment and investigate the allegations was lawful and reasonable in the circumstances. The respondent declined liability for the applicant’s claim on the basis that his injury was wholly or predominantly caused by reasonable action taken or proposed to be taken with regard to discipline. The respondent identified the following reports and documents relevant to the claim or aspect of the claim to which its decision related:
(a)    claim form dated 4 June 2021;
(b)    SIRA (State Insurance Regulation Authority) Certificate dated 24 May 2021;
(c)    report of Dr Samuell dated 13 September 2021, and identified reports and documents submitted by Mr Nicolaides in making his claim as:
(d)    claim form dated 4 June 2021, and
(e)    SIRA Certificate dated 24 May 2021.
On 15 November 2021 the applicant was independently medically examined by Dr Frank Chow, psychiatrist, at the request of his solicitor. Dr Chow produced a report dated 29 November 2021[9] in which he recorded a history which included matters referred to at
[4]-[9] above. Dr Chandra said that Mr Nicolaides was experiencing sufficient symptomatology for a diagnosis of adjustment disorder, and expressed the opinion that his psychiatric injury was as a result of his reported workplace difficulties. The doctor also said of the applicant:
“It would appear that he was experiencing some complex dynamic difficulties before management decided to investigate the allegation and stood him down from work.
I am therefore of the opinion that his condition is not purely relate [sic, related] to the investigation and being stood down from work.”
[9] ARD p 19.
The applicant was made redundant in March 2022.
The applicant denies the allegation against him. He says that his “[I]njuries have left me unwell and I continue to struggle from a psychological perspective.”[10]
[10] Supplementary Statement of George Nicolaides dated 22 April 2022 at [6].

ISSUES FOR DETERMINATION

The parties agree that the following issue remains in dispute:
Was the psychological injury sustained by the applicant wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the respondent with respect to discipline and/or dismissal?

PROCEDURE BEFORE THE 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.
The parties attended a conciliation conference/arbitration hearing on 10 August 2022 conducted in person. Mr Morgan of counsel appeared for the applicant instructed by Ms Pearce. The applicant attended via audio link. Mr Dodd of counsel appeared for the respondent instructed by Ms Palamara.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)    ARD and attached documents;
(b)     Reply and attached documents;
(c) [1]-[2] and [11]-[13] of the statement of Kevin Jones dated 8 March 2022[11];
(d) [1], [6] and [12] of the statement of Kristy Watts dated 8 March 2022 and annexures “B” and “C” thereto[12], and
(a)    Supplementary Statement of George Nicolaides dated 22 April 2022.
[11] AALD 8 March 2022 p 2.
[12] AALD 8 March 2022 p 22.

Oral evidence

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

SUBMISSIONS

The submissions of the parties are recorded, a transcript of which can be obtained on request. I will not repeat them in full. In view of the onus in respect of the s 11A defence resting on the respondent, it proceeded first with its submissions. In summary, they are as follows.

Respondent

The respondent reviews the applicant’s evidence as it appears in his statement dated 13 October 2021[13], and compares it with the history recorded by Dr Samuell in his report dated 13 September 2021, noting the error in that date of 24 March under “History” in that report as being the date that Mr Nicolaides was suspended by the respondent. The respondent submits that, based on the opinion of Dr Samuell, the onset of the applicant’s psychological injury was wholly or predominantly caused by the receipt of the letter dated 26 April 2021 from the respondent, and/or the receipt of the letter dated 19 May 2021 from Sparke Helmore.
[13] ARD p 6.
The respondent confirms that the s 11A matters on which it relies are “discipline” and /or “dismissal”.
The respondent notes that the Sparke Helmore letter dated 19 May 2021 clearly sets out four allegations of fact in respect of the applicant’s conduct on which reliance is placed as grounds for disciplining him. The respondent submits that the allegations were of conduct that was extremely serious, disturbing and of concern in the current workplace of the respondent, or indeed in any environment. The allegations by a number of employees suggested that the applicant acted in such a way as to cause concern to anyone who was the subject of the conduct alleged against the applicant. The respondent submits that the allegations do not need to be shown to be true, but it is the reasonable response of the respondent employer to the allegations which must be considered.
The respondent submits that the action it took in response to the allegations was reasonable. The respondent raises the question “What more could it have done?” It says that it could have terminated the applicant immediately, or ignored the allegations completely, both of which would have been unreasonable. Instead, once the allegations had been relayed up the chain of command within the respondent to Kevin Jones and Kristy Watts, they were dealt with by way of the letter issued on 26 April 2021 and suspension of Mr Nicolaides on full pay, followed by the letter from Sparke Helmore dated 19 May 2021. The applicant remained either on full pay, special leave or sick leave until his employment by the respondent came to an end in March 2022.
The respondent submits that by engaging Sparke Helmore to carry out a full investigation of the allegations, it was affording the applicant natural justice in respect of action taken to discipline him. The respondent emphasises again the serious and disgusting nature of the allegations, in particular in the context of local government protocols for the protection of staff. The action taken by the respondent was consistent with the requirements of s 11A of the 1987 Act.
In terms of the requirement laid down by Snell DP in Hamad v Q Catering Limited[14] that there be medical evidence to support the defence that the psychological injury suffered by the applicant was wholly or predominantly caused by the action taken by the respondent, the respondent relies on the evidence of Dr Samuell, including the history recorded by the doctor that Mr Nicolaides had not suffered from psychological symptoms before 26 April 2021.
[14] [2017] NSWWCCPD 6 at [88].
In respect of the applicant’s claim that he is incapacitated for work, in the event that he is successful in obtaining an award in his favour for weekly benefits, the respondent notes that there is an absence of evidence as to capacity for work from about the end of 2021. The report of Dr Chow does not assist the applicant in this regard, with the bland statement by the doctor therein that Mr Nicolaides remains totally unfit for work and is not in an appropriate state of mind to deal with the allegation investigation.
Dr Samuell examined the applicant in September 2021, and at that time found him able to work at an alternative location from the complainants, performing normal hours and duties. The respondent notes that Dr Samuell finds that despite the diagnosis that Mr Nicolaides is suffering from a panic disorder, his symptoms are at the mild end of the spectrum and cause little in the way of disability. In the absence of complicating factors, Dr Samuell gives the applicant a strongly positive prognosis.
The respondent also notes the certificates of capacity attached to the ARD, certifying no current work capacity for any employment, cease at the end of 2021.
The respondent submits that there is little evidence in respect of the applicant’s incapacity for work after September 2021 when he was seen by Dr Samuell, and that he has no incapacity for work after January 2022.
The respondent submits that in respect of any award that the applicant may receive for weekly benefits after September 2021 pursuant to s 37 of the 1987 Act, any current weekly earnings, and more importantly the applicant’s ability to earn in suitable employment, must be considered. Dr Samuell concedes that the applicant has some continuing problems which are mild. The respondent submits that, in this circumstance, the applicant has an ability to earn at least $500 per week in suitable employment from September 2021.
The respondent submits that the applicant’s pre-injury average weekly earnings (PIAWE) are $1,225.03 as referred to in the Reply, calculated with reference to earnings for the 12 months to 24 May 2021, particulars of which had been supplied to the applicant’s solicitors but admittedly are not in evidence. Eighty percent of $1,225.03 is $980.02, which when rounded up to $1,000 and had deducted therefrom $500 representing the applicant’s ability to earn in suitable employment, results in a possible award in the applicant’s favour of about $500 per week for the period from September 2021 to January 2022.

Applicant

In response to the respondent’s assertion of $1,225.03 as the applicant’s PIAWE, the applicant asserts a figure of $1,265.70, shown as the “Base Income” on a Payment Advice for the period from 14 January 2022 to 20 January 2022 attached to the ARD[15].
[15] ARD p 66.
In reply to the respondent’s submission that the allegations against the applicant involved “serious and disgusting conduct”, the applicant submits that there are no details before the Commission as to exactly what this conduct is. As a model litigant, the respondent is obliged to put these details in evidence.
The applicant submits that he has been a model employee of the respondent, and that after about 20 years of employment was simply “marched out the door” with no indication of what the allegations against him were. The applicant submits that his dismissal by the respondent was not justified.
The applicant points to the only two letters on which the respondent relies, containing broad allegations such as not to justify the description of “serious and disgusting”. The applicant questions as to whether he is deserving of such treatment having regard to his length of service with the respondent and lack of any previous disciplinary action against him.
The applicant refers to what he stated in his own hand in the claim form attached to the ARD when asked therein “What happened and how were you injured?” The applicant notes that he supplied the names and daytime contact details of two persons, Luke Perkins and Claudia Nadia McDonald, who witnessed the incident, yet the respondent has not produced any evidence from these persons, notwithstanding the fact that the Reply was lodged six months after the date of the claim form.
The applicant refers to his evidence in his statement dated 13 October 2021 in respect of the activities of Kate Williamson and her reputation for being a bit of a bully and “setting up” staff that she did not like. There is no statement from this person in evidence, so that the applicant’s evidence in unchallenged.

The applicant submits that, in effect, Ms Williamson was approaching co-workers and seeking out information which formed the basis of the allegations in respect of the applicant’s conduct. The applicant submits that Ms Williamson was not commissioned by the respondent to undertake an investigation, and there is nothing to indicate that an investigation should have been undertaken by this person. Any such investigation should be undertaken by human resources. The applicant submits that Ms Williamson conducted her investigation in an ad hoc and ill-conceived fashion. In essence, according to the applicant, it was a “witch hunt”.
The applicant submits that the letter of 26 April 2022 cannot be looked at in isolation, and that simply to proffer the correspondence is a “woefully inadequate” basis on which to ground the denial of liability in accordance with the s 78 notice. That letter cannot be regarded as the whole or predominant cause of the applicant’s injury.
The applicant submits that Dr Samuell, in giving his opinion that the suspension from employment was the substantial cause of the applicant’s condition, did not have a history of events leading up to the delivery of that letter to him. On the other hand, Dr Chow did record in his report dated 29 November 2021 the history of events leading up to delivery of the letter on 26 April 2022, and the suspension from work thereafter. This history is in accord with the evidence in the applicant’s statement dated 13 October 2021 and the further details supplied in the supplementary statement dated 22 April 2022.
Dr Chow provides an opinion, based on the history he received and recorded, that the applicant’s condition was not purely related to the investigation and the applicant being stood down from work, but in part at least, due to the fact that the applicant was experiencing some complex dynamic difficulties before management decided to investigate the allegations and put in place the stand down from work. The applicant submits that his evidence as to what occurred leading up to his stand down from work is unchallenged.
The applicant submits that the onus is on the respondent to show the reasonableness of its actions, and that it has failed to do this because:
(a)    it failed to show him where the information alleged against him came from;
(b)    the information was assembled by a person who was not qualified and unauthorised to investigate, and who had a grievance;
(c)    the person gathered the information who was trawling through the workplace looking for complaints, and
(d)    as a long term employee of the respondent with an exemplary record, the applicant should have been provided with details of the allegations against him before he was stood down.
The applicant submits that the letter of 19 May 2021 refers to “preliminary investigations” that have given rise allegations concerning his workplace behaviours, and that this is in contrast with the indication conveyed by the respondent’s letter to him of 26 April 2021, three weeks earlier, that further investigation would be carried out.
On the issue of incapacity, the applicant submits that the opinion of Dr Chow that he is totally unfit for work should be accepted. The doctor assessed Mr Nicolaides in November 2021, Dr Chandra certified him unfit up until 4 January 2022, and he states on 22 April 2022 that he has been left unwell and continues to struggle from a psychological perspective. The ARD was filed shortly after the expiration of the period of incapacity in the last certificate of capacity in evidence. The applicant is entitled to assert continuing total incapacity for work in accordance with the doctrine of continuation.
The applicant submits that he is entitled to an award in his favour pursuant to s 36 of the 1987 Act from 24 May 2021 for 13 weeks, and thereafter pursuant to s 37. The applicant asserts that his PIAWE to be used for calculation of his weekly benefits entitlement is $1,265.70. Any award for weekly benefits should allow for credit to be given to the respondent for payments made to him during the period claimed.
The applicant refers to:
· Temelkov v Kemblawarra Portuguese Sports & Social Club Ltd[16], and
· St George Leagues Club Ltd v Wretowska[17],
in support of his submission that the injury he suffered must be shown to be wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the respondent with respect to discipline, and/or dismissal.
[16] [2008] NSWWCCPD 96 (Temelkov).
[17] [2013] NSWWCCPD 64 (Wretowska).

Respondent in reply

The respondent submits that it is insufficient for the applicant to assert that he “felt uncomfortable” as evidence that he was suffering from a psychological injury, or the onset thereof, prior to being given the letter of 26 April 2021 and the meeting of that day. According to the statement of Kevin Jones, the applicant was visibly upset by the allegations and his suspension on that day.
In respect of events leading up to 26 April 2021 the respondent submits that it was supposition only on the part of the applicant that Ms Williamson was carrying out some sort of a vendetta against him.
The respondent submits that the allegations against the applicant were set out in inordinate detail in the attachment to the letter from Sparke Helmore dated 19 May 2021, and the seriousness thereof had to be considered when looking at the action taken against the applicant by the respondent.
The respondent says that the applicant “cannot have it both ways” when submitting that the respondent has not adduced evidence to support the allegations against the applicant. The respondent refers to the objections raised to parts of its evidence attached to the AALD dated 8 March 2022, made at the arbitration hearing on 13 April 2022. The respondent has tried to produce evidence to support the detailed allegations of fact made against the applicant, but been prevented from doing this by the objections raised by the applicant.
The respondent rejects the applicant’s submission that Kate Williamson was not the appropriate person to investigate allegations of improper conduct on the part of the applicant, and that she was trying to elicit evidence in support of the allegations from other persons. The allegations had to be investigated, and there is nothing to suggest that Ms Williamson should not be involved in the investigation.
In respect of the dispute between the parties as to the correct PIAWE, the respondent refers to [68] of the Personal Injury Commission Rules 2021 (the Rules), which it submits places the obligation on the applicant to lodge a schedule of earnings where the amount of weekly compensation or statutory benefits is in dispute. The respondent submits that the applicant has not done this.

FINDINGS AND REASONS

Injury wholly or partly caused by action taken by the respondent

At [110] Roche DP in Wretowska considered this question, with reference to the facts in that case, in the following terms:
“It is trite law that a condition can have multiple causes (ACQ Pty Ltd v Cook[2009] HCA 28 at [25] and [27]). That is especially so in cases concerning a psychological injury where, in many cases, multiple events over a long period have contributed to the injury. Just because Ms Wretowska stopped work after the events of 12 and 14 November 2011, and did not have time off work before that time and did not seek treatment for emotional conditions until 14 November 2011, does not mean that those events were the whole or predominant cause of her injury. It is necessary to look at the whole of the conduct alleged to have caused the injury and to consider the evidence in light of that conduct.”
In this case Mr Nicolaides submits that events leading up to what occurred on 26 April 2021 were in part, causative of the psychological condition from which he suffered shortly after that date. This submission is supported by the opinion of Dr Chow who expresses the opinion that the condition is not purely related to the investigation and being stood down from work, after noting of the applicant that:
“It would appear that he was experiencing some complex dynamic difficulties before management decided to investigate the allegation and stood him down from work.”
The applicant’s evidence as to what occurred is summarised at [4]-[7] above, based on his statement dated 13 October 2021. At [5] of that statement the applicant says, with reference to what he had been told by the lifeguard to whom he spoke in early April 2021:
“It was also brought to my attention that other staff was [sic, were] talking about this which included a conversation between two staff making reference to ‘a need for people to be punished’ . This was being discussed in a way that other staff could hear and did hear and contributed to the spreading of rumours at this time.”
The applicant’s reaction, after he spoke to Kate Williamson about the rumours and who responded that she could not speak about it because she was undertaking an investigation, is expressed at [8] of his statement as follows:
“My immediate thought was that it wasn't especially confidential if many staff was [sic, were] talking about it and rumours were starting to swell about who had said what and what it was alleged that had been done. Shortly after I heard from a staff member that many people within the organisation had been approached by Kate Williamson and asked questions about the conduct of male staff. This felt very odd, because it was inconsistent with what Kate Williamson had said. She suggested that it was confidential and that only one person had been spoken to, yet there were many people now talking about it and it seemed apparent that there were multiple people that had been spoken to.”
The applicant then goes on to mention his understanding that any investigation would be undertaken by human resources. He then lodged his grievance with the respondent to which he received no response. He says that within the workplace the rumours continued to swell.
Mr Nicolaides asserts in this evidence that he had no inkling that he was the subject of the investigation by Ms Williamson. This is in accordance with [6] of his statement where he says that he wasn’t aware that his name had been mentioned but was concerned generally if female staff were being asked about any male staff at all.
The fact that the applicant had a good employment record with the respondent and had a solid work history is not disputed by the respondent, and is confirmed by what he told Dr Chow who recorded with reference to the applicant that, before being stood down, “There were no issues at work prior to this.”
Dr Chow recorded a history of the events leading up to 26 April 2021. He also notes in his report that the applicant:
“…stated that the whole situation has been puzzling to him as he was helping the two female staff the week and they were interacting fine before they made the false allegation. He suspects the accusation originated from someone else and that there is a ‘witch hunt’ happening at work. He stated that the lives of 3 male staff are being turned upside down as a result. The other two workers have resigned, but he stated that he is determined to clear his name.”
Dr Samuell’s report dated 13 September 2021 does not contain a history of events leading up to what occurred on 26 April 2021. Accepting the incorrect date of the suspension of Mr Nicolaides noted under “History” in the report, the chronology of events in the report commences with the applicant’s suspension on 26 April 2022. Until that day, Dr Samuell records that the applicant says that he was not aware of any complaints and that it caught him by surprise. Dr Samuel notes that that comment seems to be at odds with the narrative provided by Mr Nicolaides in his claim documents perhaps, although this is not clear, referring to the claim form dated 4 June 2021. Dr Samuell later records in the History that the applicant says that he did not know why the current complaints were occurring, and that one of the complainants he was helping daily would thank him. That person never gave him any indication of being uncomfortable with him, and that he was taken aback with the allegations. He said the same of the other complainant.
In the claim form dated 4 June 2021 referred to at [11] above, the applicant does say in response to a question asking what happened and how the injury occurred:
“About 4 weeks before I lodged a grievance I was advised other staff had heard a supervisor was asking if I had ever acted inappropriately.”
This statement is at odds with what Mr Nicolaides says at [6] of his statement dated 13 October 2021 that when he approached Kate Williamson he wasn’t aware that his name had been mentioned but was concerned generally if female staff were being asked about male staff at all.
Dr Chow, when asked if he considered if the applicant’s employment to be the main contributing factor to the injury suffered by him said:
“Yes, I do consider Mr Nicolaides’ employment to be the main contributing factor to the injury suffered. He stated that there were rumours spread against him for a number of weeks regarding the female colleagues. He eventually raised an aggrievance claim against the female Aquatic Coordinator. He stated that he was then stood down as a result of the allegation against him.”
This would also suggest that the applicant was aware before 26 April 2021 that his name had been mentioned in the rumours in respect of inappropriate conduct.
Notwithstanding this apparent discrepancy, I accept that the applicant was concerned in the weeks leading up to 26 April 2021 as to the rumours that were spreading in the workplace, and about the investigation being carried out by Ms Williamson. It is understandable that, whether or not the applicant was aware that his name had been mentioned in that period, he would be concerned and worried about the developing situation. He was a union delegate, aware of the procedures by which inappropriate conduct should be investigated, and an employee of long standing with no previous problems in his employment with the respondent. He had reservations about Ms Williamson. Whether or not such reservations were justified is irrelevant. It is the applicant’s perception of what was unfolding in the workplace which must be considered. They were real events which actually occurred in the workplace, and were perceived by the applicant as creating an offensive or hostile working environment[18]. There is no requirement that the applicant’s perception of the events must have been one that passed some qualitative test based on an “objective measure of reasonableness”, although I observe that the applicant’s response to the rumours was not unreasonable. The events do not have to be the sole cause of the applicant’s injury.
[18] See Attorney General’s Department v K [2010] NSWWCCOD at [52].
The onus is on the respondent to show that injury suffered by the applicant was solely or predominantly caused by the action it took or proposed to take with respect to discipline, primarily, although it also relies on dismissal under s 11A of the Workers Compensation Act 1987 (the 1987 Act).
“Wholly” or “predominantly” are separate concepts and a finding of one or the other needs to be considered. Having regard to what I have summarised above, I find that the respondent has not discharged the onus on it to show that the psychological injury suffered by the applicant was wholly caused by the action it took with respect to discipline and/or dismissal of the applicant.
At [79] in Temelkov Roche DP considered the concept of causation in workers compensation claims and the phrase “predominantly caused” in the following terms:
“The leading authority on causation in workers compensation claims is Kooragang Cement Pty Ltd v Bates(1994) 35 NSWLR 452 (‘Kooragang’) where it was observed that causation is a question of fact to be determined on the evidence in each case. That case concerned the question of whether the death of a worker had ‘resulted from’ the relevant work injury. The present matter concerns whether ‘the injury was wholly or predominantly caused by reasonable action’. 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.”
The applicant was aware of the rumours of inappropriate conduct towards females in the workplace from about early April 2021. He was stood down from his position and sent home on 26 April 2021, and not informed of the specific allegations implicating him until 19 May 2021 when he received the letter from Sparke Helmore of that date. Thus, it was a period of almost two months during which the applicant had been aware of rumours of inappropriate conduct towards females in the workplace. In this circumstance, and having regard in particular to the opinion of Dr Chow and the history on which such opinion is based, I find that the respondent has not discharged the onus in it to show that the psychological injury suffered by the applicant was predominantly caused by the action it took.

Reasonable action

In the event that I am wrong in the findings in [71] and [73] above, I will consider if the conduct of the respondent with respect to discipline, and/or dismissal, was reasonable.
The applicant’s employment with the respondent came to an end in March 2022 when he says in his supplementary statement he was made redundant by his employer. It is unclear if that was by way of retrenchment and/or dismissal. However that is long after the events of April and May 2021. The respondent in submissions did not discount relying on dismissal with respect to which action was taken against the applicant. The term “dismissal” in s 11A should be given its ordinary meaning[19]. A worker is dismissed when an employer terminates his or her employment without the worker’s consent. This extends to not only the dismissal, but also to reasonable action taken or proposed to be taken, with respect to the dismissal.
[19] Chisholm v Thakral Finance Pty Ltd [2011] NSWWCCPD 30 at [129].
The applicant may have been dismissed in March 2022, although there is insufficient evidence to determine the circumstances surrounding the applicant’s redundancy from his employment. It seems that the respondent’s principal, if not only, reliance of actions under s 11 A must be in respect of discipline. The applicant did not make any submissions in this regard.
Whether an employer’s action was “reasonable” is determined by an objective test. An employer cannot rely on s 11A because it held a genuine belief that its action was reasonable if in all the circumstances the Commission determines the action not to be reasonable[20]. The question of whether the action is reasonable is one of fact involving an objective test and is not a matter of law[21].
[20] Jeffrey v Lintipal Pty Ltd [2008] NSWCA 138.
[21] Commissioner of Police v Minahan (2003) 1DDCR 57; [2003] NSWCA 239.
In this case the applicant was taken by surprise when on 26 April 2021 he was confronted with allegations that he had acted improperly towards females in the respondent’s employ. This is notwithstanding that his name may have been mentioned in rumours in respect of inappropriate conduct before that date. He was understandably and obviously upset with being confronted with this allegation on 26 April 2021. This is confirmed by Mr Jones in his statement. The applicant denies the allegations. It was not until 19 May 2021 that Sparke Helmore supplied Mr Nicolaides with advice that their “…preliminary investigations” had given rise to allegations concerning his workplace behaviour. Four allegations of fact were set out in detail in an attachment to the letter.
The respondent submits that the applicant “cannot have it both ways” when submitting that it has not adduced evidence to support the allegations against the applicant because of objections it raised to certain evidence at the hearing on 13 April 2022. These were dealt with in the Certificate of Determination and Statement of Reasons dated 16 May 2022. I do not accept this submission. The applicant’s objection to the evidence was upheld because of the way in which the respondent sought to introduce it into the proceedings at such a late stage, thereby not giving the applicant sufficient opportunity to properly address it. The respondent chose not to supply the applicant with the names of the persons who made those allegations, or their statements, at the time the ss 78/287A notices were issued.

The genuine belief perhaps held by the respondent that its actions with respect to disciplining the applicant cannot be relied upon by the respondent if in all the circumstances the Commission decides that the respondent’s action was not reasonable. The respondent submits that the allegations made against the applicant do not need to be shown to be true, but it is the action taken by the respondent that must be shown to be reasonable. That is correct. The respondent then poses the question “What more could it have done?” That is not something requiring of an answer by the Commission, which is tasked with considering the evidence as a whole and determining, objectively, if the respondent’s action was reasonable. The onus is on the respondent to do this.
In my view, the respondent did not act reasonably in the circumstances. It was dealing with a long standing employee with an excellent employment record. Through Kate Williamson’s investigation it allowed rumours of improper conduct by a number of workers to spread throughout the workplace. It is questionable as to whether or not Ms Williamson was the person who should have been collecting evidence of allegedly improper conduct, and I make no finding thereon. However, there is no statement from her, so that the applicant’s evidence in respect of her response to the direct approach he made to her made can be accepted. I do not accept that when he spoke to her, she had only spoken to one person and that it was all in confidence. Whatever confidence there was surrounding her investigation had been breached by that time. It is not necessary to make a finding on the applicant’s allegation that Ms Williamson had a reputation for being a bit of a bully and “setting up” staff she did not like.
Further, the respondent failed to answer the applicant’s grievance application which he lodged as a result of the concerns he had over the conduct of Ms Williamson and the rumours circulating in the workplace. Mr Nicolaides was a union delegate and was aware of the internal processes about how an investigation should be undertaken.
The applicant was then in effect ambushed by the allegations against him when presented with the letter from the respondent dated 26 April 2021, suspended from work, and sent home. He was visibly upset by the allegations and his suspension. He had no particulars of the allegations against him. These were not provided until 19 May 2021, by which time he was too unwell to participate in the video conference proposed by Sparke Helmore for 21 or 24 May 2021. The fact that Mr Nicolaides was suspended on full pay, and that an investigation was to be conducted in accordance with the Blacktown City Council Enterprise Agreement 2018, are factors to be considered along with all of the other evidence but not determinative of the issue as to whether the respondent acted reasonably.
I find that the action taken or proposed to be taken by or on behalf of the respondent with respect to discipline was not reasonable.

Incapacity

There are a series of certificates of capacity/certificates of fairness in evidence issued by Dr Chandra covering the period from 24 May 2021, when the applicant’s claim for weekly benefits commences, until 4 January 2022[22]. In all of those certificates Dr Chandra certifies that the applicant has no current work capacity for any employment. The clinical notes of Dr Chandra cease with a record of the applicant consulting the doctor on 23 September 2021[23], when the history recorded is “…still not in a mental condition to return to work.” As at 15 November 2021 Dr Chow, who examined the applicant via telehealth on that day, certified that the applicant currently had no capacity for work. In respect of treatment the doctor said that Mr Nicolaides will need more psychological sessions to help him contain and manage his emotions in order to address the workplace issues.
[22] ARD pp 69-86.
[23] ARD p 30.
The applicant says in his supplementary statement dated 22 April 2022 that his injuries have left him unwell and that he continues to struggle from a psychological perspective.
Dr Samuell also assessed the applicant via video link, on 17 August 2021. He gave a diagnosis of panic disorder. In the absence of complicating factors, Dr Samuell gave a diagnosis that was “strongly positive”, and considered that it would be reasonable for the applicant to consult with a psychologist for around eight sessions and take an antidepressant medication for this disorder. Despite the doctor’s diagnosis of Mr Nicolaides, he said that his symptoms were at the mild end of the spectrum and cause little in the way of disability. Dr Samuell said that the applicant could work at an alternative location from the complainants performing normal hours and duties.
The respondent’s submissions on incapacity are referred to above at [31]-[34]. The applicant submits that he is entitled to an ongoing award on the basis that he has no current work capacity, that is in accordance with meaning of that term in Sch 3 of the 1987 Act,
“…a present inability arising from an injury such that the worker is not able to return to work, either in the worker’s pre-injury employment or in suitable employment.”
Schedule 3 contains a definition of a worker with current work capacity as follows:
“An injured worker has current work capacity if the worker has a present inability arising from the injury such that the worker is able to return to the worker’s pre-injury employment, or is able to return to work in suitable employment, but the weekly amount that the worker has the capacity to earn in any such employment is less than the weekly amount that the worker had the capacity to earn in that employment immediately before the injury.”
“[S]uitable employment” is defined in s 32A of the 1987 Act as follows:
“suitable employment, in relation to a worker, means employment in work for which the worker is currently suited—
(a) having regard to—
(i) the nature of the worker’s incapacity and the details provided in medical information including, but not limited to, any certificate of capacity supplied by the worker (under section 44B), and
(ii) the worker’s age, education, skills and work experience, and
(iii) any plan or document prepared as part of the return to work planning process, including an injury management plan under Chapter 3 of the 1998 Act, and
(iv) any occupational rehabilitation services that are being, or have been, provided to or for the worker, and
(v) such other matters as the Workers Compensation Guidelines may specify, and
(b) regardless of—
(i) whether the work or the employment is available, and
(ii) whether the work or the employment is of a type or nature that is generally available in the employment market, and
(iii) the nature of the worker’s pre-injury employment, and
(iv) the worker’s place of residence.”
There is little indication in the evidence as to the applicant’s education skills or work experience apart from that with the respondent. He was a union delegate which would indicate some administrative capacity, knowledge of work practices and appropriate conditions. Having regard to the recommendations for ongoing psychological treatment and ingestion of antidepressant medication made both by Dr Chow and Dr Samuell, the opinion of Dr Samuell as to his capacity for work at an alternative location, and the date to which Mr Nicolaides has been certified by Dr Chandra to have no current work capacity for any employment, I do not think that there is sufficient evidence to find that Mr Nicolaides has no current work capacity beyond 4 January 2022. There is sufficient evidence on which to base a finding that Mr Nicolaides has no work capacity until that date. Thereafter he has a capacity for suitable employment at a workplace other that the respondent.
The respondent submits that the applicant has a capacity to earn in suitable employment of about $500 per week, and I accept that figure.

Pre-injury average weekly earnings

The submissions of the parties in respect of PIAWE are set out in [35], [36] and [56] above. The applicant has not filed a schedule of earnings as required by the Rules but submits that PIAWE is $1,265.70, shown as the “Base Income” on a Payment Advice for the period from 14 January 2022 to 20 January 2022 attached to the ARD. The respondent points out that is not evidence of pre (emphasis added) average weekly earnings. The respondent on the other hand submits that PIAWE are $1,225.03 based on material which it says was forwarded to the applicant, but which is not in evidence before the Commission. Unfortunately, the parties were unable to come to agreement on a figure, notwithstanding being urged to, and given an opportunity to do so, before commencement of the hearing on 10 August 2022. At the original telephone conference in the proceedings on 22 February 2022 I was advised by the solicitors for the parties that an agreement om PIAWE was anticipated. That has not occurred.
In the circumstances I propose to find PIAWE at one half of the $40 difference between the figures put forward by the applicant and the respondent.
I find PIAWE of $1,245.

Entitlement to weekly benefits

For the periods during which the applicant had no current work capacity he is entitled to awards in his favour pursuant to s 36(1) of the 1987 Act for the first entitlement period, that is 13 weeks from the date such benefits are claimed, and thereafter during the second entitlement period pursuant to s 37(1) until 4 January 2022. From 5 January 2022 to date and continuing he is entitled to an award at 80% of PIAWE less $500 per week representing his ability to earn in suitable employment.
For the first entitlement period from 24 May 2021 until 23 August 2021, 95% of PIAWE is $1,182.75. For the second entitlement period from 24 August 2021 until 4 January 2022, 80% of PIAWE is $996. Thereafter the applicant’s entitlement pursuant to s 37(3) of the 1987 Act is $496 per week.
The respondent is to have credit for payments made to the applicant since he was suspended from work.

Section 60 expenses

The applicant is entitled to an award in his favour for medical and related expenses pursuant to s 60 of the 1987 Act.

SUMMARY

The psychological injury sustained by the applicant arising out of or in the course of his employment with the respondent was not wholly or predominantly caused by action taken or proposed to be taken by or on behalf of the respondent with respect to discipline.
The action taken or proposed to be taken by or on behalf of the respondent with respect to discipline was not reasonable.
The applicant had no current work capacity from 24 May 2021 to 4 January 2022.
The applicant has had current work capacity from 5 January 2022.
The applicant’s PIAWE are $1,245.
The applicant’s ability to earn in suitable employment from 5 January 2022 is $500 per week.
The respondent is to pay the applicant weekly benefits compensation as follows:
(a)    24 May 2021 to 23 August 2021 - $1,182.75 per week pursuant to s 36(1) of the 1987 Act;
(b)    24 August 2021 to 4 January 2022 - $996 per week pursuant to s 37(1) of the 1987 Act, and
(c)    5 January 2021 to date and continuing - $496 per week pursuant to s 37(3) of the 1987 Act.
The respondent is to have credit for payments made to the respondent since he was suspended from work.
The respondent is to pay the applicant’s costs and expenses pursuant to s 60 of the 1987 Act.

[2022] NSWPIC 455

15 August 2022