O'Hare v South Eastern and Illawarra Area Health Service

[2006] NSWWCCPD 81

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:O’Hare v South Eastern and Illawarra Area Health Service [2006] NSWWCCPD 81

APPELLANT:  Joan O’Hare

RESPONDENT:  South Eastern and Illawarra Area Health Service (formerly South Eastern Sydney Area Health Service)

INSURER:GIO General Ltd

FILE NUMBER:  WCC 15437-04

DATE OF ARBITRATOR’S DECISION:          19 January 2005

DATE OF APPEAL DECISION:  11 May 2006

SUBJECT MATTER OF DECISION: Section 11A of the Workers Compensation Act 1987; treatment of the evidence

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant: Maurice Blackburn Cashman, Lawyers

Respondent: Phillips Fox, Lawyers

ORDERS MADE ON APPEAL:  The decision of the Arbitrator is confirmed.

There is no order as to the costs of this appeal.

BACKGROUND TO THE APPEAL

1. On 9 February 2005, Joan O’Hare sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against the decision of an arbitrator dated 19 January 2005. The Respondent to the appeal is the South Eastern and Illawarra Area Health Service (formerly the South Eastern Sydney Area Health Service) (‘the Respondent’), and its workers compensation insurer is GIO General Ltd (‘GIO’).

1. Ms O’Hare was born on 27 October 1935 and is aged 70. After many years in nursing, she was employed as Nurse Unit Manager with St George Child and Family Health Service. In October 2002, Ms O’Hare’s husband died from cancer and, shortly afterwards, she developed a motor neurone disease which impeded her speech.

1. On 14 November 2003, Ms O’Hare’s direct supervisor, Jennifer (Jo) Wills, the Nursing and Patient Services Manager for the Division of Women’s and Children’s Health at St George Hospital, went to see the Director of Nursing, Jenny Phillips. She expressed concerns for Ms O’Hare’s health, both on her own account and on account of other staff who worked in Ms O’Hare’s Unit who had spoken with Ms Wills about this. At this meeting, according to both Ms Wills and Ms Phillips, it was decided to ask Ms O’Hare to take three days paid leave to enable her to reflect on the concerns for her health. Ms Wills states she told Ms O’Hare of this at a meeting later that afternoon, when she also asked Ms O’Hare to attend a meeting both with her and Ms Phillips on 20 November 2003. At this second meeting, there was discussion of the concerns for Ms O’Hare’s health and how this might be affecting her behaviour and leadership. Ms Phillips agreed to employ an external consultant to review Ms O’Hare’s section. Ms Wills and Ms Phillips had a third meeting with Ms O’Hare on 24 November 2003, when it was agreed that Ms O’Hare would go on leave the next day, a few days earlier than the leave she had booked for 1 December 2003, and that the situation would be reviewed in late January 2004 when she returned from leave. That meeting never took place.

1. On 12 December 2003, Ms O’Hare’s general practitioner, Dr Ben Balzer, issued a WorkCover medical certificate diagnosing acute adjustment disorder and stating that Ms O’Hare was unfit for work from 25 November 2003 to 16 January 2004. The date of injury was stated to be 24 November 2003. It appears that on 17 December 2003 Ms O’Hare made a workers compensation claim in respect of this condition. On 19 December 2003, she lodged a formal grievance against Ms Phillips and Ms Wills.

1. On 27 September 2004, the Commission registered Ms O’Hare’s ‘Application to Resolve a Dispute’ in respect of her claim for weekly compensation of $1,400 per week from 14 November 2003 to date and continuing, and for medical, hospital or related expenses. The Respondent’s ‘Reply’ was received on 21 October 2004. Ms O’Hare’s solicitors later amended her claim for weekly compensation to the period 24 November 2003 to 16 June 2004 because her non work-related motor neurone disease rendered her totally unfit for work thereafter. On 26 November 2004, the Arbitrator conducted a teleconference with the parties and, on 13 January 2005, conciliation having proved unsuccessful, he conducted an arbitration hearing. The Arbitrator gave an oral decision at the conclusion of the hearing and a Certificate of Determination was issued on 19 January 2005 in the terms set out below.

THE DECISION UNDER REVIEW

1. The Certificate of Determination, dated 19 January 2005, records the Arbitrator’s orders as follows:

“1. There is an award for the Respondent, in relation to the Applicant’s claim for weekly compensation pursuant to section 40 of the Workers Compensation Act 1987.
2. There is no order as to costs.
3. I determine that this matter which went directly to arbitration, was a complex matter as provided for by Regulation 129 of the Workers Compensation (General) Amendment (Costs) Regulation 2001.”

1. In his Statement of Reasons, given orally at the conclusion of the hearing, the Arbitrator noted Ms O’Hare had served as Nurse Unit Manager of the Child and Family Health section at St George Hospital for many years and with a team of people who became concerned for her health and eventually raised this with the Hospital management. As a result, her manager interviewed Ms O’Hare on 14 November 2003. The Arbitrator found (transcript pages 73 to 74):

“at the meeting on the 14^th, concern was expressed for the applicant’s state of health, and I would find that it was done very properly on the basis of a genuine concern by the staff and of the hospital – by her own staff and by the management staff as to her state of health generally. However, I accept Mr Catsanos’s submission that underlying that, in fact, the only reason for the matter to be referred on to senior management and the only reason for senior management to sit down with the applicant was to talk about how her health was affecting the performance of her team and the performance of the women’s and children’s health service. That, ultimately, is their concern for the delivery of that service, and if there was some impediment to it, then they were naturally required as managers of the service, or managers of the hospital at a senior level and in charge of that service, to be involved.

I don’t accept that the view developed by the applicant was correct ... I think the approach of the hospital in suggesting that she take time off was appropriate at that stage. It was a concern about performance ...

I think the matter is properly dealt with under section 11A ... I am going to accept that she was suffering from some condition of depression or adjustment disorder at the time ... I’ll just deal with it under 11A because whether it was caused or not by her work, I would hold that the hospital are able under section 11A to properly argue the case and say that the action they took was reasonable both on the 14^th and on the subsequent meetings on the 20^th and 24^th, and I find that on this basis: I think that the suggestions by the hospital to take time off and consider her medical condition was appropriate.”

1. The Arbitrator referred to a letter from Dr Balzer, dated 19 November 2003, acknowledging that Ms O’Hare was suffering from a neurological condition affecting her voice, but stating that she was “not suffering from any medical condition that impacts upon her ability to perform her duties”. The Arbitrator said that when, at the meeting on 20 November 2003, Ms O’Hare presented Ms Wills and Ms Phillips with this medical certificate, this had the effect of turning the discussion to one about performance, and the agreement to employ a management consultant to review the women’s and children’s health service “was really in response to an insistence by the applicant to understand better in what way her performance was not adequate or was failing” (transcript page 74). The Arbitrator found the letter Ms O’Hare wrote to her staff after the first meeting on 14 November 2003 was inappropriate. Moreover, her letter to Ms Phillips dated 2 December 2003, in which Ms O’Hare spoke of being instructed to clear her personal belongings from her office, reflected “an unreasonable view formed by the applicant”. Ms Phillips responded by letter dated 22 December 2003, enclosing minutes of the two meetings, confirming Ms O’Hare’s status as Nurse Unit Manager, although on leave until January 2004, and also confirming that a consultant would be employed to review the service after “the festive season” (transcript page 75).

1. The Arbitrator rejected the submission that Ms O’Hare was being discriminated against because of her age – the situation arose out of concerns for her health. He rejected the suggestion that a prior decision had been made about her position. If this had been the case, there would have been no need for the Hospital to discuss employing a management consultant to conduct a review. In conclusion, the Arbitrator made an award in favour of the Respondent because “the evidence simply does not support the applicant’s contentions” (transcript page 76).

ISSUES IN DISPUTE

1. Ms O’Hare’s solicitors submit the Arbitrator made errors in his application of section 11A of the Workers Compensation Act 1997 (‘the 1997 Act’), in his findings of fact and treatment of the evidence, and by failing to provide adequate reasons. The parties’ submissions on these issues are considered more fully below.

ON THE PAPERS REVIEW

1. Section 354(6) of Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) states:

“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

1. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances. 

1. Neither party sought to adduce fresh evidence.

LEAVE

1. Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act. The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act. With regard to section 352(2), I note Ms O’Hare claims weekly compensation of $1,301.90 from 24 November 2003 to 4 January 2004, $1,347.50 from 5 January 2004 to 23 May 2004, and $323.24 from 24 May 2004 to 16 June 2004. She also claims medical expenses amounting to $1,512.85. The total amount claimed exceeds $5,000 and constitutes 100% of the amount in issue.

1. I am satisfied that although the Arbitrator’s decision did not involve an ‘award’, the decision does “have a real capacity to put the amount of compensation, determined by reference to the decision or the claim (Sheridan v Coles Supermarkets Australia Pty Ltd [2003] NSW WCC PD 3), in issue in the appeal (as in the case of the filing of a ‘Reply’ (ADCO Constructions Pty Ltd v Ferguson [2003] NSW WCC PD 21))” (Fletchers International Exports Pty Ltd v Regan [2004] NSW WCC PD 7 at page 5). I am therefore satisfied that the section 352 threshold has been met, and I grant leave to appeal.

SUBMISSIONS, DISCUSSION AND FINDINGS

1. The role of the Presidential Member on appeal is to review the Arbitrator’s decision as a whole. The review is not a rehearing. In this case, the Appellant must demonstrate that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172; The King Island Company Limited v Deery [2005] NSW WCC PD 1) in order to enliven the Presidential Member’s power to interfere with the Arbitrator’s decision pursuant to section 352(7) of the 1998 Act. Where the weight accorded to the evidence by the Arbitrator is challenged, Deputy President Fleming’s comment in Knight v Eyles Nominees Pty Ltd [2004] NSW WCC PD 73, at paragraph 40, should be borne in mind:

“Interference with an Arbitrator’s discretionary judgement as to the weight of evidence should only be done where it is manifestly obvious that the discretion has so miscarried that it has not been exercised fairly and lawfully.”

Application of section 11A

1. Ms O’Hare’s solicitors submit that section 11A of the 1987 Act should not have been applied to Ms O’Hare. Section 11A(1) states:

“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.”

1. I note Ms Wills said in her statement, taken on 4 and 10 March 2004, that at her meeting with Ms O’Hare on 14 November 2003, she told Ms O’Hare that she and Ms Phillips would like her to have three days off on full pay to enable her to reflect on the concerns raised with her. Ms Wills referred to this leave being “offered” to Ms O’Hare (paragraphs 22 and 23). Ms Phillips said in her statement, taken on 8 and 10 March 2004, that at her meeting with Ms Wills earlier on 14 November 2004, she decided that Ms O’Hare “should be granted 3 days paid leave to seek medical assessment and counselling” (paragraph 10). Ms O’Hare, in her document entitled “Sequence of Events”, and in her letter to Ms Wills dated 15 November 2003, refers to having been “directed” to take three days off.

1. In its submissions, the Respondent referred to the decision of the Compensation Court of NSW in Yeo v Western Sydney Area Health Service [1999] NSWCC 1, at paragraph 53, where Neilson J said:

“The further matter which I should add is this. Townsend v The Commissioner of Police (unreported, McGrath CJ) is authority for the proposition that a misperception by a worker of otherwise innocuous matter, which misperception leads a worker to develop a psychiatric condition, does not constitute injury arising out of or in the course of employment. The applicant misperceived what was occurring in the interview with Mr Hughes on 10 August. It was completely irrational for him, on the evidence that I accept, for him to believe that Mr Hughes had an animus against him, that he had been prejudged in any way or that he was likely to have his services terminated. That irrational behaviour is a misperception of the real events which were going on. In accordance with Townsend v The Commissioner Of Police, the applicant would not succeed in the claim in any event merely because he had failed to establish that he had sustained an injury arising out of or in the course of his employment.”

1. The Respondent submits that the situation in the present case is similar and that Ms O’Hare misperceived what occurred at the meetings, and that it was this misperception that led her to develop a psychiatric condition rather than the psychiatric condition arising out of her employment. Thus, her employment was not a substantial contributing factor to such an injury as required by section 9A of the 1987 Act. Ms O’Hare’s solicitors cite Federal Broom Pty Ltd v Semlitch (1964) 110 CLR 626 as authority for the proposition that as long as the perception or misperception arises from the employment, it is work-related.

1. The Arbitrator did not distinguish between Ms O’Hare’s psychological condition after the meeting on 14 November 2003 and following the meetings on 20 and 24 November 2003. He merely accepted that Ms O’Hare was suffering from depression or an adjustment disorder and that it arose out of her employment.

1. Ms O’Hare’s solicitors contend that at the meeting on 14 November 2003, Ms Wills “went to great lengths” to emphasise that the “direction to stand her down had nothing to do with performance appraisal” (submissions page 3) – it was for health reasons, and so was not caught by section 11A. I do not accept Ms O’Hare’s evidence that she was given a “directive” or “direction” to stand down - the evidence of Ms Wills and Ms Phillips is more persuasive and indicates that Ms O’Hare misperceived what Ms Wills said to her during their meeting on 14 November 2003. Nor am I satisfied that Ms O’Hare suffered a psychological injury as a result of that meeting, although undoubtedly it led to her being anxious. I note, in particular, that although she may have been suffering from anxiety following this meeting, the medical certificate from Dr Balzer, dated 19 November 2003, indicates she was fit for work on that date.

1. With regard to the meetings on 20 and 24 November 2003, Ms O’Hare solicitors contend the meeting on 20 November 2003, at which she produced the medical certificate, “suddenly changed to a performance review, without any warning”. The evidence of Ms Wills and Ms Phillips is that this change was not premeditated, and that at the commencement of the meeting they emphasised their concern for Ms O’Hare’s health and that it was impacting on her ability “to lead the team and function as a leader” (Ms Wills’ statement paragraph 26). I note it was following the meeting on 24 November 2003 that Dr Balzer issued a medical certificate dated 12 December 2003 stating that he had examined Ms O’Hare on 28 November 2003 and 12 December 2003 and diagnosed Ms O’Hare as suffering from “Acute Adjustment Disorder”. In the certificate, Dr Balzer stated that Ms O’Hare’s employment was a substantial contributing factor to her injury, which occurred when she was “verbally stood down from position of NUM [Nursing Unit Manager] by DON [Director of Nursing] without notice”. In a later certificate dated 15 January 2004, Dr Balzer stated that Ms O’Hare continued to be unfit for work until 16 February 2004.

1. Thus, there is medical evidence to support a finding that Ms O’Hare was suffering from an injury after the meetings on 20 and 24 November 2003, and that evidence suggests that Ms O’Hare’s employment was a substantial contributing factor to the injury (section 9A). The question raised by Ms O’Hare’s solicitors is whether section 11A applies. They submit that the meetings were concerned with Ms O’Hare’s health or, in the alternative, that the Arbitrator should have found the Respondent’s actions on 20 and 24 November 2003 to be unreasonable because neither Ms Wills nor Ms Phillips forewarned Ms O’Hare that the meeting on 20 November 2003 was a performance appraisal or “disciplinary” meeting. The Respondent contends the meetings were concerned with Ms O’Hare’s performance, rather than with disciplining her.

1. Having considered the submissions and reviewed the evidence, I am not satisfied that Ms O’Hare’s solicitors have established that any error was made by the Arbitrator in relation to his application of section 11A. In my view, it was reasonable for the Arbitrator to find, on the basis of the evidence, that underlying the genuine concern expressed by the staff and Hospital management for Ms O’Hare’s health, was concern for how her health was affecting the performance of her team and the performance of the service for which she was responsible (transcript page 73). The health of a worker will in many instances affect the person’s work performance. While Ms Wills and Ms Phillips expressed their concern to be for Ms O’Hare’s health, and stated that they did not want to engage in a formal performance appraisal, their approaching Ms O’Hare about her health was in their roles as her supervisor and manager respectively, and while Ms Wills’ evidence, in particular, indicates she had a genuine concern for Ms O’Hare’s health, ultimately she, like Ms Phillips had managerial responsibility for the personnel under her supervision and that responsibility obviously included managing their performance.

1. Certainly, from the time, at the meeting on 20 November 2003, that Ms O’Hare provided a medical certificate stating she was “not suffering from any medical condition that impacts on her ability to work”, I am satisfied that this meeting and the subsequent meeting on 24 November 2003 were concerned with performance appraisal, albeit in its early stages. Clearly, the appraisal of Ms O’Hare’s performance had not reached the more formal stage usually associated with performance appraisal where a person’s performance is evaluated against specific criteria. In this instance, the Respondent’s managers had agreed to employ an external consultant to conduct a review of Ms O’Hare’s section first, and to review the situation when Ms O’Hare returned from leave in late January 2004.

1. In my view, there was also evidence to support the Arbitrator’s finding that the action taken by the Respondent’s management staff at the meetings on 14 November 2003 and on 20 and 24 November 2003 was “reasonable action”. I am not satisfied from Ms O’Hare’s evidence that her perception of events was correct. An objective consideration of the evidence in determining whether the Respondent’s actions were reasonable, leads me to conclude that Ms Wills’ suggestion to Ms O’Hare that she should take three days paid leave to reflect on her health and situation, was appropriate. Ms Phillips’ proposal, at the meeting on 20 November 2003, that a review of Ms O’Hare’s section be undertaken, also appears to me to be appropriate given Ms O’Hare’s denial that her health was affecting her performance. I note that at both the meetings on 20 and 24 November 2003, a support person from the NSW Nurses Association accompanied Ms O’Hare, and it appears that all the parties participated in the discussion at those meetings. There is also no evidence to support Ms O’Hare’s solicitors’ contention that Ms O’Hare was discriminated against due to her age or disability.

1. My conclusion on this issue, therefore, is that the psychological injury suffered by Ms O’Hare occurred following the meetings on 20 and 24 November 2003, and that this injury was predominantly caused by reasonable action taken by the Respondent with respect to appraisal of Ms O’Hare’s performance. Thus, section 11A of the 1987 Act applies and no compensation is payable to Ms O’Hare in respect of this injury.

Treatment of the evidence

1. Ms O’Hare’s solicitors submit the Arbitrator failed to consider Ms O’Hare’s evidence or accord it any weight, and “made findings and decisions either based on no evidence or manifestly against the evidence”. In particular, they submit the Arbitrator should not have found that Ms O’Hare misperceived the actions and/or intentions of the Respondent in respect of the “directive”. As discussed above, I am not satisfied that the Arbitrator erred in his treatment of the evidence. In my view, the evidence of Ms Wills and Ms Phillips is more persuasive and indicates that Ms O’Hare misperceived what Ms Wills said to her during their meeting on 14 November 2003.

Adequacy of reasons

1. Ms O’Hare’s solicitors submit the Arbitrator failed to provide any or adequate reasons for his decision. This submission was made before Ms O’Hare’s solicitors were provided with a copy of the transcript and were able to review the Arbitrator’s oral statement of reasons. In my view, the Arbitrator fulfilled his obligation under section 294(2) of the 1998 Act and Rule 73 of the Workers Compensation Commission Rules 2003 to provide adequate reasons for his decision. Moreover, there is nothing to indicate that the Arbitrator failed to exercise his duty “to fairly and lawfully determine the application” (Mayne Health Group t/as Nepean Private Hospital v Sarah Sandford [2002] NSW WCC PD 6, at paragraph 48).

DECISION

1. I am not satisfied that Ms O’Hare’s solicitors have made out any of their grounds of appeal, and the decision of the Arbitrator must therefore be confirmed.

COSTS

1. There is no order as to the costs of this appeal.

Robin Handley

Acting Deputy President  

11 May 2006

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

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