Podesta v The Hills Shire Council

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Podesta v The Hills Shire Council [2022] NSWPIC 122
APPLICANT:	Michael Podesta
RESPONDENT:	The Hills Shire Council
MEMBER:	Jill Toohey
DATE OF DECISION:	23 March 2022
CATCHWORDS:	WORKERS COMPENSATION - Psychological injury as a result of bullying and harassment; claim for weekly payments and medical expenses; whether events from mid-2017 to late 2020 caused or contributed to psychological injury; finding that to the extent that they contributed they were not the main contributing factor; whether injury wholly or predominantly caused by reasonable action taken or proposed to be taken with respect to discipline; finding that injury wholly or predominantly caused by action with respect to discipline; manner in which action taken was not reasonable; respondent failed to discharge onus; whether the worker had incapacity as a result; Held- worker entitled to weekly payments; general order for section 60 of the Workers Compensation Act 1987 medical expenses.
DETERMINATIONS MADE:	1. The applicant sustained psychological injury arising out of or in the course of his employment with the respondent (deemed date 5 February 2021). 2. The applicant’s injury was not wholly or predominantly caused by reasonable action taken by the respondent in respect of discipline. 3. The applicant had no capacity for employment from 5 February 2021 and continuing as a result of his injury. 4. The respondent to pay the applicant weekly compensation as follows: (a) from 5 February 2021 to 7 May 2021 at the rate of $1,567.50 pursuant to section 36 of the Workers Compensation Act 1987, and (b) from 8 May 2021 to date and continuing at the rate of $1,320 per week pursuant to section 37 of the Workers Compensation Act 1987, with credit for any sick leave credits. 5. The respondent to pay the applicant’s reasonably necessary medical expenses pursuant to section 60 of the Workers Compensation Act 1987.

STATEMENT OF REASONS

BACKGROUND

Michael Podesta (the applicant) commenced employment as a trades assistant for The Hills Shire Council (the respondent) around 2003. He moved into the role of mechanic and, from around 2016, into the role of workshop team leader.
Mr Podesta claims that, around 2016, he took on additional duties. When another worker left, he performed further additional duties. Around this time, he was promoted to the position of team leader. He was given to understand that he would be promoted to Workshop Coordinator but, following a restructure, that position was no longer available.
In mid-2017, a new Fleet Manager/Workshop Coordinator was appointed. Mr Podesta claims that, from that time up to late-2020, the new manager, Matthew Gallahar, subjected him and others to bullying, harassment and intimidation. In mid-2020, a group of workshop employees submitted a grievance against him. Mediation arranged by the respondent failed to resolve the situation and Mr Gallahar resigned a short time later.
In mid-November 2020, an anonymous letter was left on the desk of a new team leader with words to the effect of “We sacked the last one, be careful, you could be next. Don’t change things”.
On learning of the letter, the general manager, Michael Edgar, called an emergency meeting of the workshop team. When no one admitted being responsible, Mr Edgar advised them that the matter would be formally investigated. There is a dispute about the manner in which
Mr Edgar conducted this meeting.
Mr Podesta attended an interview with an investigator in early December 2020. He went on leave from 24 December 2020 and returned to work in late January 2021. He attended a further interview on 5 February 2021, following which he left work and has not returned.
Mr Podesta claims psychological injury with deemed date 5 February 2021, as a result of
Mr Gallahar’s actions from around mid-2017, continuing through to the meeting with
Mr Edgar and the subsequent investigation.
By an Application to Resolve a Dispute (ARD) registered in the Personal Injury Commission (the Commission) on 3 August 2021, Mr Podesta claims weekly payments from 5 February 2021 and continuing, and medical expenses.
By dispute notices issued on 30 April 2021 and 20 July 2021, the respondent disputes liability to compensate Mr Podesta. The respondent maintains that a significant number of the alleged events and incidents on which he relies as causing his psychological injury did not occur, or not in the manner alleged, and therefore were not the main contributing factor to his injury. The respondent concedes that the disciplinary investigation was probably the “main or predominant cause” of the injury but maintains that the action was reasonable action taken, or proposed to be taken, with respect to discipline.

ISSUES FOR DETERMINATION

The parties agree that the following issues remain in dispute:
(a)    whether Mr Podesta suffered a disease injury with deemed date 5 February 2021 to which his employment was the main contributing factor;
(b)    if so, was the whole or predominant cause of his injury reasonable action taken or proposed to be taken by the respondent in respect of discipline;
(c)    whether Mr Podesta has had incapacity as a result of any injury, and
(d)    whether he is entitled to compensation for medical expenses.
There is no dispute that Mr Podesta’s pre-injury average weekly earnings (PIAWE) are as set out in the ARD.

PROCEDURE BEFORE THE COMMISSION

The matter was first listed for conciliation/arbitration hearing on 2 November 2021. Mr Paul Perry of counsel appeared for Mr Podesta instructed by Ms Harman Kaur. Mr Fraser Doak of counsel appeared for the respondent instructed by Mr Will Murphy. The hearing was adjourned at the respondent’s request because financial documents provided by Mr Podesta were incomplete. There was no objection to the adjournment.
At the resumed hearing on 3 December 2021, there were a number of preliminary matters on which counsel wished to be heard including an application by the respondent for leave to cross-examine Mr Podesta, and objections to parts of his statement evidence. There were technical difficulties with the telephone and video links and, despite the best efforts of the parties and Commission staff, it was not possible to proceed.
To minimise delay when the hearing resumed, counsel proposed directions for filing and serving of submissions on the preliminary matters. Directions were made accordingly, and the matter was listed for resumed hearing on 1 March 2022.
The respondent lodged written submissions identifying those parts of Mr Podesta’s statement dated 21 September 2021 (Client’s Response to Witness Statements [1]) to which objection was taken. The respondent submitted that, save for a few paragraphs, the document was a “confection of assertion, opinion and submission”, that it was self-serving, did not properly address the factual issues in dispute, and was in parts highly prejudicial. The respondent submitted that its admission into evidence was contrary to Commission Rule 73(b) and (c) and it should be rejected entirely or save for the few paragraphs.
[1] AALD lodged 26 October 2021.
The applicant did not lodge written submissions in response but Mr Perry made oral submissions at the resumed hearing. He submitted that the document could be admitted and submissions made as to its probative value.
Mr Doak submitted in response that admitting the document subject to weight would only complicate matters, confuse the issues, and take up time on matters that were not factual.
I agreed with the respondent’s submissions that the document was largely assertion, opinion and hearsay. Mr Podesta and his witnesses had already provided statements of evidence from which it was clear there was substantial disagreement with the respondent’s witnesses about a range of factual matters. I was not persuaded the document in dispute would assist me and directed that, save for the parts to which objection was not taken, it should be struck out.
With respect to the application for leave to cross-examine Mr Podesta, no written submissions were made but Mr Doak and Mr Perry made oral submissions at the hearing.
Mr Doak sought leave to cross-examine Mr Podesta about the history he gave his doctors about various activities and his work on his motor vehicle. Mr Doak submitted that
Mr Podesta’s bank records raised questions about that history. He submitted that Mr Podesta had put his credibility in question in his statement evidence and there were issues to be determined about what actually occurred in the workplace. Further, Mr Doak submitted, the evidence went to Mr Podesta’s capacity for employment.
Mr Perry opposed leave to cross-examine and submitted that the respondent could make submissions as to Mr Podesta’s credit based on the available evidence.
I was not persuaded that leave should be given to cross-examine Mr Podesta. The matters on which Mr Doak sought to cross-examine post-dated his employment with the respondent. Key issues for determination concerned matters said to have occurred in the workplace.
Mr Podesta’s credibility had already been put in dispute by the respondent’s witnesses and the respondent could make submissions as to what I should make of his evidence.
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.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)    ARD and attachments;
(b)    Reply and attachments;
(c)    Applications to Admit Late Documents (AALD) lodged on behalf of the applicant on 26 October 2021, 17 November 2021, 9 December 2021 and 22 February 2022, and attachments;
(d)    AALDs lodged on behalf of the respondent on 27 August 2021, 27 October 2021 and 9 December 2021 and attachments, and
(e)    AALD lodged on behalf of the applicant following the hearing on 1 March 2022, and attached bank statements.

Mr Podesta’s evidence

Mr Podesta provided a statement to an investigator on 17 March 2021,[2] a supplementary statement dated 30 June 2021,[3] a further statement dated 16 June 2021[4] and a statement dated 8 December 2022 in response to video surveillance.[5]
[2] ARD page 1.
[3] ARD page 13.
[4] “Response to Dispute Notice” ARD page 23.
[5] AALD lodged 9 December 2021.
In his first statement, Mr Podesta outlines his history of employment with the respondent and his duties. He describes how he was happy to take on additional duties around 2016 to alleviate pressure on the then Workshop Coordinator. In 2016 or 2017, the Workshop Coordinator resigned and Mr Podesta took on additional duties. Around this time, he was promoted to Team Leader. Some months later, the position of Workshop Coordinator was advertised and he applied. He was then told the job was no longer available, and a new position of Fleet Manager/Workshop Coordinator was created and advertised. He says it was clear to him he did not have the necessary experience and he did not apply for the position.
Around mid-2017, Mr Gallahar was appointed Fleet Manager/Workshop Coordinator.
Mr Podesta says it soon became clear that he did not really know what he was doing and needed his help. After a few months, Mr Gallahar began to arrive late and occasionally smelling of alcohol, and his moods were irregular.
In mid-2020, six of the eight members of the workshop team including Mr Podesta submitted a formal grievance about Mr Gallahar. In response, the Council arranged for mediation at which Mr Podesta expressed some of his grievances. Mr Gallahar denied the allegations and Mr Podesta became upset and walked out.
Mr Gallahar resigned about three months later. Mr Podesta says most of the team then gravitated to him for guidance and support, and he took on some purchasing duties.
Around October or November 2020, there was a restructure and a new mechanic team leader was employed. Within about two weeks, an anonymous letter was left on his desk with words to the effect “We sacked the last manager. Look out or you will be next”.
Mr Podesta states that the general manager, Mr Edgar, called an emergency meeting at which he accused the team of being responsible for the letter. Mr Edgar said he was arranging an external investigation. He threatened to “sack the lot of them” if no one owned up and he likened the letter to a murder investigation reported recently on Four Corners. Mr Podesta says he felt intimidated and threatened at the meeting.
Mr Podesta says he has suffered from irregular headaches since the meeting. He did not have any time off or seek medical treatment but he felt apprehensive, upset and depressed about what was happening at work.
An external investigation commenced in the first week of December 2020. Mr Podesta was invited to a meeting at which he was shocked to find that the investigator focused on other issues including buying parts for his personal car through the Council and inappropriate conduct towards a former female employee. He says he was “shocked and unprepared” because he understood the investigation would focus solely on the anonymous letter.
Mr Podesta was on annual leave from 24 December 2020 until 1 February 2021. While off work, he suffered from headaches and felt generally stressed. On returning to work, he was required to attend a second interview with the investigator on 5 February 2021.
Mr Podesta says that, during the second interview, he was questioned about methods for raising purchase orders and about the “legal side of local government procurement”. At the end of the interview, the investigator said he might be subject to further questioning. Mr Podesta was “shocked and upset” that the investigation was focussing on him rather than the anonymous letter and he felt his integrity was being questioned. He was “extremely stressed and upset” after the interview and fearful of getting into trouble at work or potentially losing his job. He left work that day and has not returned since.
Mr Podesta describes his feelings and symptoms since leaving work and the treatment he has sought from his general practitioner, Dr Bajinder Singh, and psychologist, Dr Chi Morris.

Supplementary statement

In his supplementary statement, Mr Podesta describes in more detail how he says things changed after Mr Gallahar started work. He says Mr Gallahar delegated a lot of work to him and he had to take on procurement for which he had no training which was “extremely stressful”. Mr Gallahar was an “extremely difficult person” to deal with and had regular emotional outbursts. He was abusive most of the time and would often arrive at work late and intoxicated or hung over. Mr Podesta says he worked with ongoing stress associated with the excessive workload and his daily dealings with Mr Gallahar.
Mr Podesta refers to Mr Edgar calling the entire team to his office “without warning” where he advised them of the anonymous letter. He says Mr Edgar was “irate and raised his voice demanding to know who prepared the document”. The team suspected it had been written by Mr Gallahar and left on the desk on his behalf by a current employee. Mr Podesta was “shocked” and felt they were being accused of something they had not done.
Subsequently, the investigation commenced and the team was required to provide statements, including about their personal lives. Mr Podesta felt they were presumed guilty of things they did not know about. At no stage were they disciplined or given any formal notification about breach of protocol, rules or law. He felt the real reason for the investigation was being kept from them. He took extended annual leave to see his daughter and returned on 1 February 2021. Within a day or two, he was asked to attend a second interview. After the second interview he could not bring himself to continue and he ceased work that day.
Mr Podesta states that he has subsequently learned from his trade union that there is an accusation of corrupt conduct at the Council. He continues to see Dr Singh and Ms Morris.

Response to dispute notice

In response to the dispute notice[6], Mr Podesta states that he had “no cause or awareness for what is alleged disciplinary action for myself and/or the workshop staff prior to or after commencement of an emergency meeting following the investigations”. He says he fails to understand why enduring prolonged and frustrating work caused by Mr Gallahar over 3½ years, and the events since his departure, are not regarded as the predominant reason for his injury. He has never in 17 years been subjected to disciplinary action.
[6] Section 78 notice issued 30 April 2021, ARD page 23.
Mr Podesta states that the disciplinary investigation started with seeking out who wrote the anonymous letter. The “two sessions” that followed extended to allegations of inappropriate practices and possible breached of the Code of Conduct. He expected the inquiry would be about matters about Mr Gallahar. He reiterates his claim that Mr Gallahar harassed, threatened and intimidated him and others throughout his employment, and says Mr Edgar did the same at the meeting. He says the “so-called disciplinary action”, being the meeting and investigations, was the trigger that he could no longer tolerate.
With reference to particular paragraphs in the dispute notice, Mr Podesta says no one outlined directly to him prior to the investigation what were the allegations against him. Management never discussed anything prior to the investigation about any of the matters that were raised. He refers to “much bigger things” in which he was not involved and says the investigation was, in effect, a pretext for obtaining information about broader matters in the workplace.
Mr Podesta disputes statements in the notice suggesting that his failure to obtain promotion was a factor in any injury.[7] He describes in more detail Mr Gallahar’s behaviour during his time at the workshop and denies that he was himself part of the problem. He denies Mr Gallahar’s allegations about his conduct towards a female employee, having pornographic magazines in the workplace, irregularities with purchasing orders, and use of vehicles.
[7] The respondent no longer relies on his failure to obtain promotion in its section 11A defence.
Mr Podesta refers to ICAC being involved in the Council which he says he cannot understand. It is not clear from the evidence specifically what he means by this or whether ICAC ever became involved with Council matters.

Statement in response to video surveillance

On 8 December 2021, Mr Podesta provided a statement in response to video surveillance of him on one date in June 2021 and five dates in November 2021.[8] Reports dated 18 November 2021 and 26 November 2021 of the surveillance are included in the respondent’s documents.[9]
[8] Applicant’s AALD lodged 9 December 2021.
[9] Respondent’s AALD lodged 9 December 2021.
Mr Podesta state that on the first date, he was helping a friend offload firewood at his own residence. He refers to his hobby of restoring motor vehicles and says on one of the dates he drove to premises that sold auto spare parts. He describes restoring motor vehicles as “one of his great passions” but he now has friends and professional people do a lot of the work for him because of his depression and lack of energy and motivation. On another date he was seen working on his Torana at home. On the last date he was seen walking to a shopping centre where he collected his car; he cannot recall where he drove that day but states that it was likely the home of his mother or sister.
Mr Podesta states that he continues to have feelings of deep depression which have not really changed since February 2021. He continues to see Dr Morris fortnightly and Dr Singh every month. He does not feel he has capacity to work in any conventional workplace.

Statements of Mr Podesta’s witnesses

Statements from Workshop team members, Stephen Howarth, Phillip Turnbull and Austin Vella, are in evidence.
Mr Howarth provided two undated handwritten statements. He states that he has worked with Mr Podesta since 2006. He says morale declined under Mr Gallahar and Mr Podesta bore the brunt of his “bad tempered, bullying and intimidating behaviour”. He refers to the complaint lodged by the team and says they were informed that no action would be taken against Mr Gallahar. He refers to the mediation and Mr Gallahar’s subsequent resignation.
Mr Howarth describes Mr Edgar’s manner at the meeting on 17 November 2020 as “very aggressive and intimidating” and “in an extremely agitated and hostile state”. Mr Edgar said he believed one of the team members present was responsible for the letter, and that person was a coward and should admit responsibility. He was “extremely angry and threatened that he would sack the lot of us” if no one owned up. Members of the team told Mr Edgar that others also had access to the office, a suggestion he “angrily rejected”, saying it was definitely a workshop staff member as they were the only ones with a motive. Mr Howarth says he does not believe the minutes of the meeting are an accurate account of what was actually said. He refers to receiving a letter dated 25 November 2020 about the investigation.
Mr Turnbull provided a statement dated 7 June 2021.[10] He states that he has worked with
[10] ARD page 22.
Mr Podesta for 17 years and found him to be “a fine team member”. He says the workshop used to be “a great place to work” but, once Mr Gallahar started, there was conflict with staff and customers alike. He describes Mr Gallahar’s “very aggressive and angry” behaviour and that the workshop became “a toxic environment”. He says Mr Podesta in particular bore the brunt of his abuse.
Mr Vella provided a statement dated 14 June 2021.[11] He states that he has worked with
[11] ARD page 21.
Mr Podesta for 17 years and describes him as “very well respected”. He states that morale in the workshop before Mr Gallahar arrived was high but his conduct brought morale down “so low” that he has lost his self-esteem and self-confidence in his job.

Mr Gallahar’s statement

Mr Gallahar provided a statement dated 19 March 2021 to the investigator. [12] He denies ever relying on Mr Podesta for support or assistance and says he generally found him to be incompetent at his own job.
[12] Reply page 66; AALD lodged 27 October 2021.
Mr Gallahar states that he was met with “ongoing resistance” from a group including
Mr Podesta, Mr Howarth, Mr Vella, Mr Turnbull and two others who “pushed back” when he tried to give directions. He says Mr Podesta in particular was defiant and undermined him when he tried to implement changes and better work practices.
Mr Gallahar states that, in response to the grievance, he raised concerns about the team members and Mr Podesta in particular. He considered Mr Podesta was a “key instigator”. He expressed concerns about Mr Podesta making sexually inappropriate comments about female staff members and he had pornographic magazines in the workshop. Purchasing orders were made for equipment that was not needed in the workshop and he believed
Mr Podesta was manipulating the process. On one occasion he became aware that a vehicle being driven by Mr Podesta was a Council vehicle that he was not entitled to in his position.
Mr Gallahar refers to the mediation session during which he felt the team members “ganged up and targeted” him. He says Mr Podesta yelled at him at one point and referred to him as a narcissist. He decided to resign on account of the ongoing difficulties with those team members and how he was treated during the mediation.

Mr Edgar’s statement

Mr Edgar provided a statement dated 31 March 2021 to the investigator.[13] He refers to learning that an anonymous, threatening letter had been left on the desk of new mechanic team leader, Anthony Zanetec. Mr Edgar states that Mr Zanetec had recently resigned and he understood the main reason was difficulties working with some of the team including Mr Podesta. The difficulties included resistance to change, concerns about some work practices, and lack of respect by some workshop staff.
[13] Reply page 66.
Mr Edgar states that, on learning of the letter, he immediately met with group manager, Mark Colburt, manager civil works Sarah Barwick, and HR manager Michelle Coleman. They were all “deeply troubled” by the letter and decided to call a meeting of the team immediately.
Mr Colburt and a union representative attended.
Mr Edgar states that he outlined at the meeting why it had been called and he expressed his disappointment and upset. He outlined his view that the letter originated from within the workshop. He told the team this behaviour was cowardly and it was best for anyone responsible, or who knew who was responsible, to come forward. He impressed that the matter needed to be investigated because of its seriousness.
Mr Edgar says no one in the meeting offered any information about the letter. Given its nature, circumstances and wording, he considered it reasonable to believe someone from the workshop was responsible.
Mr Edgar states that he was aware of allegations by the team against Mr Gallahar and counter-allegations by Mr Gallahar. He was aware that Mr Gallahar had difficulty with some team members including Mr Podesta. He denies saying words to the effect that if no one owned up he would sack the lot of them. He denies any suggestion that he threatened anyone’s employment. He says he was “upset and stern” but he went to lengths to be apologetic to the group as he felt not everyone in the room was responsible. He spoke “in a professional manner” but was stern because he needed to ensure they understood the seriousness of threatening another employee. He said the person responsible would be letting the rest of the group down by not coming forward. He denies making any inappropriate comments or singling anyone out.
At one point, Mr Edgar says, he asked if any of them had seen a Four Corners documentary the previous night about the 1990s Claremont murders in which the murderer had now been identified, some 20 years later. He says he did so to illustrate the point that a person was able to circulate within his own community without anyone suspecting what he was capable of.
Mr Edgar states that, towards the end of the meeting, he and the managers stepped out for a few minutes to allow the team to deliberate. When they returned, the staff all said no one from the team was responsible and they were shocked at the letter. Mr Podesta, Charlie Portelli and Mr Howarth were the most vocal during the meeting.
Mr Edgar states that, when no one claimed responsibility, he authorised the engagement of an external investigator “to conduct an investigation into a number of issues relating to the workshop, including the letter”. He says a range of “cultural, behavioural and operational matters” had emerged over the previous 6 to 12 months which, if proven, would be a substantial breach of the Council’s Code of Conduct and could warrant referral to other agencies. He says it was apparent that external help was needed to investigate the matters including the letter.
Two days after the meeting, Mr Edgar says, some staff from the workshop downed tools and held an unauthorised meeting. He telephoned Mr Podesta as the most senior team member on site at the time. Mr Podesta said he did not convene the meeting; he had participated but left before it ended without suggesting that staff return to work. Mr Edgar expressed his disappointment and the phone call ended “cordially”.
A short time later, Mr Podesta asked to meet with him. Mr Colburt was present. Mr Podesta apologised for not stopping the meeting and said he wanted to be a better leader. He said he had nothing to do with the letter and he did not think it had come from the workshop.
Mr Edgar reiterated that he needed to get to the bottom of it. Mr Podesta was “cooperative, understanding and agreed the letter was unacceptable”. They had a “very optimistic discussion” about Mr Edgar’s visions for the workshop and Mr Podesta left in a positive mood. That was their last interaction.
Mr Edgar states that, when engaging the external investigator in December 2020, Council “took this opportunity to also look into the other concerns and issues raised about the Workshop”. Mr Podesta and other team members received a formal letter notifying them of the investigation and inviting them to an interview.
Mr Edgar states that the investigator “was able to substantiate some items” against
Mr Podesta but unable to make conclusions on some other matters as he did not have access to certain documents held by the Council. As a result, in March 2021, Council sent a further letter to Mr Podesta requesting further responses. As at the date of Mr Egdar’s statement, Council had not received a response.
Mr Edgar states that, as part of the external investigation, a number of serious concerns about Mr Podesta had come to light including issues with his leadership style, his lack of contribution towards changing and improving the culture, failure to take reasonable directions from his managers, lack of cooperation with new employees, authorising private errands on business time, and concerns around purchasing processes. Those matters had been put to Mr Podesta but he had not so far responded and he remained on leave.

Mr Colburt’s statement

Mr Colburt states that he has been employed by the respondent for 23 years.[14] In 2018, he commenced a review of a number of business units including the workshop, as part of which he conducted audits and looked into purchasing practices and processes. He relied heavily on Mr Gallahar to assist him driving changes. He encountered resistance from Mr Podesta, Mr Portelli, Mr Vella, Mr Howarth, and Mr Turnbull, and he understood that Mr Gallahar also had ongoing difficulties with them.
[14] ARD page 42.
Mr Colburt states that, after the grievance lodged against him, Mr Gallahar told him that some of his behaviour was a result of the frustration and difficulties with that group. He made “some counter allegations” against Mr Podesta. Because of the complaint and the counter-allegations, Council decided to engage an external mediator. Shortly after the mediation session, Mr Gallahar resigned.
Mr Colburt states that, on 23 September 2020, while Mr Gallahar was on leave, he attended a meeting of the workshop team at which he told them Mr Gallahar had made a number of counter-allegations and raised concerns about the workshop. He advised the group that he would be looking into those matters, and that Mr Gallahar’s resignation did not mean they would not be looked into or addressed.
Mr Colburt describes learning of the anonymous letter, and the meeting on 17 November 2020. He denies that Mr Edgar spoke in an aggressive or inappropriate manner. He says
Mr Edgar’s voice “was slightly elevated at times and he spoke in a firm tone” and it was clear he was addressing a serious issue with the team; he asked for information about who may have been responsible and suggested it was most likely someone from within the team.
Mr Colburt describes this assertion as reasonable given the nature and contents of the letter.
Mr Colburt says that, on about three occasions during the meeting, Mr Edgar said the person responsible did not have to come forward then but could approach him in private afterwards. He never said words to the effect that he would “sack the lot of them” and no one’s employment was threatened at any point. Mr Edgar commented that it would be better for the person to own up rather than be identified at a later stage through an investigation. Mr Edgar acknowledged that not everyone in the group was involved and he apologised to those who were not.
Mr Colburt says Mr Podesta suggested the letter could have been left by a former employee which he understood to mean Mr Gallahar, a suggestion Mr Colburt states he found “far-fetched and without any real substance”.
Mr Colburt describes the meeting between himself, Mr Edgar and Mr Podesta a couple of days later in similar terms to Mr Edgar.
Mr Colburt says that, leading up to the meeting on 17 November 2020, he became aware of a number of concerns relating to purchasing in the workshop, in particular that items were being ordered for which there was no use.
Mr Colburt refers to the letter dated 25 November 2020 to Mr Podesta in connection with the investigation and request to attend an interview. He disputes Mr Podesta’s suggestion that the investigation was only about the anonymous letter and says it refers to “various alleged inappropriate practices” including the anonymous letter. He says at no point was Mr Podesta informed that the investigation was going to be only about the anonymous letter and at no point did Mr Podesta raise that concern with him.
Mr Colburt says he understands that Mr Podesta was questioned at the interview about purchasing practices within the workshop and his purchase of a set of brake pads.
Mr Podesta did not provide “sufficient responses” as the investigator did not have a copy of the purchase order to show him. For this reason, this item was included in a letter to
Mr Podesta on 12 March 2021 requesting further responses and information about his purchases. Shortly after the second interview, Mr Podesta offered to resign on certain terms. At the time of his statement, Mr Colburt said, no agreement had been made.

Ms Coleman’s statement

Ms Coleman states that she has been employed by the respondent for 14 years and has been manager of Human Resources and Wellbeing for the past nine. Her dealings with
[15] Reply page 54.
Mr Podesta have been predominantly in that capacity.[15]
Ms Coleman states that she is aware of the complaint against Mr Gallahar and his counter-allegations against members of the workshop team including Mr Podesta following which Council decided to engage an external consultant to conduct a workshop.[16] Towards the end of the workshop, Mr Podesta “had an outburst” and yelled out “inappropriate comments” at Mr Gallahar and called him “a narcissist”. Mr Podesta was then asked to leave the room.
(Mr Podesta disputes her account and says he left of his own accord “in disgust” at what
[16] I understand this refers to the mediation session.
[17] ARD page 37.
Mr Gallahar was saying and he did not want to embarrass himself with the emotions he felt; Ms Coleman followed him out because she knew he was emotionally affected and he returned about 20 minutes later. Mr Podesta acknowledges calling Mr Gallahar “a narcissist”.[17])
Ms Coleman states that she understands that Mr Gallahar cited difficulties with some team members including Mr Podesta as the reason for his resignation.
Ms Coleman refers to the meeting on 17 November 2020. She says Mr Edgar addressed the group “in a professional and appropriate manner”. He did not act in an inappropriate or aggressive manner. He was “firm in his approach at times”. He did not raise his voice at any point in the meeting. His voice “may have been louder than normal to accentuate his disappointment and the seriousness of the matter” but it was not directed at anyone in particular. He did not threaten to “sack the lot” if no one owned up, and no one’s employment was threatened. He did say words to the effect that, if things did not change, they would be out of work because there would be no workshop but this comment was not made in any sort of threatening or aggressive manner. He said the person responsible could see him in private if they did not wish to come forward during the meeting. When no one came forward, he advised that an external investigator would be appointed.
Ms Coleman refers to the letter issued to team members advising that a number of issues would be addressed in an external investigation including the anonymous letter. At no point, she states, was Mr Podesta told or led to believe that the investigation would focus only on the anonymous letter; the letter clearly stated that “a number of items would be looked into” this part of the investigation.
Ms Coleman states that she had no further involvement until she was asked to draft the letter that was issued to Mr Podesta on 12 March 2021.

Ms Bogaz’s statement

Ms Bogaz states that she and Mr Podesta report to the same manager. She refers to the meeting on 17 November 2020 which she was asked to attend as union delegate. She states that Mr Podesta, Mr Howlett and Mr Portelli were “vocal” during the meeting and said they did not believe anyone from the workshop was responsible. She recalls Mr Edgar saying he believed it was likely that someone from the workshop was responsible. He did not say words to the effect that he would sack the lot of them and he made no threats to anyone’s employment.
Ms Bogaz states that Mr Edgar “spoke with some elevation in his voice” and it was clear he was concerned about the anonymous letter. She could sense that he was “frustrated” about it. He was not aggressive or inappropriate. His conduct was “professional”. When no one claimed responsibility for the letter, Mr Edgar said an investigation would be launched.
Ms Bogaz states that, on his last day at work, Mr Podesta came to her office and said he felt sick and needed to go home. He did not report any other issues or concerns.

Ms Barwick’s statement

Ms Barwick states that she has been employed by the respondent for 20 years. She was involved in the restructure of the workshop in 2018.
Ms Barwick refers to the complaint against Mr Gallahar and his counter-allegations. She says Mr Gallahar admitted to some of the allegations against him and explained he had become “extremely frustrated with inappropriate behaviour and resistance” from a group of team members including Mr Podesta. He said he felt bullied by a group including Mr Podesta. She states that, when he resigned, Mr Gallahar told her that Mr Podesta was “a significant source” of his frustration and he felt Mr Podesta was “a ring leader” of the group.
Ms Barwick states that she was not present at the meeting on 17 November 2020. She handed letters to the team, including Mr Podesta, notifying them of the external investigation and inviting them to an interview. She received the same letter herself.
Ms Barwick says Mr Zanetec had since resigned, citing difficulties working with the team including Mr Podesta. In December 2020, a female team member reported to her that she was treated “poorly” by Mr Podesta when she returned to work after being off sick.

Other documents

Invitation to mediation

On 20 August 2020, Mr Colburt wrote to Mr Podesta (and others).[18] The letter is headed “Workplace Behaviour Expectations”. It states:
“As you are aware a fact finding investigation was recently carried out to assess relevant information with regards to allegations you made of inappropriate workplace behaviour by your coordinator Matthew Gallahar. The purpose of these inquiries was to provide information that would assist the General Manager to determine if further investigation would be required.
The General Manager has now considered the information and has decided that in the first instance, he would like the … Team to undertake a team session to develop a shared set of workplace behaviour expectations.
The reason for this initial action is that on reviewing the facts, the General Manager became aware of allegations of inappropriate behaviour that may extend across several team members. In light of this, he would like to ensure a fair and reasonable opportunity for the team to establish a way forward by establishing, and agreeing on, the behaviours that are acceptable in the workplace.”
[18] ARD page 46.
The letter advised that team members were expected to “participate and provide meaningful input” at the session and the “agreed workplace behaviour expectations produced to be used to guide and monitor improvement to team interactions”.

Invitation to interview with the investigator

By letter dated 25 November 2020 to Mr Podesta (and others) [19], Mr Colburt advised that the General Manager had decided:
“… to conduct a workplace investigation into various alleged inappropriate practices that may constitute breaches of Council’s Code of Conduct and policies and procedures. This includes a recent incident involving a threating [sic] note left on an employee’s desk on Tuesday, 17 November 2020.”
[19] ARD page 47.
The letter advised that Mr Podesta had been identified as a person “who may be able to provide relevant facts or information that will assist in the investigation of this matter” and requested him to attend a meeting on 4 December 2020. It advised that he was entitled to bring a support person or union representative and the interview would be recorded; an alternative time or location could be arranged if Mr Podesta could not attend.

Council letter to Mr Podesta 12 March 2021

By letter dated 12 March 2021[20], Mr Edgar advised Mr Podesta that the investigator had provided a report and transcript of interview which revealed “an alleged pattern of dishonest and divisive behaviour that may pose a risk to Council’s reputation, the operations of the Workshop and the Workplace Health and Safety of other employees”. Mr Edgar offered
[20] AALD lodged 27 August 2021, page 25.
Mr Podesta “further opportunity to respond to several allegations put to [him] by the investigator”.
The letter lists allegations that Mr Podesta had directed staff on more than one occasion to undertake personal errands during work time; had accepted and participated in the practice of taking excessive time during allocated breaks; had made inappropriate comments about female employees to other workshop employees; had resisted appropriate and reasonable directions to implement changes; and may have been dishonest in purchasing practices by circumventing Council’s internal purchasing controls.
Mr Edgar refers to the anonymous letter and says the allegation that Mr Podesta had been involved had not been substantiated but the investigator believed Mr Podesta knew the identity of the person who created the letter. The investigator also considered that allegations that Mr Podesta was involved in resistance to change and “a general area of toxicity” in the workplace were sustained. Mr Edgar requested Mr Podesta’s response.

Mr Podesta’s financial statements

Statements of Mr Podesta’s AMP and Westpac accounts from approximately 1 July 2020 to 31 December 2021 are in evidence.[21] They show a number of transactions referred to by
[21] AALDs lodged 17 November 2021, 9 December 2021 and 2 March 2022.
Mr Doak in his submissions.
The statements also show a number of payments of “Wages/salary” after Mr Podesta left work on 5 February 2021. The respondent accepts that these are related to his employment with the Council, including various forms of leave, and do not represent income from any other employment.

MEDICAL EVIDENCE

Dr Singh’s records, report and certificates of capacity

Dr Singh’s clinical records from 24 May 2018 to 1 April 2021 are in evidence.[22]
[22] ARD page 106.
On 11 April 2019, Dr Singh recorded that Mr Podesta’s father had passed away recently, he was emotional and stressed but coping relatively well.[23] There are references to headaches, suspected to be migraines, throughout 2019 but no relevant reference to employment.
[23] ARD page 108.
Dr Singh’s notes on 20 January 2021, show the reason for the visit as “left chest pain, palpitations, anxiety”. He noted:
“Has been going through a lot of stress at work and some at home lately
On his holidays
But feeling anxious for a while”[24]
[24] ARD page 118.
On 22 January 2021, Dr Singh noted “recent chest pain” but no reference to employment. On 7 February 2021 he noted:
“Significant stress at work
Some investigations underway at work
Michael reports there has been significant issues at work involving multiple workers being harassed/bullied
Feeling stressed and finding himself unable to go back to work
Needs time off to cope”[25]
[25] ARD page 120.
On 16 February 2021, Dr Singh noted that Mr Podesta was “feeling very anxious and low as well”; he did not feel like leaving the house, was unable to sleep well and having tension headaches; he had thoughts of being worthless but no suicidal thoughts. He reported that all his symptoms were related to work stress and there were “multiple people at his work in similar situation and they all feel being victimised”. He did not feel well enough to go back to work and needed a medical certificate.[26]
[26] ARD page 121.
Dr Singh recorded similar notes at Mr Podesta’s next consultation on 18 February 2021 and noted that he had stopped playing music in pursuing other hobbies. Mr Podesta attributed his symptoms to work related stress and issues and wanted to make a workers compensation claim Dr Singh referred him to a psychologist.[27]
[27] ARD page 121.
On 25 February 2021, Dr Singh noted that Mr Podesta told him there were “some issues with the manager about 2 years ago and he had to leave in September 2020”. Mr Podesta described the attempt at mediation and the investigation into the letter. He said they had recently been allegations against him about incorrect purchasing and, if there were any errors, it was due to not getting proper training.
On 4 March 2021, Dr Singh noted that Mr Podesta was sleeping slightly better but still had anxiety and did not feel like going out or meeting anyone, and still did not feel like pursuing any interests or things he usually enjoys doing.[28] There are further references throughout March to the ongoing investigation.
[28] ARD page 124.
Dr Singh responded on 23 February 2021 to a questionnaire from the insurer.[29] He confirmed his diagnosis of major depressive disorder in accordance with DSM-V criteria. As to whether Mr Podesta’s psychological condition was wholly or predominantly caused by actions of his employer in relation to discipline, Dr Singh said he would advise assessment by psychologist to determine this. However, he understood from Mr Podesta’s perspective that it was predominantly work-related. He was not aware of Mr Podesta suffering from any previous psychological condition or symptoms.
[29] ARD page 127.
Dr Singh reported to Mr Podesta’s solicitors on 1 July 2021.[30] He referred to his clinical records. He said Mr Podesta’s depression and anxiety symptoms had improved somewhat with higher medication and continuous psychological interventions. His mental health remained significantly affected by the work-related issues and he was unable to return to work at that point. It appeared that many parts of the process, such as answering investigative questionnaires and talking to investigators had worsened his anxiety and depressive symptoms quite severely.
[30] ARD page 80.
Dr Singh diagnosed major depression with anxiety and said Mr Podesta’s employment was a substantial contributing factor to his current mental health condition. He was not fit to engage in any employment at that time.
Dr Singh provided Certificates of Capacity certifying that Mr Podesta had no capacity for employment from 2 September 2021 to 28 October 2021.[31] Further certificates cover the period to 25 November 2021.[32]
[31] AALD lodged 26 October 2021, page 1.
[32] AALD lodged 17 November 2021, page 1.

Dr Chow’s reports

Psychiatrist, Dr Frank Chow, saw Mr Podesta by telehealth on 5 May 2021 and reported to his solicitors on 12 May 2021.[33]
[33] ARD page 74.
Dr Chow took a history from Mr Podesta broadly consistent with his statement of evidence. Mr Podesta told him that, in December and January, he had been to his doctor due to palpitations related to work stress. He did not accept the allegations against him. He had been accused of bullying and creating “toxicity” in the workplace but the former coordinator was the main problem. He had been seeing a psychologist every two weeks.
Mr Podesta told Dr Chow he had lost interest in his activities and stayed home most days. He was not engaging in his hobbies. He had started seeing friends again.
Dr Chow diagnosed an adjustment disorder to which Mr Podesta’s employment was a substantial contributing factor and said he remained totally unfit for work.
Dr Chow provided a supplementary report on 7 September 2021.[34] He confirmed his view that Mr Podesta’s employment was a substantial contributing factor to his injury. He outlined briefly the difficulties Mr Podesta said he had over a number of years due to Mr Gallahar’s behaviour, and he referred to the anonymous letter. Mr Podesta told him there was an ICAC investigation into Mr Gallahar’s “wrongdoings and negligence, and this was “management way of covering things up and pulling him out of his job”. Dr Chow concluded that he was “therefore of the opinion” that Mr Podesta’s psychiatric injury was substantially caused by the bullying difficulties from management that he faced at work.
[34] AALD lodged 26 October 2021, page 29.

Dr Morris’s report

Dr Chi Morris, psychologist, provided a report dated 19 April 2021[35] certifying that Mr Podesta was receiving treatment for “anxiety and depression and various personal life stressors”. He reported feeling “worried, intense stress and depressed” about allegations and investigations at work concerning him and the “enormous pressure” it had put on him.
[35] Reply page 194.
Dr Morris reported that, based on psychometric testing, she diagnosed Mr Podesta with major depressive disorder secondary to work-related stress. His psychological distress was currently within a severe range, with some symptoms showing a slight improvement.
Mr Podesta reported that he was keen to return to work but his capacity was yet to be ascertained as his symptoms had not stabilised. With adequate psychological therapy and support from his employer, his prognosis could be good. Dr Morris recommended further psychological sessions and said a return to pre-injury duties might take anywhere from three to six months.

Dr Kaplan’s reports

Psychiatrist, Dr Robert Kaplan, saw Mr Podesta for assessment by telehealth on 1 April 2021 at the request of the respondent. He provided a report of the same date.[36]
[36] Reply page 186.
Dr Kaplan took a history from Mr Podesta of problems from the time of Mr Gallahar’s appointment, and the formal complaint by the team in August 2020. He noted that
Mr Gallahar responded with allegations of improper conduct including by Mr Podesta. He noted that Mr Podesta found Mr Edgar’s attitude at the meeting on 17 November 2020 “accusatory and offensive considering it was a minor matter”. He noted the initial interview, that Mr Podesta went on leave and attended second interview following which he left work. He noted that, on 12 February 2021, Mr Podesta received a letter raising concerns about his performance and that Mr Podesta felt he was unfairly accused.
Dr Kaplan reported that Mr Podesta said he was worrying about work and feeling sick when he took annual leave, he had a heart scare that was attributed to stress, and he took antidepressants to cope with the situation. He said his condition “slumped” after the meeting about the anonymous letter. When he returned to work, he was concerned he could be terminated which would threaten his ability to pay his mortgage and child support. When he left work, he was “over strong, stressed, anxious, angry and edgy”.
Dr Kaplan reported that Mr Podesta said he lacks motivation since leaving work, he “seldom plays his guitar and does not work on cars”. His activities include gardening, buying Facebook items and so on, playing with the dog and walking on the river. His concentration and memory was not good. He had made some improvement on medication and with counselling but he remained “introspective” and “ruminating about the issue”.
Dr Kaplan reported that Mr Podesta was obsessed with the problems that occurred at work but it was not possible to determine exaggeration, malignancy, inconsistency or unreliability. Dr Kaplan considered the most appropriate diagnosis was Adjustment Disorder with anxiety and depression and said obsessional personality traits could not be excluded. The workplace factors were the main contributing factor to his condition; there was no aggravation of a pre-existing disorder.
Dr Kaplan said:
“On the information provided, it was not possible to find that Mr Podesta’s condition was wholly or predominantly caused by the disciplinary action (external investigation) by the council; according to Mr Podesta the problem started with [Mr Gallahar’s] abuse and a hostile attitude, the meeting over the anonymous letter and all the issues that came up after that.”
Dr Kaplan considered that, in his current state, Mr Podesta was unfit to work in any capacity.

Supplementary report

On 25 August 2021, Dr Kaplan provided a supplementary report to the insurer in response to a number of questions and assumptions. He said, in short, that the weight of the evidence indicated there was “bad behaviour” from both Mr Gallahar and Mr Podesta; and there was no note in the general practitioner’s records of work issues from May 2018 till 20 January 2021 which, significantly, included the period from 17 November 2020.
Dr Kaplan reported that, on the assumptions put to him, Mr Podesta’s adjustment injury was “predominantly caused by actions taken or proposed to be taken by Council with respect to ‘discipline’, specifically the workplace investigation that was commenced … in November 2020 and which continued up until the second interview”.
Based on the history recorded in an earning capacity assessment on 24 May 2021 as described to him, Dr Kaplan said it indicated “a greater range of household and recreational activities” when he examined Mr Podesta and they showed that he was not incapacitated for work and there would be no restrictions to doing this.

Further supplementary report

In a supplementary report dated 20 September 2021,[37] Dr Kaplan said Mr Podesta reported no progress since he saw him in April. The culminating event with his termination on 2 August [2021]. He had done nothing wrong and was convinced there was a “something deeper” and a conspiracy to terminate him. His mood has slumped since then and he had financial difficulties. He had lost confidence and struggled with motivation. He did not have the "headspace" to be able to contemplate working. He tried to go for a daily walk but lacked motivation and often let this go by. He played the guitar less often, listened to the radio, watched football and Netflix movies.
[37] AALD lodged 17 November 2021.
Dr Kaplan found no signs of “exaggeration, malingering, inconsistency or reliability [sic]”. He considered “on the balance of probabilities”, Mr Podesta was not fit to work at present. He “may well have had the capacity to work after May” but his mood and mental state had slumped since he was terminated and he was currently incapacitated for work.

Third supplementary report

Dr Kaplan provided a further report on 1 December 2021[38] after the respondent provided him with copies of Procare investigation reports dated 18 November 2021 and 26 November 2021, and related video footage and photographs.
[38] AALD lodged 1 December 2021
Dr Kaplan noted that the surveillance material showed Mr Podesta leaving home regularly, going to shopping centres, supermarkets and auto spares shops, having coffee and eating. Comparing these activities to his account of spending time at home in a depressed state,
Dr Kaplan concluded that Mr Podesta was able to work without restrictions.

THE APPLICANT’S SUBMISSIONS

Mr Perry refers to the dispute notices conceding that Mr Podesta has sustained a significant psychological injury as a result of his employment, and submits that the issue is whether the respondent has discharged its onus to establish that the whole or predominant cause of the injury was reasonable action with respect to discipline. Mr Perry refers to Department of Education and Training vSinclair[39] and Northern NSW Local Health Network v Heggie[40].
[39] [2005] NSWCA 465 (Sinclair).
[40] [2013] NSWCA 255 (Heggie).
Mr Perry refers to Dr Kaplan’s comment that he could not exclude obsessional personality traits from his diagnosis. Mr Perry submits that, if Mr Podesta was more vulnerable by reason of a personality disorder, that does not affect my determination. Dr Kaplan found that his employment was the main contributing factor to his injury, and no other competing factors have been identified.
Mr Perry submits that Mr Podesta gives a clear account of events at work from 2016 when he took on additional duties, and the stressful conditions and “toxic” environment after
Mr Gallahar was appointed in 2017. Mr Podesta’s witnesses support his account and the respondent does not dispute that conditions at work were extremely stressful.
In Mr Perry’s submission, the fact that Mr Podesta did not see complain to Dr Singh about events at work until 20 January 2021 is not inconsistent with his claim. He told Dr Singh there had been a lot of stress at work and he had been anxious “for a while”.
Mr Perry refers to Attorney General v K[41] and Fritzel v Chemler[42] and submits that
[41] [2010] NSWWCCPD 76 (AG v K).
[42] [2007] NSWCA 249 (Chemler).
Mr Podesta had a genuine perception of being bullied from 2016. His colleagues support his statement that it was especially stressful for him because Mr Gallahar considered him to be the “ring leader”. In contrast, Mr Perry submits, Mr Podesta had been employed by the respondent for 17 years during which he had been promoted, suggesting he was a valued employee.
Mr Perry submits that the mediation did not constitute action in respect of discipline for the purposes of section 11A. Mr Podesta acknowledges he became upset during it because he did not want to hear Mr Gallahar lie. There is controversy about whether he walked out or was asked to leave and he probably should not have spoken as he did but, in any event, it was psychologically stressful for him. It was also stressful to be given duties for which he was not trained and for which he acknowledges he was out of his depth.
Mr Perry submits that Mr Gallahar’s assertion that he was met with resistance from
Mr Podesta and others underlines the continuing conflict and stress in the workplace, regardless of who was to blame. By the time of the meeting in November 2020, the workplace had been stressful for four years and was a significant contributor to Mr Podesta’s psychological injury.
With respect to the meeting on 17 November 2020, Mr Perry agrees that Mr Edgar was entitled to make inquiries as to who wrote the letter, but submits that the meeting was not action taken, or proposed to be taken with respect to discipline; it was an inquiry which may or may not have led to further action. If it was action with respect to discipline, it was not reasonable for Mr Edgar to conduct the meeting as he did.
Mr Perry submits that Mr Podesta’s witnesses indicate they were all shocked at Mr Edgar’s conduct of the meeting. Although the respondent’s witnesses deny that he spoke in an aggressive manner, Ms Bogaz said he spoke “with some elevation” and she could sense that he was frustrated about the letter. Ms Coleman said his voice “may have been louder than usual”. Mr Colburt says his voice was “was slightly elevated at times”. All said it was clear he was addressing a serious issue.
Mr Perry submits that it was clear that Mr Edgar was very angry at the meeting and I can conclude that he “yelled” at them as Mr Podesta and his witnesses say, and that he did threaten their employment.
Mr Perry submits that the meeting was called without warning; if it was action in respect of discipline, Mr Edgar should have given the staff notice. At no stage was anyone given formal notification. To the extent that any disciplinary matters contributed to the mix of causal factors, I would conclude they fell short of reasonable. Mr Perry relies on Jefferey v Lintipal[43] and Irwin v Director General of School Education;[44] also Shore v Tumbarumba Shire Council.[45]
[43] [2008] NSWCA 138.
[44] Compensation Court of NSW, Geraghty CCJ, 18 June 1998, No 14068 of 1997, unreported (Irwin).
[45] [2013] NSWCCPD 1 at [63]-[69].

Capacity

With respect to Mr Podesta’s capacity for employment, Mr Perry refers to Dr Kaplan’s reports and his comment in his report of 20 September 2021 that Mr Podesta did not have the “headspace” to contemplate work. Mr Perry submits that was the “space” Mr Podesta was in; he could go out and do things like work on his car but not consistently. On the balance of probabilities, Dr Kaplan considered he was not fit to work in September 2021. He found no signs of exaggeration, malingering or the like.
Mr Perry submits Dr Chow and Dr Singh support Dr Kaplan’s opinion as to Mr Podesta’s capacity. He submits that Dr Singh has been his general practitioner for years; he is in a particularly strong position to assess Mr Podesta and his Certificates of Capacity should be given considerable weight. There is no evidence that Mr Podesta has engaged in any employment since 5 February 2021 and the evidence supports the conclusion that he has had no capacity since that date because of his psychological injury.

THE RESPONDENT’S SUBMISSIONS

Mr Doak submits there is no dispute that Mr Podesta has a psychological injury. Mr Podesta refers to stressful matters in the workplace between 2016 and late 2020, and there was undoubtedly interpersonal conflict, but the issue is whether those events were causative of any injury.
Mr Doak submits that the evidence suggests that Mr Podesta did not have much issue with the meeting on 17 November 2020 until he became aware around 25 November 2020 of the investigation. He casts himself as a victim of a conspiracy to get rid of him and others but it is improbable that the respondent would have wanted to get rid of a whole workforce.
Mr Doak refers to Dr Kaplan’s first report in which he records that Mr Podesta described the letter as “a minor matter”. Mr Doak submits that this comment is indicative of Mr Podesta’s attitude. Moreover, Mr Podesta made his own displeasure known when he saw fit as he did at the mediation when he abused Mr Gallahar.
Mr Doak submits that the workplace may have been stressful but there is no evidence of any adverse psychological effects on Mr Podesta until he saw Dr Singh in January 2021. He told Dr Singh he had been “anxious for a while” but it is not clear for how long. There is no evidence of a complaint to Dr Singh from 2016 to November 2020 when Mr Podesta says he was under significant stress on account of Mr Gallahar. There is no evidence that he took time off work in that period for work-related stress. He told Ms Morris that he was worried about allegations at work but he did not say he was overworked. He was entirely focused on the investigation.
Mr Doak’s submission, Mr Podesta gave an account to Dr Kaplan, Dr Chow and Ms Morris of his activities that is not born out by the evidence. Mr Doak refers to Australian Securities & Investments Commission v Rich[46]; Paric v John Holland (Constructions) Pty Ltd[47]; and Krstevska v Fast & Fluid Management Australia Pty Ltd[48] and submits that an opinion must be given in a “fair climate” with sufficient correspondence to the facts for the opinions to be accepted.
[46] [2005] NSWCA 152.
[47] [1985] HCA 58; 59 ALJR 844.
[48] [2012] NSWWCCPD 69.
Mr Doak refers to the history taken by Dr Kaplan that Mr Podesta lacked motivation and did not work on his cars and that he presented as depressed, unmotivated and not wanting to meet anyone; he told Dr Singh he was feeling low and did not feel like leaving the house, and he had stopped his hobbies and interests.
In contrast, Mr Doak submits, Mr Podesta’s bank records show a different picture. Mr Doak cites entries for a number of dates throughout January, March and April 2021 showing
Mr Podesta using his credit cards in various locations on the mid north coast, central coast and inland for purchases including for auto-parts, at Bunnings and cafes. Mr Doak submits that I can take judicial notice of these locations. He submits that the records make clear that Mr Podesta was not staying at home; he was going to restaurants, cafes, hotels and shopping centres, and pursuing his hobbies before and after he saw Dr Kaplan and
Dr Singh.
Mr Doak submits that Mr Podesta’s bank records put his credibility in question and he has offered no explanation for them. I would have grave doubts that he was having the psychological problems that he claimed.
With respect to the section 11A defence, Mr Doak submits the respondent relies on action taken, or proposed to be taken, in respect of discipline. He submits that the anonymous letter was a threat to Mr Zanetec’s employment and was a very serious matter. Mr Edgar consulted the HR manager and called a meeting on HR advice. His response was considered and reasonable. There is no doubt that he spoke firmly at the meeting but I would prefer the evidence of the respondent’s witnesses. Even if Mr Podesta’s account is accepted, there is no evidence of any psychological effect on him: he did not see his doctor, he had no time off. There is no evidence that he was distressed by the conversation with Mr Edgar two days later about the unauthorised meeting.
Mr Doak submits that, even if Mr Podesta’s perception of real events is as he claimed, the real question is whether the meeting had any adverse effect. He continued to work until 24 December 2021 after being notified of the investigation earlier that month, and he attended a second interview when he returned to work. Mr Doak submits that, had he been fearful of termination as he claims, he could be expected to have seen his doctor sooner, to go off work or to claim compensation, none of which he did at the time. Mr Doak submits it is clear that Mr Podesta’s focus was on the investigation and not all events before then.
With respect to Dr Chow’s opinion, Mr Doak submits it offends Hancockv East Coast Timber Products Pty Ltd[49]. Dr Chow gives no reasoning and does not show how he arrived at his conclusion. He does not explain why he initially said Mr Podesta’s symptoms were about the rest of investigation and then said it was caused by bullying.
[49] [2011] NSWCA 11.
Mr Doak submits that, if I find that the disciplinary action started at the November 2020 meeting, I would find it was reasonable according to Commissioner of Police vMinehan[50], AG v K and Irwin. With reference to Irwin, Mr Doak refers to the employer’s objectives to protect employees and ensure proper use of ratepayers money.
[50] [2003] NSWCA 239.
Mr Doak submits that Mr Podesta clearly had problems with the matters that were put to him at the interviews with the investigator but neither was improper. He was asked about purchasing, how he spoke to a female employee and so on. He was invited to a meeting, given the option of having a support person, he had the opportunity to respond and he did so. The disciplinary process, starting from the meeting and continuing, was reasonable and was the predominant, if not the whole, cause of his injury.
With respect to Mr Podesta’s capacity, Mr Doak says he does not cavil with the claim up to May 2021, based on Dr Kaplan’s report. However, in December 2021, having considered the surveillance material, Dr Kaplan considered that Mr Podesta had capacity for employment without restriction. Mr Doak submits that only Dr Kaplan has seen that material which is supported by the bank records indicating Mr Podesta moved around a range of locations at some distance from each other engaging in a range of activities. Mr Doak submits that
Mr Podesta has not explained those records and I can place weight on Dr Kaplan’s opinion.

SUBMISSIONS IN REPLY

In reply, Mr Perry submits that the respondent disregards the large volume of material about events in the workshop from 2016 to late 2020; the fact that Mr Podesta did not complain to his doctor and had no time off is not to the point. Mr Perry submits it is not unusual for a worker to put up with things until they become too much. Things were bad enough that six employees felt the need to lodge a formal grievance against Mr Gallahar.
Mr Perry submits there is no dispute that, by the time he saw Dr Singh, Mr Podesta was psychologically injured. Dr Singh recorded that he had issues with his manager “two years ago”. The respondent cannot say that disciplinary action was the whole or predominant cause of his injury in light of the significant contribution of the toxic work environment.
Mr Perry submits that Mr Podesta’s view of events at work was shared by five other employees. The meeting on 17 November 2020 was clearly highly distressing. Mr Edgar’s conduct was not excused by the fact that he had consulted the HR manager beforehand. It was not reasonable to draw a parallel with a murder investigation or to conclude that one of those present was the perpetrator. If the meeting and investigation was action with respect to discipline, Mr Perry submits the manner in which it was conducted was not reasonable.
With respect to Mr Podesta’s response to the video material, Mr Perry submits that he never said he could not go out, and it is not inconsistent with incapacity for employment to resume hobbies as best as he could. Dr Singh’s certificates confirm his incapacity. If he had any residual capacity, it would be challenging to find some suitable employment at his age and with his experience, having regard to section 32A of the 1987 Act, and any capacity would be minimal.
Mr Perry submits that the evidence shows that Dr Chow considered Mr Podesta totally unfit on 12 May 2021. Further certificates cover the period to 8 July 2021, within two weeks of
Dr Kaplan’s second report. Dr Kaplan only said he may have recovered some capacity from around May to September 2021. To the extent that there is any gap in the certificate and medical evidence, there is a presumption of continuity.

CONSIDERATION

Section 4 of the 1987 Act provides:
“Injury:
(a)            means personal injury arising out of or in the course of employment,
(b)            includes a disease injury, which means—
(i) a disease that is contracted by a worker in the course of employment but only if the employment was the main contributing factor to contracting the disease, and
(ii) the aggravation, acceleration, exacerbation or deterioration in the course of employment of any disease, but only if the employment was the main contributing factor to the aggravation, acceleration, exacerbation or deterioration of the disease, and
(c)     does not include (except in the case of a worker employed in or about a mine) a dust disease, as defined by the Workers’ Compensation (Dust Diseases) Act 1942, or the aggravation, acceleration, exacerbation or deterioration of a dust disease, as so defined.”
Mr Podesta bears the onus of proof. The standard is on the balance of probabilities, meaning I must feel an actual persuasion of the matters necessary to establish his claim: Department of Education and Training v Ireland[51]; Nguyen v Cosmopolitan Homes.[52]
[51] [2008] NSWWCCPD 134.
[52] [2008] NSWCA 246.
The respondent does not dispute that Mr Podesta has, or had, a psychological injury arising out of or in the course of his employment with the respondent.
Dr Kaplan who saw Mr Podesta for assessment on behalf of the respondent diagnosed him as suffering from Adjustment Disorder with anxiety and depression. Initially, Dr Kaplan identified events at work from mid-2017 as having caused the injury. Subsequently, he revised his opinion and considered that the whole or predominant cause was the disciplinary process that commenced around the end of 2020. In his last report, having reviewed the surveillance material, Dr Kaplan considered Mr Podesta was not incapacitated for employment but he did not revise his original diagnosis.
Dr Chow also diagnosed Mr Podesta as having and an Adjustment Disorder as a result of events at work. Dr Singh diagnosed “major depression and anxiety” and “major depressive disorder” to which his employment was a substantial contributing factor.
The respondent does not submit that any other factors caused, or contributed to,
Mr Podesta’s psychological injury. Dr Morris refers to treating him for “major depressive disorder secondary to work-related stress” and said he was receiving treatment for “anxiety and depression and various personal life stressors” but she does not identify the “personal life stressors” or the extent to which they played a part in his condition. Dr Singh noted on 20 January 2021 that Mr Podesta had been under “a lot of stress at work and home lately” but he did not identify the cause of stress at home and did not suggest in his later report that it was a significant contributing factor.
I find that Mr Podesta’s employment was the main contributing factor to his psychological injury.
The real dispute in this case is around whether events between mid-2017 and late 2020 caused or contributed to Mr Podesta’s injury and whether it was wholly or predominantly caused by reasonable action taken in respect of his employment from around the end of 2020.

Events from mid-2017 to late 2020

Mr Podesta refers to taking on additional duties in around 2016 to alleviate pressure on the then Workshop Coordinator and says he was “happy” to take them on. He refers to taking on additional duties after Mr Gallahar started and being given duties for which he was not adequately trained. He refers to his workload but I do not understand him to say the workload itself was a significant factor in his psychological condition.
There is no question that, from around the time Mr Gallahar started at the workshop in mid-2017, relationships became difficult and, ultimately, “toxic”. They were bad enough that, by 2020, six employees lodged a formal grievance against Mr Gallahar and the respondent arranged mediation. It is a reasonable inference that the respondent recognised the extent to which relationships had gone bad or it would not have organised mediation (also referred to as a “workshop”).
I have no doubt that the workplace would have been, at times, an unpleasant and stressful environment to work in. It is quite possible that Mr Gallahar’s behaviour was unreasonable at times end even bullying. He evidently acknowledged some form of “bad behaviour” when he told Mr Colburt that “some of his behaviour was a result of the frustration and difficulties” with the group in the workshop. Dr Kaplan thought the evidence indicated there was “bad behaviour” from both Mr Gallahar and Mr Podesta.
It does not follow that Mr Podesta sustained psychological injury as a result as a result of what happened in the workplace between mid-2017 and around November 2020.
There is no reference in Dr Singh’s records throughout the whole period up until January 2021 to any stress or problems at work. On 20 January 2021, Dr Singh noted Mr Podesta had been under a lot of stress at work and home lately. On 7 February 2021, he noted “significant stress at work”, and on 25 February 2021 he noted “some issues with manager 2 years ago”.
Courts have cautioned about reliance on clinical records which rarely represent a complete record of the exchange between a busy doctor and a patient.[53] However, Mr Podesta does not claim to have reported any stress or psychological difficulties to Dr Singh before January 2021. There is no evidence that he had any time off work throughout that period.
[53] Davis v Council of the City of Wagga Wagga [2004] NSWCA 34], Nominal Defendant v Clancy [2007] NSWCA 349, King v Collins [2007] NSWCA 122, Mastronardi v State of New South Wales [2009] NSWCA 270, and see Winter v NSW Police Force [2010] NSWWCCPD 121.
I accept that what occurred in the workplace leading up to the meeting with Mr Edgar in November 2020 was stressful and formed the background to Mr Podesta’s response to the meeting with Mr Edgar on 17 November 2020 but I am not satisfied that it caused him psychological injury. Even allowing that Mr Podesta perceived Mr Gallahar’s conduct as bullying, the evidence does not support the conclusion that he suffered psychological injury as a result. If it did contribute to his psychological injury, I am not satisfied that it was the main contributing factor.

Was the injury wholly or predominantly caused by reasonable action taken in respect of discipline

Section 11A(1) provides:
“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 respondent bears the onus of establishing, on the balance of probabilities, that
Mr Podesta’s injury was the result of the action within the meaning of section 11A(1), that it was the whole or predominant cause of his injury, and that such action was reasonable.
In Hamad v Q Catering Limited[54], Deputy President Snell stated:
“The causal test in s 11A (1) is “different, and more difficult”, in that the test does not involve proof of “personal injury arising out of or in the course of employment” (the s 4(a) test), or that employment was a “substantial contributing factor” to the injury (the s 9A test), but rather whether the injury was “wholly or predominantly caused” by the relevant action. It is to be proved on the balance of probabilities; normal principles governing proof of causation apply, but subject to the fact that what must be established is a different statutory test to those in ss 4 and 9A. And the onus falls on the employer, rather than the worker.”
[54] [2017] NSWCCPD 6 (Hamad).
I accept that Mr Podesta felt stressed and upset following the meeting on 17 November 2020 and as a result of the subsequent investigation. I accept the evidence of Mr Edgar and
Mr Colburt that Mr Podesta did not appear upset when they met two days later. Mr Edgar’s description of their conversation suggests he may have been trying to ingratiate himself but, regardless, his conduct at that meeting is not enough to conclude Mr Podesta was not feeling upset and felt his employment was under threat as he claims.
Mr Podesta continued at work, apparently without any time off, until 24 December 2020 but
I accept Mr Perry’s submission that workers often continue working despite difficulties.
Mr Podesta reported to Dr Singh on 20 January 2021 and in subsequent visits that he had been under a lot of stress at work and had had problems with his manager two years earlier. His complaint to Dr Singh was reasonably contemporaneous with the meeting and investigation.
The respondent concedes that Mr Podesta’s psychological injury was “probably” predominantly, if not wholly, the result of the action taken by the respondent in calling the meeting and the subsequent investigation.

Was the meeting action taken, or proposed to be taken, with respect to discipline?

In Heggie, the Court of Appeal, dealing with the meaning of “discipline” in section 11A(1), said a broad approach is to be taken to the expression “action with respect to discipline”, and it is “capable of extending to the entire process” involved in disciplinary action.
Mr Doak submits that the meeting on 17 November 2020 was action taken or “proposed to be taken” with respect to discipline. Taking a broad approach to “the entire process”, I agree. Mr Edgar considered that an anonymous, threatening letter to another employee was a serious matter that needed to be dealt with. The letter was clearly the event that triggered the meeting and subsequent investigation. Mr Edgar said at the meeting that an investigation would follow if nobody claimed responsibility. I find that the disciplinary process started at that meeting.

Was the action reasonable?

In Irwin, Geraghty CCJ said:
“... The question of reasonableness is one of fact, weighing all the relevant factors. That test is less demanding than the test of necessity, but more demanding than the test of convenience. The test of reasonableness is objective and must weigh the rights of employees against the object of the employment. Whether an action is reasonable should be attended, in all the circumstances, by questions of fairness.”

In Heggie, AJA Sackville said with respect to discipline, but with equal application to performance appraisal:
“The test of reasonableness is objective. It is not enough that the employer believed in good faith that the action with respect to discipline that caused psychological injury was reasonable. Nor is it necessarily enough that the employer believed that it was compelled to act as it did in the interests of discipline.”
In Sinclair, Spigelman CJ observed that the entire process must be looked at to see if it was reasonable action within section 11A, including looking at the circumstances surrounding the action, both before and after the action.
I agree with the respondent’s submission that it was reasonable for Mr Edgar to call a meeting of the workers when an anonymous letter was left with the clear intention of intimidating the new manager. It was a serious matter and needed prompt action. However, for the following reasons, I am not satisfied that the meeting and the investigation that followed was reasonable action with respect to discipline.
The fact that Mr Edgar consulted immediately with the HR manager and Mr Colbert shows he took the matter seriously and sought advice as to how to proceed. That does not make what followed “reasonable action”.
It is very difficult to determine, on the evidence, what happened at the meeting. There are quite conflicting views as to how Mr Edgar conducted himself. He acknowledges he was “upset and stern” but says he spoke “in a professional manner”. The other managers support him but Mr Colbert says his voice “was slightly elevated at times”. Ms Coleman says he did not raise but it “may have been louder than normal to accentuate his disappointment and the seriousness of the matter”.
I find it more probable than not that Mr Edgar raised his voice at the meeting. That might not of itself be enough to say the manner in which he conducted it was not reasonable but it was not appropriate, in my view to suggest that someone in the team was responsible, no matter how reasonable in his mind that conclusion seemed. It might be appropriate to say that was his suspicion but the evidence indicates that his tone was accusatory. Nor was it appropriate to refer to the exhaustive police investigation of the Claremont serial killings.
The evidence as to whether Mr Edgar threatened anyone’s employment is conflicting. I am unable to conclude that he used words to the effect that he would “sack the lot of them”. However, Ms Coleman says he used words to the effect that, if things did not change, they would be out of work because there would be no workshop. She says this comment was “not made in any sort of threatening or aggressive manner” but I accept that it was at least perceived to be a threat to their employment. It was not an appropriate comment.
It is clear that problems in the workplace “culture” had been identified over previous months and had been spoken about at the mediation session. However, it is not clear that they were put clearly to the workers, and to Mr Podesta in particular.
Mr Colburt’s letter of 20 August 2020 states that Mr Edgar had become aware “of allegations of inappropriate behaviour that may extend across several team members” and he wanted to “establish a way forward by establishing, and agreeing on, the behaviours that are acceptable in the workplace”.
It is not clear what the “inappropriate behaviour” was although it appears it may have been allegations made by Mr Gallahar in response to the complaint against him. Mr Colburt does not say, and it is not clear from the evidence, that the allegations were ever put to the team and to Mr Podesta in particular.
The letter dated 25 November 2020 advising Mr Podesta and others of the investigation referred to the decision to conduct a workplace investigation “into various alleged inappropriate practices that may constitute breaches of Council’s Code of Conduct and policies and procedures” including the recent incident of the threatening letter.
The letter gave no indication of what the other “alleged inappropriate practices” were.
Mr Podesta claims he was “shocked” to find at the first meeting that the investigator focused on issues including buying parts for his personal car and inappropriate conduct towards a former female employee. He says he was “shocked and unprepared” because he understood the investigation would focus solely on the anonymous letter. He says he was “shocked and upset” when he was questioned during the second interview, about methods for raising purchase orders and about the “legal side of local government procurement” and that the investigator said he might be subject to further questioning.
Mr Colbert states that Mr Gallahar made counter-allegations and “raised concerns” about matters in the workshop. Mr Gallahar states that he raised concerns about in particular about Mr Podesta whom he considered a “key instigator”. He expressed concerns that Mr Podesta made sexually inappropriate comments about female staff members and had pornographic magazines in the workshop, and he believed Mr Podesta was manipulating the purchasing process, and using a Council vehicle that he was not entitled to.
Mr Edgar refers to concerns raised by Mr Zanetec about resistance to change, work practices, and lack of respect my team members including Mr Podesta.
The allegations and concerns involved serious matters, some potentially criminal. Neither
Mr Colbert nor Mr Edgar says they were put directly to Mr Podesta prior to the first interview.
Mr Podesta claims the additional matters raised at the interviews had never been discussed with him. Given he had attended the mediation session, I find it improbable that he had no idea of what might be discussed at the meeting with the investigator but it was not enough for the respondent to refer in broad terms to “inappropriate conduct”. It is not enough for Mr Colbert to say that at no point was Mr Podesta informed that the investigation was going to be only about the anonymous letter and at no point did Mr Podesta raise that concern with him, and it is not enough for Ms Coleman to say that he was never told it would be only about the letter.
In BlueScope Steel Ltd vMarkovski[55], Deputy President Roche said at [196] that “basic fairness”, in the circumstances of that case required that the employer give Mr Markovski “advance notice of the meeting, the agenda, and the opportunity to bring a support person”. Whether that is what is required in a particular case will depend on the circumstances.
[55] [2013] NSWWCCPD 69.
Mr Podesta was given advance notice of the interview with the investigator and the opportunity to have a support person with them. However, given the serious nature of the matters under investigation, and the potential implications for Mr Podesta, it was not sufficient notice for the respondent to refer in broad terms to “inappropriate conduct”.
I am not satisfied that the respondent has discharged its onus of establishing, on the balance of probabilities, that Mr Podesta’s injury was wholly or predominantly caused by reasonable action taken, or proposed to be taken with respect to discipline.

Capacity

The respondent does not take issue with Mr Podesta’s claim to have no capacity for employment up to May 2021, based on Dr Kaplan’s report. However, in December 2021, having considered the surveillance material, Dr Kaplan considered that Mr Podesta had capacity for employment without restriction. Mr Doak submits that only Dr Kaplan has seen that material. Further, that it is supported by Mr Podesta’s bank statements which indicate he was moving around a range of locations at some distance from each other and engaging in a range of activities. Mr Doak submits that Mr Podesta has not explained those records and I can place weight on Dr Kaplan’s opinion.
Mr Perry submits that Dr Kaplan considered Mr Podesta was not fit to work in September 2021. He found no signs of exaggeration or malingering. Mr Podesta has explained his actions as seen on the video. Mr Podesta agrees he can go out and sometimes works on his car, but not consistently.
Mr Perry submits that Dr Singh has been Mr Podesta’s general practitioner for many years and is in a particularly strong position to assess his capacity for employment. Mr Perry submits that, to the extent that there is any gap in the evidence, a presumption of continuity should apply.
I am not persuaded that the video surveillance material is seriously at odds with
Mr Podesta’s claims or with him having an adjustment disorder or depressive disorder. The bank records do indicate that he has moved around a fair distance at different times and been to a range of shops and venues. That material has not been put to Dr Kaplan (or any other doctor) and I am not persuaded that it is evidence that he has had capacity for employment during the relevant period. If he has had any (minimal) capacity for suitable employment during that time, there is no evidence on which I could sensibly make a finding as to how much.

Medical expenses

There will be a general order for medical expenses pursuant to section 60 of the 1987 Act.

Determination

For these reasons, I find that the respondent has not discharged its onus to establish on the balance of probabilities that Mr Podesta’s psychological injury was wholly or predominantly caused by reasonable action taken in respect of discipline.
I am satisfied that Mr Podesta has had no capacity for employment from 5 February 2021 and continuing as a result of his injury.
The respondent is to pay Mr Podesta weekly compensation as follows:
(c) from 5 February 2021 to 7 May 2021 at the rate of $1,567.50 pursuant to section 36 of the Workers Compensation Act 1987, and
(d) from 8 May 2021 to date and continuing at the rate of $1,320 per week pursuant to section 37 of the Workers Compensation Act 1987,
with credit for any sick leave credits.
The respondent is to pay reasonably necessary medical expenses pursuant to section 60 of the Workers Compensation Act 1987.

[2022] NSWPIC 122

23 March 2022