Preece v Chemcorp Pty Ltd

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Preece v Chemcorp Pty Ltd [2024] NSWPIC 95
APPLICANT:	Jacqueline Preece
RESPONDENT:	Chemcorp Pty Ltd
MEMBER:	Rachel Homan
DATE OF DECISION:	29 February 2024
DATE OF AMENDMENT:	8 March 2024
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987; claim for weekly compensation and treatment expenses in respect of psychological injury; whether defence pursuant to section 11A(1) made out; multiple workplace events causative of injury; whether events constituted reasonable action with respect to discipline; extent of incapacity; Held – the respondent failed to discharge its onus of establishing that injury was wholly or predominantly caused by reasonable action with respect to discipline; applicant had no current work capacity as a result of injury; awards for the applicant for weekly benefits and treatment expenses.
DETERMINATIONS MADE:	The Commission determines: 1. The respondent has failed to discharge its onus of establishing on the balance of probabilities that 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 discipline or any of the other categories of action in s 11A(1) of the Workers Compensation Act 1987. 2. The applicant has, at all relevant times, had no current work capacity. The Commission orders: 1. The respondent to pay the applicant weekly compensation pursuant to s 37(1) of the Workers Compensation Act 1987 based on a pre-injury average weekly earnings (PIAWE) rate of $1,300, as periodically indexed, from 27 June 2023 to date and continuing. 2. The respondent to pay the applicant’s reasonably necessary medical and related treatment expenses in accordance with s 60 of the Workers Compensation Act 1987 upon production of accounts, receipts and/or Medicare Notice of Charge.

STATEMENT OF REASONS

BACKGROUND

Ms Jacqueline Preece (the applicant) was employed as a sales coordinator by Chemcorp Pty Ltd (the respondent). The applicant claims to have sustained a psychological injury in the course of her employment with the respondent.
Liability to pay compensation in respect of the injury was disputed in a notice issued pursuant to s 78 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) on 1 June 2023. The decision to dispute liability was maintained following internal review on 25 September 2023.
The present proceedings were commenced by lodgement of an Application to Resolve a Dispute in the Personal Injury Commission (Commission) on 6 October 2023.
The applicant seeks weekly compensation from 27 June 2023 to date and continuing and medical and related treatment expenses pursuant to s 60 of the Workers Compensation Act 1987 (the 1987 Act).

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION

The parties appeared for conciliation conference and arbitration hearing on 15 January 2024. The applicant was represented by Mr Ty Hickey of counsel. The respondent was represented by Mr Daniel Stiles of counsel.
Agreement was reached during the conciliation conference that the applicant’s pre-injury average weekly earnings (PIAWE) rate was $1,386.80. Subsequently, the parties informed me that the agreed rate was in fact $1,300 subject to indexation. The applicant confirmed that a general order was sought in respect of the s 60 expenses claimed.
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.

ISSUES FOR DETERMINATION

The parties agree that the following issues remain in dispute:
(a) whether the applicant’s psychological injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the respondent with respect to discipline pursuant to s 11A(1) of the 1987 Act;
(b) the extent and quantification of incapacity resulting from injury during the period from 27 June 2023 to date and continuing, and
(c) whether the medical and related treatment expenses claimed are reasonably necessary as a result of injury pursuant to s 60 of the 1987 Act.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)    Application to Resolve a Dispute and attached documents;
(b)    Reply and attached documents;
(c)    documents attached to an Application to Admit Late Documents lodged by the applicant on 11 January 2024, and
(d)   documents attached to an Application to Admit Late Documents lodged by the respondent on 11 January 2024, other than the statement of Vincent Luu dated 27 November 2023.
Neither party applied to adduce oral evidence or cross-examine any witness.

Applicant’s evidence

The applicant’s evidence is set out in written statements made on 7 March 2023,
29 June 2023, 12 September 2023 and 20 December 2023.
The applicant said she completed a secondary education in Australia to Year 10. The applicant then graduated from secretarial college and also held Teaching English as a Second Language certification and a Certificate IV in workplace assessment and training.
Prior to the commencement of her employment with the respondent in November 2019, the applicant performed contract work for various companies.
The applicant’s duties for the respondent included organising and sending product examples, brochures, catalogues and sell sheets and updating product price lists. The applicant said she had never received specific training, despite not coming from a sales background.
The applicant described a number of incidents which she said had caused her injury.
The first event occurred during a sales conference in July 2022. The applicant said there was a lack of communication from her manager, Kylie Gnaden. The applicant was not given the agenda to the conference but kept being asked for it by her other colleagues. The applicant’s colleague, Vincent Luu, the sales analyst was the only person given the agenda.
The day prior to the conference, Mr Luu left at about 4:30pm saying he would finish everything in the morning. The applicant knew how important the event was. As it was due to start at around 8:30am the next day, the applicant stepped in and organised all the presentation folders with two other co-workers. The applicant expected to be praised for taking this initiative but was instead treated very poorly.
The next day, the applicant had to take a day off. When she came back to work, the applicant noticed that her computer had been touched by somebody because shortcuts, favourites and icons had been moved or deleted. When the applicant asked her colleagues if they knew whether anyone had been on her computer, they seemed uncomfortable and embarrassed. Shortly afterwards, the general manager, Jodie Phillips asked the applicant to follow her to her office.
Once there, Ms Phillips told the applicant that she was the one who had logged onto her computer. Ms Phillips said she was looking for evidence because there had been accusations and allegations about the applicant. The applicant was shocked and asked what she had been accused of. Ms Phillips said she could not tell the applicant anything yet as she was still being investigated. Ms Phillips told the applicant to go back to her desk and keep working and she would let the applicant know in two weeks. The applicant said,
“I then said distraughtly ‘so you want me to go back to work, with all my colleagues knowing something's up which is humiliating and embarrassing, until I'm told in 2 weeks what I've supposedly done!?’ She didn't correct me when I said ‘.... 2 weeks...’ and said once the investigating is done, she'll send me documentation and we'll all have a meeting to discuss it. I now had my head in my hands weeping and unfortunately, without thinking straight, said ‘..what the f...?’ She then shouted at me and said how dare you speak to me like that. I wasn't even thinking when I made that comment to myself. Jodie also swears often and uses the f word often in the workplace. She later accused me of saying ‘What the f... have I done now’ when we first walked into her office which is completely untrue! I didn't know that I was going to be hurled over the coals so we had walked into her office amicably and I sat down on the other side of her desk curious to know what this was about, but I was provided with no information. I felt isolated and humiliated in front of my colleagues.”
The applicant left Ms Phillips’ office in tears and went to Ms Gnaden to try to find out what was happening. Ms Gnaden said she could not help. The applicant felt like her world was collapsing and was distraught. The applicant sat down on a chair and cried. The applicant tried to compose herself but could not stop crying.
The applicant returned to Ms Gnaden’s office and said Ms Phillips wanted her to continue working without knowing what she was accused of for two weeks. Ms Gnaden said
Ms Phillips probably said two days not two weeks.
Ms Gnaden refused to come downstairs with the applicant and stood over the applicant as she was crying on chair. The applicant had expected some support from Ms Gnaden but received none. The applicant could not keep herself together so after a while drove home crying. The applicant drove through the National Park where she had thoughts of driving her car off a cliff to end her pain.
The applicant took two weeks of leave before returning to work in August 2022 to attend a disciplinary meeting. The list of allegations had been sent to the applicant while she was on leave trying to recuperate.
The applicant was accused of screaming and abusing a person during the sales conference. The applicant was baffled at this accusation. The applicant could recall a conversation with a brand manager named Sylvia but was not screaming or abusing her. The applicant said she had a loud voice as both of her parents had hearing problems. The applicant said she still did not know who she supposedly shouted at.
The next day, Ms Phillips called the applicant into her office together with Ms Gnaden. The applicant said,
“Jodie told me that she had taken off some accusations after my defence during the disciplinary meeting, but she had added that I have sworn on the workplace, and I have said 'what the f... have I done now' at her. I apologised for saying the ‘f' word and reminded her of the actual context it was said. She insisted that she was right and that wasn't the way it was said. I tried to explain that her version didn't make any sense as we'd walked in amicably to her office with no hostility so why would I say, ‘What the f have I done now’. She told me angrily that she wasn't going to argue with me and handed me the first written warning and told me that I still had a job.”
After that, Ms Phillips avoided the applicant as much as she could and would turn her back on her in group conversations. Ms Phillips gave the applicant dirty looks and her hatred towards the applicant was palpable.
The other allegations on Ms Phillips’ list of complaints were trivial things that had not been raised with the applicant at the time. The applicant felt like it was a fishing expedition to find anything to get rid of her.
In December 2022, the applicant was asked to send parcels to two area managers. After several days, the parcels had not been delivered and Ms Phillips sent an email asking the applicant whether they had been sent. The applicant replied, providing evidence of her efforts to track the parcels with Australia Post. The applicant later discovered that the address label was unreadable and the parcels were returned. The applicant sent an email explaining this to Ms Phillips, copying in one of the recipients.
Ms Phillips was very upset about this, saying the applicant had given away too much information. The applicant responded that the recipient was not upset and had even sent an email joking about her parcel travelling the world. The applicant said,
“Jodie then sent me an email saying: ‘I am not in the office but when I'll be back, we are going to have a meeting about your attitude’. I did not have any attitude. Jodie was being so hostile and cold towards me for no reason. To that I answered why she was bulling me. She answered back how did I dare to argue with her. Immediately, all my fears came back, and I started crying. I tried to reach for a manager because I wanted to communicate that I wanted to go home. The only one available was the owner, which is also Jodie's father. I asked him if he did know why Jodie was so upset about me. John was lovely and try to justify the behaviour saying that her daughter was having a dental procedure and probably was in a lot of pain. He told me that: ‘if you think you are treated poorly and abused, you need to document your case and report it properly’.
The applicant returned to her desk and wrote an email to Mr Fisher before going home.
On 7 February 2023, the applicant was given the new 2023 catalogue. The applicant was asked by Ms Gnaden to create a price list to match the catalogue. Her instructions were vague. The applicant created the list and called the draft document “Chemcorp Pricelist Feb ’23 (without [brand name])”.
Subsequently, one of the area managers emailed the applicant asking for a copy of the catalogue or at least a price list, which was by then overdue. The applicant emailed her the draft document cc’ing the other area managers whom she knew were also waiting for it.
This caused a big problem and the applicant was asked to rename the document by removing the brand name in the brackets. The applicant said,
“I was asked by either Kylie or Marisa to rename the title by removing the words in the brackets which I did immediately. Jodie came to my desk and asked me if I'd done what I'd been asked (I was surprised because it was the first time she had spoken to me since August 2022) and I said yes I had and mentioned that I was unaware of what was going on as no one has said anything to me about it. She replied in a sarcastic tone ‘so not your fault, it's someone else's!?’ I was once again unawares of what I'd done wrong this time and disturbed at her comment but as it was home time, and she was locking up I left without a word.”
The next day, the applicant was called into Ms Gnaden’s office. She explained that the brand name should not have been put in the document title as it was confidential. The applicant explained,
“I had no idea that this brand was confidential. The instructions given to me were to create a catalogue without this brand name and for clarity, this is what I named the catalogue. I had no idea the brand name was confidential. As usual, no full instructions were provided to me. I then said ‘so are you telling me that you couldn't tell me that this was confidential because it was confidential’ She simply said ‘yes’ to which I replied ‘are you serious?’ She then shouted at me and said ‘yes, I'm serious!’ I was in shock, because she never told me this and she just assumed I would understand her instructions, which were entirely vague. She then said that I need to take responsibility for my own errors, however, took no accountability for not providing me with clear instructions.
I said to her that I do take accountability for my errors but if she had just told me it was confidential none of this drama would have happened. She rolled her eyes at me and said ‘no, you don't’. And then she said that she'd ‘owned up to Jodie’. I asked what she owned up to and her exact reply was ‘your mistake’. I said ‘there you go, throwing me under that bus again’ she said she wasn't going to argue with me anymore, I went back to my desk shaking my head, to continue working, but after a short while I realised that I just couldn't function — I'd once again been wrongly accused and it hit me like a ton of bricks!”
The applicant stated that other than the written warning she received in August 2022, she had not been performance managed or subject to any disciplinary proceedings. It was not the warning in August 2022 that upset her but Ms Phillips’ and Ms Gnaden’s lack of support and their hostility towards the applicant. The applicant felt humiliated and treated like a criminal when her computer was searched.
The applicant said there were no issues in her life outside of work which had caused or contributed to her injury. The applicant was medicated for low serotonin in her 20s but was in good psychological health and able to perform her job when she commenced employment with the respondent.
After leaving the workplace on 7 February 2023, the applicant went to her husband’s regular medical centre because her local doctor was not available. The doctor there gave the applicant a certificate for the rest of the week and asked her if she was going to make a workers compensation claim. He explained that he did not take on workers compensation matters and the applicant did not have a history with that medical centre. A few days later, the applicant went to see her local general practitioner to get another certificate. The applicant was referred to a therapist, Kristen Bayliss.
The applicant made a previous claim for compensation in 2019 but did not pursue it as her symptoms resolved entirely.
In the applicant’s third statement, she responded to written statements given by Ms Gnaden and Ms Phillips.
The applicant agreed that at times her performance at work was ineffective but this was because of the way she was treated. This was particularly due to Ms Phillips’ lack of engagement with her and Ms Gnaden’s constant criticisms and putdowns, as well as the lack of information and instruction given to her by Ms Gnaden.
The applicant said that, in general, Ms Gnaden did not provide adequate information or instruction when she delegated tasks. The applicant stated that she was demoralised by the lack of support,
“Whenever I ask for more information/instruction regarding a task, she would react with words to the effect of ‘You should already know’. I brought this up with Kylie as an issue many times, but Kylie would still always say words to the effect of ‘You should already know’, despite it being my first time doing the tasks at times. I felt very unsupported.”
In relation to the incident involving the price list, the applicant stated,
“In the first paragraph of Allegation 4, Kylie says that I knew that the negotiations were going on to include a new brand in our catalogue. This is not true. I was not told by anyone regarding a negotiation nor was I aware of any negotiations regarding a new brand. Kylie says that I was 'somehow involved' in a meeting on 8 December 2022. I was instructed to assist with coffee, but this was my only involvement in this meeting. The only involvement in most meetings including the one on 8 December 2022 was only if I had to organise catering and/or teas and coffee for the meeting. For most meetings, I was never told of any information, including who attended and the purpose of the meetings.”
In relation to Ms Phillips’ evidence that the applicant’s attitude was good only if she was focused, the applicant responded,
“It was in fact Jodie who was constantly in a bad mood. She would always ignore me when I say good morning and walk around swearing out loud. Other people who worked at Chemcorp at the time said they had similar experiences with Jodie in a mood.”
The applicant said her sick leave record was not poor until the harassment started occurring and she started having suicidal thoughts.
With regard to Ms Phillips’ evidence that the applicant had shouted at her colleague Sylvia during the conference, the applicant stated:
“I did not lose the plot at any point. Sylvia had been rude to me for three days during the conference preparation and I approached Sylvia to ask what was wrong. She started saying ‘Stop shouting at me’. I was never shouting at Sylvia, I was simply talking to her. I was never in a far proximity to Sylvia and did not need to shout at Sylvia. Next time I spoke to Kylie about the shouting incident, Kylie said that the people in the admin team downstairs heard. I then asked a colleague whose desk is at the level below the sales conference, if she heard anything on the day. The college said, ‘I was downstairs and I did not hear it’. I believe Jess, Sylvia's assistant was finishing up and walking down the stairs at the time and heard our conversation and Sylvia saying, ‘Stop shouting at me’. The third time Kylie spoke to me regarding the incident, she said she heard it when she was in her own office which is located downstairs. This was the first time Kylie mentioned this. I'm sincerely very confused by this allegation because I was not shouting. Kylie's recollection of who heard me 'shouting at Sylvia' changed multiple times, from a colleague downstairs to Kylie from her office downstairs, then to the whole office hearing this.”

The applicant said Sylvia’s statement was incorrect. The applicant said she was aware the sales conference started at 9am and had arrived at work early that morning. The applicant had prepared everything in the preceding week and was just doing final checks. Unlike Sylvia, the applicant was not required to prepare anything for catering. The applicant asked Sylvia if she wanted some help but she always refused and turned away in a rude manner. The applicant believed that Sylvia had been rude to her for the past three days leading up to the sales conference because the applicant had not provided her with an agenda. The applicant did not have an agenda and told her multiple times that it was with Vincent. The applicant said,
“It is true that we did receive a tablecloth with some stains on it, however, I did not bring a dirty old bed sheet. I also did not raise my voice at any point. I did say in a normal tone, ‘why is everyone annoyed at me’. I went up to Sylvia and asked her what was wrong, as she has been rude to me for the past three days leading up to the Sales Conference. I said to her words to the effect of, ‘Sylvia what's wrong, I just don't understand why you're being so rude to me’. Sylvia said to me, ‘stop shouting at me’. At no point did I shout at Sylvia.”
The applicant denied that there were numerous occasions where she raised her voice and yelled at staff members. The applicant expressed the belief that she had a good relationship with her colleagues.
The applicant denied that her husband had stormed into the office in an aggressive manner on a number of occasions and appeared to be under the influence of substances.
The applicant said that when she was asked to send the parcels to the two area managers, she was not told that they contained a prize and that it was a surprise. The applicant was simply asked to get the boxes out. The applicant was not aware that the two area managers were not supposed to know about the parcels. The applicant was under the impression that they had confirmed with Ms Phillips that they had not received their parcel.
The applicant said she had only approached Ms Phillips’ father because there were no other managers available in the office at the time. The only person the applicant could go to for approval to leave was Ms Phillips’ father.
With regard to the confidential brand name, the applicant said that nothing regarding a negotiation or the fact that something confidential was going on had been communicated to the office. The applicant was not aware of the negotiations or the fact that they were confidential. The applicant’s only involvement in the meetings was to supply catering.

Respondent’s evidence

Jodie Phillips

The respondent relies on a written statement prepared by Ms Phillips, signed on
10 March 2023.
Ms Phillips gave evidence that she was the respondent’s managing director.
Ms Phillips described the applicant as a below average worker, with a poor sick leave record and an unpredictable mood.
Ms Phillips responded to each of the applicant’s allegations. With regard to the sales conference described in the applicant’s statement evidence, Ms Phillips stated:
“Jaqueline was overseeing the setup of the sales conference and at one point she lost the plot and started yelling at Sylvia. I was not present but many colleagues in the admin department, one level below the showroom where the conference was taking place, have heard the altercation…
After the conference I had too many complaints about her behaviour that I had start an investigation to verify those allegations. Jaqueline clearly was aware of this, and she had taken sick leave right after the conference ended.
When she got back in the office on 5 August 2022, she noticed changes on her computer. I had logged on it because I wanted to collect information about the investigation we were conducting. I retrieved just the phone logs told her that we were going have a disciplinary meeting within the next few days. Jacqueline misheard me and I clarified. She then become very aggressive and started swearing at me.”
With regard to the disciplinary meeting following the applicant’s return from leave, Ms Phillips said,
“On 15 August 2022, I went through the letter I had sent her about the allegations of misconduct with her. She came prepared to the meeting and tried to defend herself.
One allegation of late arrival was not substantiated, and I dismissed It. The allegations of aggressive and disrespectful behaviour, as well as the one of improper use of the company phone were substantiated, and she was issued with a formal written warning. l have provided a copy of the process to the investigator, Jacqueline was fully aware the aggressive and disrespectful was directed towards Sylvia. What I did not share was who informed me of the behaviour and who from the admin department overheard the incident.”
With regard to the parcel incident Ms Phillips stated,
“I was sending to two area managers an award and gift vouchers to acknowledge their achievements of their ten years anniversary with the company. It was meant to be a surprise, and it was planned to arrive before Christmas. I definitely did not want them to know about it in advance. I was following up the matter with Jaqueline because the postal service was being particularly slow. At once, she started coping the addresses in our email correspondence. I wasn't happy and I mentioned that to Jacqueline. She did not admit her mistake and instead started to defend herself portraying it as a kind of joke.
In addition, she tried to minimise her responsibility by inverting the timeline of events. According to her, she was having a gracious conversation with one of the addressees, Renee, when she put me in copy to keep me informed.
I responded that it wasn't funny and that even her recollection of the events was incorrect. She had put in copy the addresses in our conversation first because Renee did not know she was going to receive a parcel. I added that I did not like that attitude and that we would talk about it once I'd be back in the office. She responded that she was surprised and extremely upset and then for the first time, she accused me of bulling her.
She then went in tears to speak to my father about what had just happened. My dad has a stage IV lung cancer and comes into the office rarely and only as a distraction. That indeed was not appropriate.
I did not follow up her accusations of bulling as my father contracted COVID and was receiving hospital treatment over the Christmas Period.”
With regard to the price list incident, Ms Phillips stated,
“Since December 2022, I had been in negotiations with a company that was terminating their partnership with their current Australian distributor of a well established brand and transitioning the business to Chemcorp, Work was going on in the office, and everybody was sort of aware that there was something going on that needed to be confidential.
On 6 February 2023, Jaqueline created a price list where the name of the 'confidential brand' was mentioned and then, autonomously, sent that document to all the area managers. This generated a lot of commotion, the contract was not signed yet and we could have been liable of a breach of contractual negotiations.
When I become aware of the situation, I went to Marisa, who manages all the Sales representatives and asked her to fix the problem. She sent an email asking to ignore the written communication from Jaqueline, and then she had phone calls with all of them to explain what has happened. Jaqueline had already renamed the document, as if she had realised that she had made a mistake.
At the end of the day, I was locking up the office, but Jacqueline was still at her desk working. I did not want to push her out. I then approached her and asked Jacqueline if she had fixed the price list and she answered: ‘nobody told me it was confidential’. I responded: ‘sure, it is always someone else’s fault.’ She did not respond, and we all left.”
Ms Phillips said there was a disciplinary process open in relation to the breach of confidentiality and altercation with Ms Gnaden but the applicant had not been notified of that yet as she was on workers compensation.
Ms Phillips described an incident in February 2022 when the applicant’s husband was banned from the work premises after being verbally aggressive towards the applicant in the workplace on a number of occasions. On one occasion, he accused the applicant of having an affair with another worker who was openly homosexual. Ms Phillips suggested that the applicant’s family life had an impact on her work performance.

Kylie Gnaden

Ms Gnaden signed a written statement on 21 March 2023.
Ms Gnaden described the applicant as inconsistent and said her performance had dropped over time. The applicant’s lack of focus and inability to recall information and tasks she had previously done repeatedly resulted in poor outcomes.
In relation to the sales conference, Ms Gnaden confirmed she had only given the agenda to Mr Luu. The applicant’s task was to prepare the folders with the work Mr Luu had done.
Mr Luu finished his tasks and the applicant left her work to the last minute.
Ms Gnaden confirmed that after two weeks of leave, the applicant attended a disciplinary meeting. The applicant was prepared and in control and read from notes.
With regard to the price list incident, Ms Gnaden stated:
“Ms Preece knew that negotiations were going on to include a new brand in our catalogue. On 8 December 2022 we were having a meeting in our showroom with a representative of the brand in question. Ms Preece was somehow involved because she was helping with coffees and morning tea. On that occasion she was explicitly told that the meeting was confidential, and she could not share anything about it.
After, we have spoken in my office about the sensitivity of the matter multiple times, I am certain that she was aware that we could not talk about anything until the contract was signed.
She made a mistake by Including the name of the brand in a document and autonomously sharing it via email with the area managers on 6 February 2023. She could not admit it though. Instead, the day after she came into my office and started accusing me of throwing her under the bus. I responded: ‘nobody is putting you under the bus, you are’. I added that I had taken responsibility for that mistake with the general manager because the mistake was made by a staff member under my responsibility.
She did not like it. She was restless and aggressive and could not stay still, nor seated, nor standing. She kept going on with disrespectful language and denial. Thankfully we had no consequences for breaching the contract. I tried to calm her down telling her that she just had to apologise and will move on. I did not succeed, and I asked her to leave my office.
She went to her desk but shortly after she came back in to tell that she had to leave. I responded: ‘if this is how you feel, please take some time to calm down and when you are able to see things more rationally, came back, and we can discuss it’. ‘Hopefully, then, you will see things clearly and apologise so we could move on’.”
Ms Gnaden confirmed that another disciplinary proceeding was “awaiting” the applicant.
Ms Gnaden said the applicant had disclosed to her that her husband and daughter had both experienced suicidal ideation. The applicant’s financial position was precarious. Ms Gnaden said there were many things going on in the applicant’s personal life that affected her performance at work.

John Fisher

A written statement from John Fisher, Ms Phillips’ father, was made on 28 November 2023. Mr Fisher confirmed that on an occasion in December 2022, the applicant knocked at his office door upset. The applicant said she was being bullied by Mr Fisher’s daughter, Jodie. Mr Fisher said he was taken aback by the news because Jodie was a considerate manager and everyone praised her.
Mr Fisher said he did not dispute the allegations but suggested the applicant speak with
Ms Phillips.

Employer records

On 14 February 2022, Ms Phillips sent an email with the subject, “Meeting Summary” to the applicant expressing concern about issues at home impacting the applicant’s productivity and quality of work. The email said the applicant would be supported to take a full day of leave if necessary. The applicant was reminded,
“●      Your working hours are 9am to 5pm, please keep to these hours. No working back until the last person leave,
·        You are not to use your phone during work hours (except during your lunch break), For important matter people can reach you through the switch,
·        Your husband is not allowed on the premise. He causes disruption at the workplace, from blocking driveways to his aggressive tone. If he comes onto the premise, he will be ask to leave immediately or the police may be contacted.”
A letter dated 4 August 2022 from Sylvia Lechowitz described a verbal altercation with the applicant on 26 July 2022. The letter stated,
“When I arrived at work at 8am, the set up for Sale Conference was not complete. There was no table for catering, lights and a/c were off, the urn needed to be bought up, filled and boiled etc . . I asked another colleague to assist with set up, as the Sales Co-ordinator, Jacqueline Preece was still not in at 8.30am and Sales Conference was due to start at 9am.
When Jacqueline did come up stairs to set up, she continued to play with the Mentos lollies, and was no help. When I asked for a tablecloth, she bought up a dirty old bed sheet. I said that we cannot use a bed sheet on the catering table, Jacqueline became agitated and raised her voice, saying ‘why is everyone annoyed at me’, to which I replied, maybe it was because everyone was doing her job. Jacqueline then proceeded to yell at me, I asked her to please calm down and not raise her voice at me. She continued to yell, and I again asked her to please stop yelling and I said that is it not appropriate to yell at others in the workplace. She them stormed off.”
Ms Lechowitz said this was not the first occasion that the applicant had raised her voice and yelled at staff members.
An email from Jessica Kalogeras to Ms Phillips dated 5 August 2022, referred to the incident described above and another occasion on which the applicant was overheard talking in an angry and raised tone to another employee. Ms Kalogeras said the incidents had made her feel uncomfortable and were distressing.
A letter dated 8 August 2022 advised the applicant of a number of allegations and invited her to attend a disciplinary meeting. The allegations included:
(a)    offensive and verbally abusive behaviour towards a colleague in the showroom on 26 July 2022;
(b)    failing to perform the inherent requirements of her role on 28 July 2022 by arriving at work at 9am and doing her makeup in the bathroom instead of assisting with the sales conference;
(c)    using the company’s phone for non-work related and unauthorised matters, and
(d)    ongoing inappropriate and disrespectful behaviour including engaging with
Ms Phillips in a rude and disrespectful manner on 5 August 2022.
An undated, typed response to the allegations prepared by the applicant is in evidence.
A letter dated 16 August 2022, addressed to the applicant, referred to a disciplinary meeting held on the same date. The letter noted that the allegation of yelling at a colleague had been substantiated. The allegation that the applicant had arrived late and was doing her makeup in the bathroom instead of assisting with the sales conference was unsubstantiated. The allegation of the applicant using the company phone for an unacceptable volume of personal calls was substantiated. The allegation that the applicant had exhibited inappropriate and disrespectful behaviour in the workplace was also substantiated. The letter was said to constitute a formal written warning that the applicant’s conduct was unacceptable.
An email chain between the applicant and Ms Phillips in December 2022 regarding the missing parcels included an email from the applicant thanking Ms Phillips for letting her know that one of the parcels had been delivered, which read:
“Apologies that you were cc'd in my friendly ha ha to Renee & Anna”
Ms Phillips replied,
“In the parcel is Renee's 10 year service award and a gift vouchure, There is nothing funny about Australia Post not being able to deliver it.”
The applicant responded,
“Jodie, it was just a friendly convo with Renee who sent this email to me first
…
If you wish me to come down and talk to you about this I'm more than happy to. Just let me know.”
Ms Phillips wrote:
“Jacqueline. I can read perfectly fine. And we will be discussing your attitude when I'm back in the office.”
The applicant responded:
“Happy to chat Jodie. I am extremely confused as to why you think I have attitude. I am once again Just defending myself and this lime on what was a completely innocent email to a colleague. You were only left cc'd in so you knew what had taken place with Aust Post, which I then apologised for. I am once again flummoxed and extremely upset as to why you insist on bullying me.”
Ms Phillips replied,
“Jacqueline,
That is extremely serious allegations and one I will not take lightly. Bullying is not advicing that I can read and Australia post being unable to deilver funny. The was after you email me and not the other way around. And the fact you are continuing to argue with me is an example of the attitude.”
An email chain between the applicant and Ms Gnaden about the price list incident is also in evidence.
An email from Ms Gnaden to Ms Phillips dated 7 February 2023 described an interaction with the applicant earlier that morning regarding the price list:
“• Before I even sat down Jacqueline started ranting and pointing at me that none of this was her fault and that she was never told the brand was confidential, I asked her to calm down and take a seat.
• Jacqueline was highly emotional and defensive as she recounted to me why none of this was her fault.
• Jacqueline said that it is her job to make the pricelist up and that is why she did it. She said Renee had asked her for a current pricelist so she sent her the one that matched the new catalogue ( that wasn't final yet). When I questioned why she would send something out that included a brand that was not approved/announced yet she proceeded to blame me, saying I don't tell her anything anymore. I tried to get her see reason, that if something is confidential I cant talk about it and her response to that was ‘you're insane’ and ‘What bullshit’
• Again, I cautioned her to calm down and not to speak to me like that
• Jacqueline then accused me of ‘throwing her under the bus’ and said this is the third time I have done this. I asked her to please give me examples of what she was referring to and her response was ‘I can’t think of them right now’.”
Ms Gnaden indicated that she had asked the applicant to leave her office. Five minutes later, the applicant returned, crying and said she needed to leave, felt betrayed and sick and could not work.
A letter dated 7 February 2023 from Ms Lechowitz recounted the same event in a similar manner. An email from Marisa Sanu to Ms Phillips dated 7 February 2023 described the same interaction with Ms Gnaden.
A letter addressed to the applicant, also dated 7 February 2023, from Ms Phillips, invited her to attend a disciplinary meeting on 23 February 2023. The letter alleged that on
6 February 2023, the applicant breached company confidentiality policies without prior consent. In particular, the applicant had released information of a potential new brand to other employees and customers without consent, whilst negotiations were in progress.
The letter further alleged that on 7 February 2023, the applicant exhibited inappropriate and disrespectful behaviour in her interaction with Ms Gnaden.

Treating evidence

Clinical records from North West Medical Practice included a consultation recorded on
20 July 2021 for a mental health care plan. Problems with stress at home were noted.

At a consultation on 11 February 2022, the applicant’s Zoloft prescription was increased.
On 9 February 2023, Dr Richard Fletcher recorded that the applicant had gone off work with a note from another general practitioner. The applicant was noted to be undergoing a performance management and disciplinary process. The applicant felt she was being bullied.
On 14 February 2023, Dr Fletcher recorded allegations of bullying and harassment in the workplace. A number of events were said to be impacting the applicant. A previous history of depression with anxiety was being “well controlled” with Zoloft until the issues relating to work. The applicant was referred to psychologist, Kristen Bayliss.
Psychological symptoms continued to be recorded in Dr Fletcher’s notes thereafter.
Certificates of capacity issued by Dr Fletcher certified the applicant as having no current work capacity in respect of anxiety and depression related to allegations of bullying and harassment in the workplace.
Clinical notes from the applicant’s psychologist Ms Kristen Bayliss are also in evidence. Handwritten notes of a psychological assessment on 5 April 2023 made reference to workplace events in July 2022, December 2022 and February 2023. An impression was recorded of “long standing depression (MDD) exacerbated by stress at work (bullying)”.

Dr Kumagaya

The applicant relies on a medicolegal report prepared by consultant psychiatrist, Dr David Kumagaya, dated 29 June 2023.
Dr Kumagaya took a history of the events surrounding the workplace investigation in
July 2022, stating,
“Ms Preece described considerable distress at the manner in which her involvement in the investigation was broached, as well as the uncertainty caused by the lack of information provided to her. In the context of such workplace stressors, Ms Preece described the subsequent onset of depressive and anxious symptoms.”
Dr Kumagaya also noted the disciplinary meeting in August 2022 and two other incidents in the workplace, namely the parcel incident and the price list incident. The applicant reported that these incidents further destabilised her mental state, such that she had been unable to work beyond 7 February 2023.
Dr Kumagaya noted that the applicant had been treated for her psychiatric symptoms by her general practitioner and psychologist. The applicant’s prescription for sertraline had been increased.
Dr Kumayaga recorded a prior psychiatric background of a depressive syndrome during the applicant’s twenties and the prescription of sertraline. There was a prior compensation claim for psychological injury in 2019.
Dr Kumagaya performed a mental state examination and diagnosed a major depressive disorder with anxious distress.
Dr Kumagaya expressed the opinion that employment with the respondent was the main contributing factor to an aggravation of the applicant’s pre-existing condition:
“Ms Preece described a series of workplace incidents which aggravated her underlying depressive illness. She noted, for example, being advised of her involvement in a workplace investigation only after her computer was searched. Ms Preece stated that at the point of disclosure of her involvement in this investigation, she was not provided with further information, which distressed her considerably. Ultimately, such allegations were noted to be spurious in nature. Ms Preece also reported being subjected to heavy criticism from her general manager for incidents that she did not believe warrant such reactions. It was in the context of such workplace stressors that Ms Preece experienced an aggravation of her underlying depressive syndrome, manifesting as the psychiatric condition, major depressive disorder with anxious distress.”
With regard to the applicant’s capacity for work, Dr Kumagaya said:
“Prior to her last day of work (7 February 2023), Ms Preece was incapacitated for work for approximately two weeks during July owing to her workplace injury. Subsequent to her last day of work, Ms Preece has been fully incapacitated for work.”
Dr Kumayaga clarified that the applicant did not have capacity for work in any occupation considering her age, educational qualifications, training, experience, skills and individual characteristics.
Dr Kumagaya was asked to comment on the report of Dr Karthik Modem for the insurer, and responded:
“Dr Modem states, ‘I believe that Ms Preece’s psychological injury is predominantly caused by the employer’s actions taken by the employer concerning the allegations made against Ms Preece’s behaviours in the workplace’. I respectfully disagree with this opinion.
Ms Preece described a series of workplace incidents as significantly contributing to her psychological injury. Ms Preece described how she was investigated for spurious allegations regarding her alleged misconduct during a recent sales conference.
Ms Preece described how she was not alerted to this investigation until her computer was searched, and subsequent to this, how she was not provided information regarding the basis of the investigation. Ms Preece also described how she was subjected to heavy criticism from her general manager for incidents that she did not believe warrant such reactions. Ms Preece described how it was the manner of engagement of her manager, the differential criticism that she received, as well as the unreasonableness of her involvement in the workplace investigation, which resulted in the onset of her psychological injury.”

Dr Modem

The respondent relies on a medicolegal report prepared by psychiatrist, Dr Karthik Modem, dated 12 April 2023.
Dr Modem recorded that the applicant described the three main incidents at work in
August 2022, December 2022 and February 2023, as well as “lots of stuff” she had brushed off in between.
Dr Modem took a history of the applicant’s Zoloft prescription being increased after the August 2022 incident.
Dr Modem made a diagnosis as follows:
“Based on the current assessment, history provided and review of all the documentation provided, Ms Preece meets criteria for a psychological Injury arising in the context of work-related stressors, namely, Adjustment Disorder with anxious mood. This disorder Is characterised by developing emotional/behavioural symptoms in response to an identifiable stressor(s), in this case work-related stressors as detailed above.”
Dr Modem was asked to identify the predominant cause of the applicant’s symptoms and responded:
“Considering the history provided by Ms Preece and the documentation provided, including the factual investigation report, on the balance of probabilities, I believe that employment is the main contributing factor to the current psychological injury and not merely an aggravation, exacerbation, or deterioration of a pre-existing psychological condition. Therefore, on the balance of probabilities considering all the information at hand, including the factual investigation report, I believe that Ms Preece's psychological injury is predominantly caused by the disciplinary action taken by the employer concerning the allegations made against Ms Preece's behaviours in the workplace.”
Asked further whether the injury was wholly or predominantly caused by actions undertaken by the employer with respect to the applicant’s behaviour in the workplace, Dr Modem responded:
“Though Ms Preece alleges bullying since mid-last year, it appears to coincide with
Ms Phillips suggesting a time for setting up a disciplinary meeting. She was given the written warning in August 2022. Subsequent incidents described by Ms Preece were in the context of misplaced/ lost parcels and potential dissemination of confidential information which may have resulted in breach of contractual negotiations for the company. On the balance of probabilities considering all the information at hand, including the factual investigation report, I believe that Ms Preece's psychological injury is wholly and predominantly caused by the employer's actions concerning the allegations made against Ms Preece's behaviours in the workplace.”

Respondent’s submissions

The respondent observed that although “injury” was not in dispute, the applicant was seeking psychological treatment and being prescribed medication for psychological symptoms throughout the period of her employment. This was said to be relevant to the issue of the whole or predominant cause of the “injury”.
The applicant commenced employment with the respondent November 2019 but in these proceedings described an injury occurring between 2022 and 7 February 2023.
In the clinical records there was no reference to workplace issues causing symptoms until early 2023. The applicant sought treatment for non-work-related stressors in 2021. In 2022, the employer started to raise performance issues with the applicant.
In February 2022, the applicant was given a direction from the employer regarding her work hours, family members attending the premises and use of her work phone. This appeared to be the first disciplinary issue involving the applicant. There was, however, nothing to suggest that the applicant sought treatment in relation to these issues.
In August 2022, disciplinary action was taken with respect to the applicant’s conduct at a sales conference. The evidence from Ms Lechowitz described an altercation with the applicant at the conference and indicated that it was not the first occasion where the applicant had raised her voice. The applicant was invited to a disciplinary meeting and given a written warning.
The respondent also referred the Commission to the contemporaneous accounts of the interaction between the applicant and Ms Gnaden on 7 February 2023. Those accounts recorded that the applicant was yelling, swearing and accusing Ms Gnaden of being ‘insane’. The respondent submitted that this constituted inappropriate conduct which warranted further disciplinary action being taken.
A further disciplinary letter was prepared on 7 February 2023 inviting the applicant to a meeting to discuss a breach of confidentiality in relation to the price list as well as the applicant’s inappropriate and disrespectful behaviour towards Ms Gnaden.
The respondent noted that in the clinical records there was no evidence of psychological symptoms related to work until 9 February 2023. The clinical evidence was consistent with action with respect to discipline being the whole or predominant cause of the applicant’s psychological injury. The respondent submitted that the meeting with Ms Gnaden was in effect a disciplinary meeting. The other relevant disciplinary action consisted of the letter inviting the applicant to a meeting dated 7 February 2023.
The respondent referred to the statement evidence of Ms Phillips confirming that disciplinary proceedings against the applicant were pending due to the applicant’s cessation of work.
The respondent submitted that each of the four incidents identified by the applicant resulted in disciplinary action, the most significant of which was the incident on 7 February 2023. There was no specific evidence of any other bullying, harassment or lack of support.
The respondent relied on the medical opinion of Dr Modem to satisfy the evidentiary requirements set out in Hamad v Q Catering Ltd.[1] There was clear medical evidence to support the s 11A(1) defence. The timing of the cessation of work also demonstrated that discipline was the predominant cause of the injury.
[1] [2017] NSWWCCPD 6.
The respondent submitted that although a final disciplinary meeting was yet to take place, it fell within the ambit of action “proposed to be taken” for the purposes of s 11A(1).
With regard to the reasonableness of the respondent’s actions, the respondent submitted that the Commission would observe the three consistent accounts of what happened on
7 February 2023 in the respondent’s evidence. The Commission would come to no other conclusion than that it was reasonable for the respondent to take disciplinary action in light of the applicant’s conduct. It was objectively reasonable for the applicant to be given notice of disciplinary proceedings in respect of conduct which included yelling at a supervisor in the presence of her colleagues, not to mention the breach of confidentiality. Objectively, it was appropriate and reasonable for a disciplinary investigation to take place, with a meeting to occur in due course.
The letter dated 7 February 2023 gave the applicant fair notice of the allegations. The respondent submitted that the Commission would find that the s 11A(1) defence was made out and give an award for the respondent.
If the Commission were to find against the respondent, the respondent observed that the PIAWE was agreed.
The respondent noted that although the certificates of capacity said the applicant was unfit for employment, the respondent’s medical evidence simply suggested that she should not return to work with the same employer. It was suggested that the applicant could return to work with a different employer towards the end of 2023.
The respondent observed that Dr Kumagaya’s report was dated in June 2023.
In her most recent statement, the applicant confirmed that she attempted to return to some work in September 2023. This evidence was consistent with Dr Modem’s view that by September or October, the applicant ought to have had some ability to return to work with a different employer. There was no evidence from the applicant’s treating doctor with regard to the treatment the applicant was receiving and whether her condition was improving. The respondent submitted that it was open to the Commission to find that the applicant had some capacity for work by October 2023.
With regard to the claim for medical and related treatment expenses, the respondent agreed that a general order would suffice.

Applicant’s submissions

On the question of capacity, the applicant submitted that all the medical evidence indicated that the applicant had total incapacity. The certificates of capacity all indicated this and there was no evidence to the contrary from the respondent’s expert. Dr Modem’s report suggested that the applicant could regain some capacity with appropriate treatment. An intensive treatment regime was recommended but not followed because the claim was denied.
Applying the authorities in cases such as Wollongong Nursing Home Pty Ltd v Dewar,[2] the applicant submitted that the Commission would be satisfied that there was no suitable employment in which she could engage.
[2] [2014] NSWWCCPD 55 (Dewar).
The applicant also noted the respondent’s suggestion that there was relevant “proposed action” for the purposes of s 11A(1). The applicant submitted that the disciplinary letter dated 7 February 2023 was never provided to the applicant. The applicant presented to her general practitioner with psychiatric symptoms prior to receiving the letter.
Other than the alleged breach of confidentiality, the conduct which was the subject of the letter dated 7 February 2023 post-dated the applicant’s psychological decompensation. The applicant submitted that if the discussion with Ms Gnaden on that date could be characterised as disciplinary action, it pertained only to the disclosure of confidential information. The meeting with Ms Gnaden on 7 February 2023 was entirely about the breach of confidentiality.
The applicant submitted that the confidentiality of the relevant information had not been communicated to her. The applicant also noted that the respondent bore the onus for the purposes of s 11A(1).
The applicant submitted that her past medical history was irrelevant as it had been disclosed. The occurrence of an injury was accepted.
The applicant submitted that the cause of her injury went beyond the two “disciplinary” meetings.
The applicant noted that she had complained of being bullied to Mr Fisher in 2022. The Australia Post issue made plain that the applicant felt she was being bullied. The tone of the email correspondence from Ms Phillips at the time of that incident suggested that the applicant’s perception of being bullied was well founded.
The applicant submitted that the quality of the evidence relied upon by the respondent was poor. The statements from Ms Phillips and Ms Gnaden were so brief that the Commission would not be satisfied that the respondent’s onus had been discharged.
The applicant had described a series of events giving rise to her psychological condition. The respondent’s witnesses gave no substantive evidence about many of those issues. There was no denial, for example, that Ms Phillips went through the applicant’s computer. No explanation was given as to why it was necessary to investigate the applicant’s computer in response to an allegation that the applicant had yelled at Ms Lechowitz. The applicant gave evidence that she felt like this was a fishing expedition in the circumstances. The applicant reported feeling isolated and humiliated in front of her colleagues and took time off work.
Ms Phillips confirmed in her statement that she did not hear the yelling. No outline was given of any other complaints said to have triggered the investigation. No information was given as to how the investigation was conducted or what was being investigated. The applicant was not given any notice that she was to be investigated. No detail was provided in the respondent’s witness statements to satisfy the Commission that the investigation was reasonable.
Following the parcel incident in December 2022, the applicant spoke to Mr Fisher and sent correspondence regarding her perception of being bullied. The tenor of Ms Phillips’ emails in connection with this issue was so out of line with what was occurring in the email chain that was not surprising the applicant felt she was being bullied. Mr Fisher confirmed that the applicant was upset and told him she was being bullied. The respondent’s submission that there was no evidence of bullying was not made out.
The applicant submitted that all the medical evidence confirmed that work events gave rise to the injury. Dr Modem did not break down which events were the predominant cause.
With regard to the price list incident, the applicant’s evidence was that the instructions given to her were vague and not comprehensive. The respondent’s witness evidence suggested that she should have been aware of the confidentiality surrounding the new brand because she was serving tea and coffee at meetings where this was discussed.
The applicant submitted that it was not reasonable for the applicant to be disciplined for preparing a document in accordance with instructions where she was not told the name of the brand was confidential. There was a lack of evidence as to what discussions took place and what instructions were given to the applicant. There was no evidence of explicit instruction or communication regarding confidentiality.
Ms Phillips’ own evidence of her interaction with the applicant after this incident was consistent with the applicant’s perception of bullying.
The applicant submitted that there were inconsistencies between Ms Gnaden’s contemporaneous account and her statement evidence as to how the applicant should have become aware that the brand was confidential.
Dr Kumagaya took a history of multiple workplace stressors. Dr Modem also recorded a background history of a variety of events. Although the applicant did not disclose workplace stressors to her doctor, she did complain to her employer that she was being bullied.
The applicant submitted that Dr Modem did not engage with the history provided, including the December 2022 bullying complaints. The applicant also complained of poor allocation of tasks, lack of praise, interference with her computer and other adverse interactions with
Ms Phillips, none of which constituted disciplinary action.
The applicant submitted that the events which caused her injury were not confined to disciplinary processes. The whole or predominant cause aspect of the s 11A(1) defence was not made out.
In relation to the final events in February 2023, there was a factual dispute regarding the instructions given which should be resolved in the applicant’s favour. In the circumstances, any disciplinary action was not reasonable.

The applicant submitted that the respondent failed to discharge its onus with respect to both reasonableness and the whole or predominant cause elements of the s 11A(1) defence.

Respondent’s submissions in reply

The respondent submitted that Dr Modem did have all of the factual evidence and distinguished between the various incidents in the history recorded.
It could not be said that Dr Modem bundled the evidence into one event.
Ms Phillips and Ms Gnaden responded to each of the allegations in their statements. The Commission would find that the injury was predominantly caused by the disciplinary action taken by the employer concerning the allegations made against the applicant’s behaviours in the workplace.
The applicant had no trouble over many years reporting psychiatric exacerbations to her doctor but nothing in the clinical notes during the relevant period suggested that incidents at work other than those on 7 February 2023 caused psychological symptoms warranting medical attention.
Although the applicant was critical of the detail in the statements of Ms Phillips and
Ms Gnaden, the respondent’s evidence was not confined to those statements. The Commission was referred to the detail in the contemporaneous employer records, including the formal letters inviting the applicant to disciplinary meetings and notifying her of a written warning. Those documents and the statements ought to be read together.
Dr Modem gave a medical opinion that disciplinary action was the whole or predominant cause of the injury. That opinion was given on the basis of a complete history and was consistent with the general practitioner’s note on 9 February 2023 and the cessation of work in the context of the February 2023 events.

FINDINGS AND REASONS

Section 9 of the 1987 Act provides that a worker who has received an ‘injury’ shall receive compensation from the worker’s employer in accordance with the Act. The term ‘injury’ is relevantly defined in s 4 as it applies to this case as:
“4 Definition of ‘injury’
In this Act:
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.”
“Psychological injury” is further defined in s 11A(3) of the 1987 Act:
“(3) A psychological injury is an injury (as defined in s 4) that is a psychological or psychiatric disorder. The term extends to include the physiological effect of such a disorder on the nervous system.”
A psychological injury which meets the statutory definitions will not be compensable if a defence pursuant to s 11(A)(1) of the 1987 Act is made out:
“(1) No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.”
Subsection 11(A)(1) is a disentitling provision and an employer who wishes to rely upon it carries the onus of establishing that defence.[3]
[3] Pirie v Franklins Ltd [2001] NSWCC 167; Department of Education and Training v Sinclair [2005] NSWCA 465.
In Hamad v Q Catering Ltd[4] (Hamad), Snell DP found that in many cases there will need to be medical evidence to establish that the employer’s action was the “whole or predominant cause” of the injury:
“The extent to which aspects of the appellant’s history contributed to causing the psychological injury was not, in the circumstances, something which could be decided in the absence of medical evidence. There may be cases in which causation of a psychological injury can be established without specific medical evidence, for example where there is a single instance of major psychological trauma, with no other competing factors. The need for medical evidence, dealing with the causation issue in s 11A(1) of the 1987 Act, will depend on the facts and circumstances of the individual case. In the current case, as in most, there are a number of potentially causative factors raised in the appellant’s statement and the medical histories. Proof of whether those factors, which potentially provide a defence under s 11A(1), were the whole or predominant cause of the psychological injury, required medical evidence on that topic. The extent of any causal contribution, from matters not constituting actions or proposed actions by the respondent with respect to discipline, could not be resolved on the basis of the Arbitrator’s common knowledge and experience.”
[4] [2017] NSWWCCPD 6.
The test of reasonableness is an objective one.[5] In Commissioner of Police v Minehan[6] Foster AJA (Sheller and Santow JJA agreeing) cited with approval a passage from an unreported decision of Geraghty J in Irwin v Director-General of School Education:[7]
“The question of reasonableness is one of fact, weighing all the relevant factors. The test is less demanding than the test of necessity, but more demanding than a test of convenience. The test of ‘reasonableness’ is objective, and must weigh the rights of employees against the objective of the employer. Whether an action is reasonable should be attended, in all the circumstances, by a question of fairness”.
[5] Jeffery v Lintipal Pty Ltd [2008] NSWCA 138.
[6] [2003] NSWCA 239.
[7] (unreported 18 June 1998).
In Heggie, Sackville AJA considered a number of authorities dealing with s 11A(1) and distilled the following propositions:
“The following propositions are consistent both with the statutory language and the authorities that have construed s 11A(1) of the WC Act:
(i)A broad view is to be taken of the expression ‘action with respect to discipline’. It is capable of extending to the entire process involved in disciplinary action, including the course of an investigation.
(ii)Nonetheless, for s 11A(1) to apply, the psychological injury must be wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer.
(iii)An employer bears the burden of proving that the action with respect to discipline was reasonable.
(iv)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.
(v)Where the psychological injury sustained by the worker is wholly or predominantly caused by action with respect to discipline taken by the employer, it is the reasonableness of that action that must be assessed. Thus, for example, if an employee is suspended on full pay and suspension causes the relevant psychological injury, it is the reasonableness of the suspension that must be assessed, not the reasonableness of other disciplinary action taken by the employer that is not causally related to the psychological injury.
(vi)The assessment of reasonableness should take into account the rights of the employee, but the extent to which these rights are to be given weight in a particular case depends on the circumstances.
(vii)If an Arbitrator does not apply a wrong test, his or her decision that an action with respect to discipline is or is not reasonable is one of fact.”
Both of the experts qualified in this case took a history of workplace events in 2022 and 2023, which was consistent with the applicant’s statement evidence. Both experts gave an opinion that those events were causative of a psychological injury. There is no dispute in this case that the applicant sustained a psychological injury pursuant to ss 4 and 11A(3) that would be compensable, subject to s 11A(1) of the 1987 Act.
Importantly, Dr Modem accepted that the relevant workplace incidents involved disciplinary action taken by the employer. Dr Modem reasoned that the onset of symptoms in August 2022 coincided with a disciplinary meeting and written warning. The other incidents involved lost parcels and the dissemination of confidential information. Dr Modem concluded that the injury was “wholly and predominantly caused by the employer's actions concerning the allegations made against Ms Preece's behaviours in the workplace.” Appropriately, no opinion was proffered as to the reasonableness of the employer’s actions.
The applicant argues that in reaching this opinion, Dr Modem failed to properly engage with the history.
The applicant described an initial exacerbation of symptoms following a sales conference in July 2022. The material before the Commission confirms that the applicant was the subject of a disciplinary investigation after the conference and subsequently received written notice of allegations and an invitation to attend a disciplinary meeting. The outcome of the disciplinary process was communicated to the applicant in mid August.
It is significant, however, that the applicant described an acute onset of symptoms when she discovered she was being investigated but not in response to the subsequent disciplinary actions. The applicant explained, and the respondent’s witnesses appear to confirm, that the applicant left work in a distraught state and then took two weeks off work after the interaction with Ms Phillips during which she was informed that an investigation was being conducted.
In particular, the applicant described feeling embarrassed and humiliated by Ms Phillips accessing her computer in an open plan office space, in view of her colleagues. The applicant described being shocked that she was being investigated and aggrieved by
Ms Phillips’ unwillingness to immediately disclose the reasons for the investigation or the allegations against her. The applicant claims that Ms Phillips shouted at her, “how dare you speak to me like that” when the applicant, in a state of shock, swore. The applicant said she felt isolated and humiliated by the suggestion that she should continue to work amongst her colleagues while waiting to find out what the allegations were. The applicant further described feeling unsupported by Ms Gnaden.
In response to this interaction, the applicant said she was distraught, crying uncontrollably and felt as though her world was collapsing. The applicant described suicidal thoughts and being unable to continue to work. Dr Kumagaya gave the opinion that the applicant was totally incapacitated for work for a period of approximately two weeks after this event.
In contrast, the applicant does not describe any particular psychological response to the letter dated 8 August 2022, the meeting on 16 August 2022 or the letter of the same date. It appears the applicant was able to respond to the allegations in writing. The applicant was described by the respondent’s witnesses as calm and in control during the meeting on
16 August 2022.
A careful analysis of the history, therefore, indicates that it was the manner in which the applicant’s computer was accessed and the investigation disclosed to her which were causative of psychological symptoms.
The applicant’s submissions were critical of the respondent’s evidence with regard to these matters. Ms Phillips’ evidence referred to the applicant’s co-workers hearing an altercation between the applicant and Ms Lechowitz at the conference. Little insight was given, however, into the unauthorised use of the work phone or the incident in which the applicant was alleged to have been doing her makeup in the bathroom instead of helping with the sales conference. Ms Phillips said she had “too many complaints” about the applicant’s behaviour but the respondent’s evidence did not explain what any other complaints entailed.
It is not made clear on the respondent’s evidence why accessing the applicant’s computer was considered a necessary or reasonable response to the complaints, although it does appear that some telephone logs were obtained. The circumstances in which the computer was accessed by Ms Phillips are also not explained. The applicant’s evidence suggests she had the impression was that her colleagues were aware that Ms Phillips had accessed the computer as part of an investigation into the applicant’s conduct. This is not disputed by Ms Phillips or Ms Gnaden and raises questions around whether the investigation was conducted in an appropriately discreet and confidential manner.
The applicant was critical of the manner in which the fact of an investigation was disclosed to her. Ms Phillips’ evidence suggested that the applicant was “clearly aware” of the complaints about her behaviour. The applicant describes, however, being taken by surprise by the revelation that she was being investigated.
The disclosure of the investigation appears to have occurred in a highly emotional interpersonal interaction. There is no evidence of the applicant being offered support, in the form of a support person or access to any employee assistance program, despite being visibly upset. There appears to have been an expectation that the applicant continue working without any understanding of the reason for the investigation in circumstances where her colleagues appeared to be aware she was being investigated. It is not apparent why the substance of the allegations could not be disclosed prior to the investigation commencing or at least during the meeting with Ms Phillips.
The applicant’s criticisms of the respondent’s evidence are apt. Whilst I would be prepared to accept that Ms Phillips accessing the applicant’s computer and her interaction with the applicant that followed constituted action with respect to discipline, I am not satisfied, on the evidence before me, that it was reasonable.
It is not suggested by either Dr Kumagaya or Dr Modem that the events in August 2022 were the whole or predominant cause of the applicant’s injury. Both doctors also took a history of the parcel incident in December 2022.
This incident is well documented in the contemporaneous email evidence. It is apparent that the applicant disclosed to two area managers that they were to receive a parcel in circumstances where the parcels contained a gift that was meant to be a surprise.
The applicant claims that she perceived Ms Phillips’ emails in response to the matter as hostile and bullying. The applicant said she began crying and all her fears came back. The applicant’s perception of bullying was explicitly raised in the emails from the applicant to
Ms Phillips.
Her psychological response was also confirmed in the evidence from Mr Fisher who described an interaction with the applicant shortly afterwards. Mr Fisher confirmed that the applicant was upset and that the applicant said she was being bullied by Ms Phillips.
The respondent’s evidence does not disclose that the applicant was the subject of any formal disciplinary action in connection with this incident. Ms Phillips’ emails to the applicant do, however, rebuke the applicant for her perceived “attitude”.
Ms Phillips’ evidence conveys her impression that the applicant failed to admit her mistake, sought to defend herself by portraying the matter as a joke and minimised her responsibility by inverting the timeline of events.
There may be some question as to whether the emails from Ms Phillips properly constituted disciplinary action. On the assumption that they did, I am not satisfied on an objective reading of the emails together with Ms Phillips’ evidence that such action was reasonable.
Ms Phillips’ email responses appear on their face disproportionately hostile in all the circumstances and in the context of the previous emails between the applicant and the managers in question. It appears that the applicant had not been told what was in the parcels or that they were a surprise. While the circumstance would have been understandably frustrating and disappointing to Ms Phillips, her comments that the matter was “not funny”, that she could “read perfectly fine” and that she would be talking to the applicant about her attitude appear on the face of the documents to be unnecessarily abrupt.
This exchange occurred in the context of the applicant’s perception of an already strained working relationship. After the August 2022 disciplinary proceedings, the applicant said
Ms Phillips avoided her as much as she could and would turn her back on her in group conversations. Ms Phillips gave the applicant dirty looks and her hatred towards the applicant was palpable. The applicant’s evidence in this regard is not contradicted by Ms Phillips and is covered in the histories recorded by the experts. To the extent that such matters were causative of the injury, I do not accept that they constituted action with respect to discipline.
The respondent’s oral submissions focused heavily on the February 2023 events. Temporally, I accept that these events coincided with the cessation of work and the claim for compensation. I am not satisfied, however, that these were the only events which were causative of the applicant’s injury.
The respondent correctly observed that the clinical notes made no mention of workplace stressors until February 2023. Although the note on 9 February 2023 referred to a performance management or disciplinary process, the note recorded a few days later on
14 February 2023, referred to a number of events and allegations of bullying and harassment. The notes made by Ms Bayliss also refer to the July and December 2022 events. Similarly, both experts appear to accept that it was the series of events described by the applicant, not simply those in February 2023, that was causative of the injury.
Turning to the February 2023 events, the witness evidence on both sides establishes that on 6 February 2023 the applicant sent an email attaching a document which disclosed a brand name in respect of which confidential negotiations were still taking place. Later that day, there was an interaction between the applicant and Ms Phillips in which Ms Phillips asked the applicant if she had removed the confidential brand name from the document. The applicant sought to explain that she was unaware that the brand was confidential to which Ms Phillips responded with words to the effect of "sure, it is always someone else’s fault”.
The applicant’s described being “disturbed” by Ms Phillips comment, but neither witness statement suggests that it produced a significant psychological response.
The following day, however, there was an interaction with Ms Gnaden about the same matter that lead to the cessation of work. In this interaction, it appears to have been put to the applicant that she should have been aware that the brand name was confidential. It was put to the applicant that she should be accountable for her error. During this interaction, the applicant claims that Ms Gnaden rolled her eyes at her and on at least one occasion shouted.
Ms Gnaden and Ms Phillips have given evidence that the applicant should have been aware that the information was confidential, either because “everybody was sort of aware that there was something going on that needed to be confidential”, or because the applicant was serving tea and coffee at meetings where the negotiations were discussed and had been told the meeting was confidential.

Ms Gnaden also said in her written statement, “we have spoken in my office about the sensitivity of the matter multiple times” but did not elaborate further on the timing or content of those conversations. Ms Gnaden’s evidence in this regard stands in contrast to the applicant’s denial to both her and Ms Phillips that anyone had told her the information was confidential. It is also somewhat difficult to reconcile with Ms Gnaden’s contemporaneous email in which she suggested that she could not discuss the matter with the applicant because it was confidential.
It is apparent from the evidence that a disciplinary process was commenced shortly after this interaction. A letter of the same date invited the applicant to a disciplinary meeting to discuss the allege breach of confidentiality and for exhibiting inappropriate and disrespectful behaviour in her interaction with Ms Gnaden. It does not appear, however, that the letter was in fact given to the applicant as she had already left the workplace distraught. This is confirmed by both the applicant’s evidence and the respondent’s witness evidence. The contemporaneous accounts indicate that the applicant was highly emotional during the interaction with Ms Gnaden.
I do not accept, in these circumstances, that the letter or the disciplinary action it proposed were causative of injury. I am not satisfied on the evidence before me that the applicant in fact received the letter. Furthermore, I find that she had already decompensated by the time it was drafted.
Only the interactions with Ms Phillips on 6 February 2023 and Ms Gnaden on
7 February 2023, if appropriately described as action with respect to discipline, could therefore have been causative of the injury. There is, however, no express medical opinion indicating that these interactions were the whole or predominant cause of the injury. As noted above, Dr Modem based his opinion on the history of multiple events described by the applicant.
The respondent’s submissions drew attention to the temporal coincidence of the interactions and the cessation of work. Reliance was also placed on the absence of reference to workplace issues in the clinical notes prior to 7 February 2023 and the reference in the first clinical note on 9 February 2023 to a disciplinary process at work.
While those factors lend support to the respondent’s submission, they must be weighed together with the evidence from Dr Modem, Dr Kumagaya and the other treating evidence suggesting that this event was but one in a series of events that caused the injury. I am not satisfied that the events on 6 and 7 February 2023 were in themselves the whole or predominant cause of the injury.
Given that I am not satisfied that the other workplace events constituted reasonable action with respect to discipline, the respondent’s defence fails with respect to the “whole or predominant cause”.
Were it necessary to decide, I would also not be satisfied on the balance of probabilities that the interactions with Ms Phillips and Ms Gnaden were “reasonable”. The evidence suggests that emotive language and tone was used on both sides during the interactions, probably as a reflection of the difficult past interactions between the protagonists. I am not satisfied that the applicant was or should have been aware that the information was confidential. While the applicant evidently made an error which could have had significant implications for the business, I am not satisfied on the evidence that the issue was raised with her in a reasonable and proportionate manner.
For the reasons given above, I am not satisfied that 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 discipline or any of the other categories of action in s 11A(1) of the 1987 Act.
The applicant’s injury is compensable.

Extent and quantification of incapacity

The remaining issue for determination is the extent of incapacity resulting from the injury during the period from 27 June 2023 to date and continuing.
Throughout this period, the applicant has obtained certificates of capacity certifying her as having no current work capacity as a result of the injury. Dr Kumagaya, in his report dated 29 June 2023, also gave the opinion that the applicant had no capacity to work in any occupation owing to her injury.
Dr Modem did suggest that, with appropriate treatment, the applicant might return to having capacity to engage in suitable employment within three months.
The statement evidence from the applicant dated 20 December 2023, also indicated that in September 2023, she undertook 24 hours of paid work distributing flyers. The applicant said she thought the work would encourage her to leave the house and go for walks but she discontinued it as it was only causing her mental health to deteriorate.
Neither Dr Modem’s speculation as to a possible future outcome, nor the applicant’s evidence regarding her brief period of employment, satisfy me that the certificates of capacity from the applicant’s nominated treating doctor should not be accepted.
For the purposes of cl 9 of Schedule 3 to the 1987 Act and the definition of “suitable employment” in s 32A of the 1987 Act, I am satisfied that, at all relevant times, the applicant has had an inability arising from the injury such that she was not able to return to work, either in her pre-injury employment or in suitable employment. The applicant has, at all relevant times, had “no current work capacity”.
Noting that the PIAWE rate is agreed between the parties and that more than 13 weeks of weekly compensation has been paid, there will be an award for weekly compensation pursuant to s 37(1) of the 1987 Act.

Medical expenses

In view of the findings above, and noting the parties’ agreement on the matter, there will also be an award of a general nature for the respondent to pay the applicant’s reasonably necessary medical and related treatment expenses in accordance with s 60 of the 1987 Act, upon production of accounts, receipts and/or Medicare Notice of Charge.

[2024] NSWPIC 95

29 February 2024