Rail Corporation NSW v Aravanopules
[2019] NSWWCCPD 65
•17 December 2019
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |
| CITATION: | Rail Corporation NSW v Aravanopules [2019] NSWWCCPD 65 |
| APPELLANT: | Rail Corporation NSW |
| RESPONDENT: | Aquiles Aravanopules |
| INSURER: | Transport for NSW |
| FILE NUMBER: | A1-909/19 |
| ARBITRATOR: | Mr J Harris |
| DATE OF ARBITRATOR’S DECISION: | 18 June 2019 |
| DATE OF APPEAL DECISION: | 17 December 2019 |
| SUBJECT MATTER OF DECISION: | Section 11A(1) of the Workers Compensation Act 1987 – reasonable action with respect to ‘discipline’; duty to afford procedural fairness |
| PRESIDENTIAL MEMBER: | Deputy President Michael Snell |
| HEARING: | On the papers |
| REPRESENTATION: | Appellant: |
| Mr G Barter, counsel | |
| Hicksons | |
| Respondent: | |
| Mr J Trainor, counsel | |
| Schreuders | |
| ORDERS MADE ON APPEAL: | 1. The Arbitrator’s decision dated 19 June 2019 is confirmed. |
INTRODUCTION, BACKGROUND AND ARBITRAL PROCEEDINGS
Aquiles Aravanopules (the respondent) came to Australia from his native Chile in 1996. He was employed by Rail Corporation NSW (the appellant) from 1999. He started with the respondent cleaning rail cars, and ultimately became a Security Monitoring Facility Supervisor in 2011. He supervised a team of eight people.[1]
[1] Respondent’s statement 28/4/16 (respondent’s statement), [3], [7], [21], [26], Application to Resolve a Dispute (ARD), pp 20–23.
On about 23 October 2015, Marilene Caranto and Heidi Caranto (two sisters who were in the respondent’s team) approached him and complained about harassment. They said the respondent had been following them to the toilet and touching them. The respondent said he had previously thought he “was good friends with these women” and was “hurt and shocked by these allegations”.[2] He stated that he sent a report of these matters to his direct report (Scott Franke) and another manager (Paul Linsley) and requested a meeting. The respondent met with Messrs Franke and Linsley on about 10 November 2015 and denied having acted inappropriately towards the women.[3] On 23 November 2015, a meeting was held involving the respondent, Marilene Caranto, Heidi Caranto, Mr Franke and Mr Linsley. The matter was referred to the “Workplace Conduct and Investigation Unit”. On 27 November 2015, the respondent was removed from his supervisory duties pending an investigation and was put to work in a different area.[4]
[2] Respondent’s statement, [32]–[35].
[3] Respondent’s statement, [39]–[40].
[4] Wendy Klaassen, Investigation Report (Klaassen report), Reply p 45, respondent’s statement [47].
The respondent came under the care of his general practitioner, Dr Rastogi, for psychological complaints from about 7 March 2016, and was off work from about 29 March 2016.[5]
[5] ARD, pp 33 and 159.
An investigation was conducted by Ms Wendy Klaassen. As part of that process interviews were conducted with Ms Marilene Caranto, Ms Heidi Caranto, and Ms Josephine Herry, who also had worked in the respondent’s team and complained that she had been touched. Four other members of the team were also interviewed, and Mr Franke provided some information.[6]
[6] Klaassen report, Reply, p 73.
Mr White, the Acting Principal Manager, Workplace Conduct and Investigations Unit at Transport for NSW, wrote to the respondent on 22 March 2016. The letter described allegations involving the three women who made complaints. It said “[w]e are unable to provide you with specific dates or times”. It said the respondent had “an opportunity to respond to the allegations in writing” within 14 calendar days, by email or post. It said the respondent’s response “may include your version of events, provide an explanation and/or outline any mitigating circumstances”. It said the investigation would continue if the respondent did not respond. It said “As part of the investigation process you may be interviewed. Should an interview be warranted you will be advised in writing.”[7]
[7] Reply, pp 122–127.
The respondent instructed a firm of solicitors, Messrs Stacks Champion, who responded on his behalf on 22 April 2016. The response stated inter alia “our client’s position is that these allegations generally are either wild exaggerations of essentially benign events, or else outright concoctions”.[8] Ms Klaassen’s Investigation Report was dated 16 May 2016. She concluded that she had found “each of the allegations substantiated” and that the respondent had breached sections 3, 4 and 12 of the Transport Code of Conduct.[9] The respondent was not interviewed. A “disciplinary penalty decision” was made that the respondent be dismissed, which was confirmed on review in a letter dated 3 November 2016.[10]
[8] Reply, pp 38–40.
[9] Reply, p 71.
[10] Reply, pp 169–170.
The appellant had commissioned a second investigation report from Procare, which was dated 17 May 2016.[11] A claim for compensation by the respondent was denied by the appellant in s 74 notices dated 24 October 2016 and 25 July 2018.[12] The basis of the denial included ‘injury’, and an alleged defence pursuant to s 11A(1) of the Workers Compensation Act 1987 (the 1987 Act). Proceedings were commenced by an Application to Resolve a Dispute registered on 26 February 2019 (the ARD).
[11] Procare report dated 17 May 2016 (the Procare report), Reply, pp 74–91.
[12] Reply, pp 92–99 and 114–120.
The proceedings were listed for arbitration hearing on 17 April 2019 and 14 May 2019. Mr Trainor appeared for the respondent and Mr Barter appeared for the appellant. The respondent no longer disputed the occurrence of psychological injury. It was agreed that the events which caused the psychological injury were the same events that were relied on by the appellant as giving rise to a defence pursuant to s 11A(1) of the 1987 Act.[13] The issue was described as “whether the [appellant’s] conduct was reasonable”.[14] There was no oral evidence. Counsel for the parties made submissions and the Arbitrator reserved his decision.
[13] Transcript of arbitration hearing on 17 April 2019 (T1), 1.33–3.33.
[14] T1 3.33–4.3.
The Commission issued a Certificate of Determination dated 18 June 2019. The Arbitrator found the appellant’s defence was not made out. The Arbitrator entered an award for weekly payments from 4 November 2016 to 1 June 2018, made a general order for the payment of expenses pursuant to s 60 of the 1987 Act, and referred the claim for lump sum compensation to an Approved Medical Specialist to assess whole person impairment in respect of psychological injury. The Certificate was accompanied by 35 pages of reasons.[15]
[15] Aravanopules v Sydney Trains [2019] NSWWCC 211 (reasons).
THE ARBITRATOR’S REASONS
The Arbitrator noted the issues were whether the appellant’s actions were ‘reasonable’ within the meaning of s 11A of the 1987 Act, and the extent of the respondent’s work capacity in assessing the weekly entitlement. The weekly claim was limited to a period from 4 November 2016 to 1 June 2018.[16]
[16] Reasons, [8]–[12].
The Klaassen report stated that it had multiple attachments.[17] The respondent objected to the appellant’s reliance on the report, as the statements were not attached to it. The Arbitrator noted that this difficulty was previously raised by a different Arbitrator at a telephone conference, yet the appellant “failed to tender the attachments and maintained that stance during the hearing”. The report was admitted “subject to weight”.[18]
[17] Reply, p 73.
[18] Reasons, [17]–[18].
The Arbitrator summarised the respondent’s evidence at some length.[19] He noted the respondent’s statement in which he said that he had asked “my managers, HR and even the investigation unit about the status of it and about when I will have an opportunity to say my part”.[20]
[19] Reasons, [19]–[42].
[20] Reasons, [41].
The Arbitrator referred to the letter to the respondent dated 22 March 2016 (see [5] above) which was described as the “formal Notification of Misconduct”. The Arbitrator summarised the content of the letter and noted the letter “does not attach the statements”.[21] The Arbitrator summarised the response from the respondent’s solicitors dated 22 April 2016 (see [6] above).[22] The Arbitrator briefly summarised the Klaassen report. The Arbitrator observed that the report referred to “a number of attachments including initial statements from two of the complainants given in December 2015, email correspondence including the [respondent’s] initial response and transcript record of interviews with seven employees (including the three complainants)”. The Arbitrator noted that “[n]one of the attachments, apart from the Code of Conduct and the response from the [respondent’s] solicitor, is in evidence”. The Arbitrator referred to the analysis in the Klaassen report, including “that the investigator found that the complainants appeared ‘credible’”. He noted that all of the allegations were found to be “substantiated”.[23] The Arbitrator noted the appellant had apparently adopted the Klaassen report, although the steps taken in terminating the respondent’s employment were not in evidence.[24]
[21] Reasons, [43]–[53].
[22] Reasons, [54]–[63].
[23] Reasons, [64]–[72].
[24] Reasons, [73]–[74].
The Arbitrator referred to the Procare report, noting it was common ground this was undertaken on behalf of the workers compensation insurer. He summarised its contents. He noted that some of the attachments (the Grievance Procedure, the Disciplinary Procedure, Mr Franke’s email dated 15 December 2015, and a letter to the respondent from Human Resources in December 2015) were missing, and some were incomplete (part of Mr Franke’s statement).
The Arbitrator summarised the submissions at some length; I shall not repeat the summary here. Points raised by the respondent included:
(a) The test of reasonableness was objective. Blemishes did not necessarily make the process overall unreasonable. The appellant carried the onus of establishing the defence. The appellant was required to provide procedural fairness (referring to Kioa v West[25]).[26]
(b) A series of documents and interviews were missing from the Klaassen report. The essential foundation of the document was not before the Commission. The appellant could not establish that the document’s conclusions were arrived at in a reasonable fashion in the absence of the source documents. The respondent was not given the statements and evidence from witnesses. The statements were not enclosed with the s 74 notices. The absence of the statements was raised with the appellant at the telephone conference in the matter, yet it chose not to tender the statements.[27] The appellant made a conscious effort not to attach the material, and an inference pursuant to Jones v Dunkel[28] should be drawn. The statements would not have assisted the appellant.
(c) It was procedurally unfair to expect the respondent to traverse the allegations against him without the source material.[29]
(d) The appellant had not placed its grievance procedures and disciplinary procedures before the Arbitrator. It cannot be known whether the appellant complied with these. This would be a relevant factor, although not determinative.[30]
(e) The respondent was described as producing a “long and meandering” letter that did not really grapple with the issues,[31] in response to the allegations in the letter dated 22 March 2016 (see [5] above) I take this to be a reference to the respondent’s letter dated 13 April 2016.[32]
(f) Ms Klaassen found that every allegation was proved against the respondent. She relied in part on the respondent’s denials lacking credibility, and on credibility findings in favour of the complainants. The respondent was not interviewed. It was submitted to be unfair to impugn the respondent’s credit, when he had not seen the statements, and had not had an opportunity to explain his situation and to question witnesses.[33]
(g) There was a “jurisdictional type of argument” raised in the letter from the respondent’s solicitors, not addressed by Ms Klaassen. Some of the events, such as unfriending someone on Facebook, occurred outside the workplace.[34]
(h) The evidence did not suggest the respondent was given a right to be heard on penalty after Ms Klaassen’s decision. The respondent accepted he was given a right to seek a review of the penalty (dismissal).[35]
(i) There was “inordinate delay” in the investigation, between notification of the formal process on 18 December 2015 and 22 March 2016, when formal particulars of the allegations were made. This was contrasted with the respondent being given 14 days to respond. The respondent was not kept up to date with information about the progress of the investigation, this was also unreasonable.
[25] [1985] HCA 81; 159 CLR 550 (Kioa).
[26] Reasons, [101] (g), (h), (i), (k).
[27] Reasons, [101](m)–(r).
[28] [1959] HCA 8; 101 CLR 298 (Jones v Dunkel).
[29] Reasons, [101](t).
[30] Reasons, [101](v).
[31] Reasons, [101](ee).
[32] Reply, pp 27–35.
[33] Reasons, [101] (jj)–(mm).
[34] Reasons, [101] (oo).
[35] Reasons, [101](pp)–(rr).
Points raised by the appellant included:
(a) The appellant had an obligation to all employees to maintain a safe workplace, which included working without fear of harassment or bullying, particularly of a sexual nature. As a manager, the respondent was aware of his various obligations, including those under the Code of Conduct. It was reasonable for the appellant to enforce its policies.[36]
(b) Although the respondent “may not have received the statements” he received the Klaassen report, although “we do not know when”.[37]
(c) The allegations in the letter dated 22 March 2016 were “specific in detail”, the respondent knew exactly what was alleged and was given an opportunity to respond. This was what was required of the appellant. The question for the Commission was whether the appellant behaved reasonably. Sufficient opportunity to properly respond did not necessarily mean providing the statements.[38]
(d) The appellant conceded the respondent may not have received the Klaassen report in time to respond to it.[39] The appellant conceded there was no evidence the respondent had seen the attachments.[40]
(e) Some of the missing documents the respondent had equal access to.[41]
(f) The respondent wrote a lengthy letter to the workers compensation unit dated 13 April 2016 (see [15(e)] above), and made a signed statement dated 28 April 2016 (executed 12 May 2016), which was attached to the Procare report. The appellant was not required to interview the respondent and provide him with evidence as part of the investigation process. Provision of the letter dated 22 March 2016 was sufficient to afford the respondent procedural fairness.[42]
(g) It was not the Commission’s task to determine whether the respondent was guilty of the allegations (the respondent agreed with this submission).[43]
[36] Reasons, [102](a)–(f).
[37] Reasons, [103](a).
[38] Reasons, [103](b)–(d).
[39] Reasons, [103](f). See T2 75.24–27.
[40] Reasons, [103](i). See T2 77.33–78.1.
[41] Reasons, [103](h).
[42] Reasons, [103](l)–(n).
[43] Reasons, [103](s).
The Arbitrator briefly summarised submissions made by the respondent in reply:
(a) It was reiterated that the respondent was “not heard”. One cannot determine the overall reasonableness of the process, in the absence of the evidence of the witnesses. The Klaassen report suggested divergences between the witnesses. There was a “real issue” regarding the respondent’s intention, and a “divergence in the evidence as to the nature and the context of the touching”.[44]
(b) It was impossible to comment on the appropriateness of the penalty, given a 15‑year unblemished work record, in the absence of the statements.
[44] Reasons, [104]–[105].
The Arbitrator noted the appellant carried the onus of establishing the defence pursuant to s 11A. The Arbitrator referred to the following statement of principle from a decision of Geraghty J in Irwin v Director-General of School Education,[45] cited with approval in Commissioner of Police v Minahan:
“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.”[46]
[45] Geraghty J, 18/6/98, unreported (Irwin).
[46] [2003] NSWCA 239 (Minahan).
The Arbitrator observed that Minahan was approved in Northern NSW Local Health Network v Heggie.[47] He quoted the summary of the principles relating to s 11A that is set out in Heggie.[48]
[47] [2013] NSWCA 255; 12 DDCR 95 (Heggie).
[48] Heggie, [59]. See Reasons, [111]–[112].
The Arbitrator noted that the process in the current matter stretched from the time of the initial allegations (October 2015) to the respondent’s termination (November 2016). He referred to Department of Education & Training v Sinclair where, Spigelman CJ said:
“In my opinion, a course of conduct may still be ‘reasonable action’, even if particular steps are not. If the ‘whole or predominant cause’ was the entirety of the disciplinary process, as much of the evidence suggested and his Honour appeared to assume, his Honour did not determine whether the whole process was, notwithstanding the blemishes, ‘reasonable action’.”[49]
[49] [2005] NSWCA 465 (Sinclair), [97].
The Arbitrator made a factual finding that “most if not all of the statements were obtained by the investigator prior to 22 March 2016”. He based this on the specific nature of the details set out in the letter dated 22 March 2016, the respondent’s statement in May 2016 that all of his team members had been interviewed, the fact that the initial two complainants gave statements on 10 and 14 December 2015, and the statement in the Klaassen report that the notification (on 22 March 2016) was described as “following a series of fact-finding interviews”. The Arbitrator described the delay from December 2015 to March 2016 as “unfortunate but reasonable in the circumstances”. He said there was “no other submission … pertaining to the other periods suggesting that there was undue delay”.[50]
[50] Reasons, [116]–[121].
The Arbitrator referred to a submission by the respondent that he was “not kept up to date with what was happening during this period”. He described this as “very minor and insignificant in the overall process”.[51]
[51] Reasons, [122].
The respondent “submitted that his transfer in late November 2015 was unreasonable”. The Arbitrator said that “[g]iven the nature of the allegations, the [appellant] was clearly entitled to take the action it did whilst the matter was being investigated”. The Arbitrator described this action as “reasonable” and “necessary”. He referred to Heggie at [62], and said it was “not articulated by the [respondent] as to how the appellant’s actions in transferring him were unreasonable. He said “the obligations of the employer with respect to potential employee safety far outweighed the [respondent’s] interests”. He concluded the action of transferring the respondent was reasonable.[52]
[52] Reasons, [123]–[131].
The Arbitrator then dealt with the appellant’s failure to provide the statement evidence, and other processes within the investigation. The appellant submitted that it was under no legal requirement to provide the material. It submitted procedural fairness was satisfied if it provided sufficient evidence for the respondent to know the case he had to meet, and to have an opportunity to do so.[53] The appellant put on short written submissions before the Arbitrator, with leave, relying on Pilbara Aboriginal Land Council Aboriginal Corp Inc v Minister for Aboriginal & Torres Strait Islander Affairs.[54]
[53] Reasons, [133]–[135].
[54] [2000] FCA 1113; 103 FCR 539; 175 ALR 706 (Pilbara Land Council), particularly at [70].
The respondent’s written submissions to the Arbitrator on this point said that the appellant’s reliance on this decision was misconceived, it went to “the non-obligation of a decision maker to advise a party of its preliminary views”. The appellant submitted that, as a general proposition, “the duty of disclosure required a decision maker to disclose the evidence that it proposed to be used”. It submitted that, by the time of the letter dated 22 March 2016, “[a]t least some if not all of the witness statements were in the [appellant’s] possession”, the “allegations were serious and the proposed sanctions severe”. The respondent “was never provided with an opportunity to question and test the witnesses”. The respondent submitted the non-disclosure resulted in a denial of procedural fairness.[55]
[55] Reasons, [136]–[139].
The Arbitrator accepted the respondent’s submission that Pilbara Land Council was not on point.[56] The respondent, in submitting the appellant should have made the evidence available, referred to a passage from Aronson et al, Judicial Review of Administrative Action and Government Liability,[57] which cited Brighton Council v Compost Tasmania Pty Ltd.[58] The Arbitrator said the reasoning in Brighton Council partly turned on the statute which was being applied in that case, and he did not find it “compelling” in the circumstances of the current matter.
[56] Reasons, [142]–[146].
[57] Aronson et al, Judicial Review of Administrative Action and Government Liability, 6th ed. (Aronson) [8.180], p 542.
[58] (2000) 109 LGERA 190 (Brighton Council), 198–199.
The Arbitrator referred to a decision of Truss J in Ivanisevic v Laudet Pty Ltd,[59] in which her Honour, dealing with s 11A, said:
“In my view when considering the concept of reasonable action, the Court is required to have regard not only to the end result but to the manner in which it was effected.”
[59] NSWCC, Truss J, 24.11.98 (unreported).
The Arbitrator said it was not in dispute that the appellant was required to afford the respondent natural justice. He said that “[w]here that obligation extended in the present case was one of the critical matters”. The Arbitrator said the parties’ rights must be analysed in the context of the statute, and the correct test to apply was that in Heggie.[60]
[60] Reasons, [151]–[153].
The Arbitrator quoted from the reasons of Mason J (as his Honour then was) in Kioa. He noted his Honour’s reference to a “flexible obligation to adopt fair procedures” and said there may be circumstances where it was appropriate to withhold some or all of the witness statements from an employee. Safety or privacy reasons may arise for example.[61] The Arbitrator said that in the circumstances of the current matter, the statements should have been provided to the respondent before a decision was made on the substantive allegations. He gave the following reasons for this view:
“(a) The [respondent] received (at some point) a summary of portions of the statements in the Investigation Report which formed adverse views of the [respondent];
(b) The Investigation Report states that the statements were attached;
(c) The [respondent] had no means to examine inconsistencies in the complainant’s evidence or contrast these with the evidence from the other employees;
(d) References to portions of the statements in the Investigation Report indicate that the examination of witnesses went to many pages. Clearly large portions of the statements were not disclosed to the [respondent];
(e) There was no reason proffered by the [appellant] at any time, as to why the statements were withheld. The only reason proffered at the hearing was that they did not have to disclose the statements, and
(f) As submitted by the [respondent] and I agree, ‘the allegations were serious and the proposed sanctions severe’.”[62]
[61] Reasons, [154]–[157].
[62] Reasons, [160]–[161].
The Arbitrator noted the respondent did not have a right to question the witnesses.[63]
[63] Reasons, [162].
The Arbitrator then moved to the failure by the relevant investigator to interview the respondent. The Klaassen report found the evidence of the complaints “credible”. The respondent argued it was unfair, that the complainants and other witnesses gave oral evidence to the investigator, whose assessment of credibility was based in part on demeanour. The respondent was only provided with an opportunity to provide a written statement. The Arbitrator rejected a submission by the appellant that the respondent’s statement dated 12 May 2016 was an opportunity to respond to the allegations. That statement was attached to the Procare report investigating the workers compensation claim. It was not referred to in the Klaassen report, indicating the investigator did not have it. The Arbitrator accepted there was “unfairness” in how the conclusions were reached in the Klaassen report, partly based on demeanour when the respondent was given no such opportunity. The Arbitrator described this as a “blemish” of the entire process, although said he did not accept that it “tainted the entire action”.[64]
[64] Reasons, [167]–[170].
The Arbitrator dealt with “missing documents”, particularly from the time of the preparation of the Klaassen report until the time of the decision to deny the respondent’s appeal against his termination. There was also the absence of the appellant’s grievance policy and disciplinary policy. The appellant provided no explanation for the absence of this material, beyond saying it “did not have to provide various documents”. The Arbitrator said that from the completion of the Klaassen report, until the decision to terminate the respondent’s employment was upheld, he could infer that:
“(a) The Klaassen report was provided at some point in time to the [appellant];
(b) The [appellant] terminated the [respondent’s] employment effective 26 August 2016 as a subsequent document states that this occurred;
(c) The [respondent] sought a review of that decision on 3 September 2016, and
(d) The [appellant] confirmed the decision to terminate the [respondent’s] employment on 26 October 2016.”
The Arbitrator said there was little else that could be inferred, and the appellant’s counsel had conceded that the respondent “may not have had the Investigation Report with sufficient time to respond to the allegations”.[65]
[65] Reasons, [171]–[175].
The Arbitrator quoted from a Presidential decision of State of New South Wales v Stokes,[66] in which an employer, running a s 11A defence, failed to adduce evidence relating to the frequency of, and reasons for, false positives in drug tests involving urine analysis at a hospital conducted by the employer. The worker was disciplined due to such a false positive. The consequences for the worker were serious. Roche DP upheld an arbitral decision that the employer had failed to discharge its onus of establishing its actions were reasonable, in the absence of it putting on appropriate evidence about the testing process.[67]
[66] [2014] NSWWCCPD 78 (Stokes).
[67] Reasons, [176]–[177].
The Arbitrator said that the appellant had asked him to infer the appellant had complied with correct processes when it terminated the respondent’s employment. The Arbitrator said that he was reluctant to make such a finding, when the appellant failed to adduce evidence in its possession going to such matters. He referred to the “unsatisfactory state of the evidence”, in that a s 74 notice referred to the appellant’s “Disciplinary Procedure”, yet no such document was before him. The Arbitrator said the fact that some material was also in the respondent’s possession did not detract from the fact that he did not know what occurred during the period referred to at [32] above.[68] He said:
“I will not infer and find that the [appellant] complied with its unknown disciplinary procedures in the absence of evidence it did not adduce and in the absence of a clear explanation as to why these documents are not before me.”[69]
[68] Reasons, [178]–[183].
[69] Reasons, [184].
The Arbitrator said the respondent was entitled to procedural fairness with respect to both whether the charges were satisfied and penalty. In the absence of evidence, the appellant failed to discharge its onus of proof, in establishing what occurred during the period following the Klaassen report until the first notification that the respondent was terminated.
The Arbitrator noted the absence of statements was raised, before a different arbitrator, at an early stage of the proceedings. The appellant was not caught by surprise. The Arbitrator concluded the appellant had made “an intentional decision to withhold the statements from examination before the Commission”. No explanation was given.[70] The Arbitrator accepted a submission by the respondent, that he could not determine the reasonableness of the appellant’s actions, in finding the charges substantiated and proceeding to termination, in the absence of the source material.[71]
[70] Reasons, [185]–[190].
[71] Reasons, [191]–[195].
The Arbitrator described the question before him as “whether I am satisfied, on the evidence as presented before the Commission, that the [appellant’s] actions with respect to the entire disciplinary process, were reasonable.”[72] He concluded:
“201. In the absence of critical evidence including the statements and what occurred following the provision of the Investigation Report until the [respondent’s] initial termination, I am not satisfied that the [appellant] has discharged the burden of proof in establishing whether the entirety of its action with respect to discipline was reasonable. I also do not know, although this is not determinative, if the [appellant] complied with its own policies.
202. In reaching this conclusion I specifically take into account that the [appellant] chose to withhold the statements from the [respondent] so that he was deprived of a legitimate opportunity to make submissions on both the Allegations and any penalty, both during the disciplinary process and before the Commission.”[73]
[72] Reasons, [200].
[73] Reasons, [201]–[202].
The Arbitrator then made findings relevant to quantification of the weekly entitlement. These matters are not the subject of challenge on this appeal.
ON THE PAPERS
Section 354(6) of the 1998 Act provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Nos 1 and 6; the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.
THRESHOLD MATTERS
There is no dispute between the parties that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the 1998 Act have been met.
GROUNDS OF APPEAL
The appellant raises the following grounds of appeal:
(a) The Arbitrator’s decision was affected by an error of law in the application of s 11A of the 1987 Act. (Ground No. 1)
(b) The Arbitrator’s decision was affected by a mixed error of fact and law in the conclusion that the appellant employer had failed to “discharge the burden of proof in establishing whether the entirety of its action with respect to discipline was reasonable”. (Ground No. 2)
(c) The Arbitrator’s decision was affected by an error of fact in that the evidence does not support his conclusion that “the [appellant] chose to withhold the statements from the [respondent] so that he was deprived of a legitimate opportunity to make submissions on both the allegations and penalty”. (Ground No. 3)
(d) The Arbitrator’s decision was affected by a mixed error of fact and law in concluding, by inference, that the worker’s psychiatric condition arose wholly or predominantly from the employer’s failure to provide source material to the worker or interview the worker. (Ground No. 4)
THE NATURE OF AN APPEAL PURSUANT TO SECTION 352(5)
Section 352(5) of the 1998 Act, pursuant to which this appeal is brought, provides:
“An appeal under this section is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of any such error. The appeal is not a review or new hearing.”
In Raulston v Toll Pty Ltd,[74] Roche DP applied Whiteley Muir & Zwanenberg Ltd v Kerr[75] (cited with approval by Brennan CJ, Toohey, McHugh, Gummow and Kirby JJ in Zuvela v Cosmarnan Concrete Pty Ltd[76]) to the nature of the appeal process pursuant to s 352 of the 1998 Act:
“(a) An Arbitrator, though not basing his or her findings on credit, may have preferred one view of the primary facts to another as being more probable. Such a finding may only be disturbed by a Presidential member if ‘other probabilities so outweigh that chosen by the [Arbitrator] that it can be said that his [or her] conclusion was wrong’.
(b) Having found the primary facts, the Arbitrator may draw a particular inference from them. Even here the ‘fact of the [Arbitrator’s] decision must be displaced’. It is not enough that the Presidential member would have drawn a different inference. It must be shown that the Arbitrator was wrong.
(c) It may be shown that an Arbitrator was wrong ‘by showing that material facts have been overlooked, or given undue or too little weight in deciding the inference to be drawn: or the available inference in the opposite sense to that chosen by the [Arbitrator] is so preponderant in the opinion of the appellate court that the [Arbitrator’s] decision is wrong’.”[77]
[74] [2011] NSWWCCPD 25; 10 DDCR 156 (Raulston).
[75] (1966) 39 ALJR 505, 506.
[76] [1996] HCA 140; 140 ALR 227.
[77] Raulston, [19].
In Davis v Ryco Hydraulics Pty Ltd Keating P observed that these principles “have been consistently applied in the Commission”.[78] The Deputy President in Raulston also cited the following passage from Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd:[79]
“… in that process of considering the facts for itself and giving weight to the views of, and advantages held by, the trial judge, if a choice arises between conclusions equally open and finely balanced and where there is, or can be, no preponderance of view, the conclusion of error is not necessarily arrived at merely because of a preference of view of the appeal court for some fact or facts contrary to the view reached by the trial judge.”[80]
[78] [2017] NSWWCCPD 5, [67].
[79] [2001] FCA 1833, [28].
[80] Raulston, [20].
In Heggie Sackville AJA said:
“A fortiori, if a statutory right of appeal requires a demonstration that the decision appealed against was affected by error, the appellate tribunal is not entitled to interfere with the decision on the ground that it thinks that a different outcome is preferable: see Norbis v Norbis [1986] HCA 17; 161 CLR 513, at 518-519”.[81]
[81] Heggie, [72].
LEGISLATION
Section 11A(1) of the 1987 Act provides:
“(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.”
GROUND NO. 1
Ground No. 1 is expressed in very general terms. It is illuminated by the submissions.
Appellant’s submissions
The appellant accepts that the test governing its alleged defence pursuant to s 11A is that described by the Arbitrator in the reasons at [111] to [115].[82]
[82] Appellant’s submissions, [2.9(1)].
The Arbitrator referred to a passage from Irwin, approved in Minahan (see [18] above). The appellant submits the Arbitrator failed to give adequate weight to the objectives of the employer as against the rights of the employee, “when the safety of other employees was at risk”.[83] It submits that the passage from Irwin equates “reasonableness” with “fairness”, which the appellant accepts. “It follows that the principle of natural justice, or procedural fairness, known as ‘the hearing rule’ must be followed.”[84]
[83] Appellant’s submissions, [2.9(2)].
[84] Appellant’s submissions, [2.9(3)].
The appellant refers to SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs, in which the following passage from Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd[85] is quoted with approval:
“Where the exercise of a statutory power attracts the requirement for procedural fairness, a person likely to be affected by the decision is entitled to put information and submissions to the decision-maker in support of an outcome that supports his or her interests. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. Subject to these qualifications however, a decision-maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision in question.”[86] (emphasis in original)
[85] [1994] FCA 1074; 49 FCR 576 (Alphaone), 590–591.
[86] SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; 228 CLR 152; 231 ALR 592; 81 ALJR 515 (SZBEL), [29] referred to in appellant’s submissions, [2.9(5)].
The appellant refers to a text (Control of Government Action) as supporting the following “3 minimum requirements” based on the decision in Alphaone:
“• Prior notice that a decision will be made;
· Disclosure of an outline or the substance of the information on which the decision is proposed to be based …; and
· An opportunity to comment on that information, and to present the individual’s own case.”[87]
[87] Creyke & McMillan, Control of Government Action: text, cases and commentary (2005) (Creyke & McMillan), referred to in Appellant’s submissions, [2.9(6)].
The appellant submits the respondent was aware of the allegations being made by his co-workers through gossip, a meeting with the appellant’s representatives, a mediation, the letter dated 22 March 2016 and the ultimate provision of the investigation report. It is submitted the respondent took advantage of the opportunities to respond by attending the mediation, sending his letter dated 13 April 2016 and through his solicitors’ letter dated 22 April 2016.
Respondent’s submissions
The respondent submits the appellant approached the issue in the case simply as a contest regarding whether its actions were reasonable. The respondent submits this is incorrect; the respondent argued the appellant bore the onus of establishing the s 11A defence and failed to prove it. The matters raised by the respondent went to things other than the disclosure of witness statements in an investigation process. These included not being heard as to both guilt and penalty, not being allowed to question witnesses and having an adverse finding made as to his demeanour when he was never interviewed.[88]
[88] Respondent’s submissions, [2].
The respondent submits the appellant’s identification of its objective as “the safety of other employees” is capable of being misleading. It submits this could not mean that a decision by the appellant to withhold witness statements while undertaking the disciplinary action on the basis that fear of disclosure could potentially imperil witnesses. Such an argument was not made before the Arbitrator and was inconsistent with the appellant’s submissions at first instance, summarised in the reasons at [102]. There is no evidence to support such an allegation. It would be a serious allegation and is not expressly made. The appellant could thus only be referring to the general common law duty to take reasonable steps to provide a safe place of work. This non-specific duty would be insufficient to displace the Arbitrator’s finding that the respondent was denied procedural fairness.[89]
[89] Respondent’s submissions, [5].
The respondent submits the appellant’s statement of the hearing rule is wrong in law. The respondent refers to Aronson, in which it is said that the content of the hearing rule depends on the factual circumstances of each case, and “can vary greatly”, referring to authorities that include Russell v Duke of Norfolk,[90] Kioa[91] and SZBEL.[92] The respondent submits that there is nothing in the appellant’s submissions that suggests the Arbitrator’s analysis of the hearing rule in the reasons at [133] to [161] was wrong.[93]
[90] [1949] 1 All ER 109, 118.
[91] Kioa, 613–615.
[92] SZBEL, 160–161.
[93] Respondent’s submissions, [7].
The respondent refers to the appellant’s reliance on the First edition of Creyke & McMillan. The respondent submits the most recent Fifth edition of that text indicates that a higher level of disclosure is required when a person’s livelihood is at stake. The respondent submits that this text, if anything, supports disclosure of the statements.[94]
[94] Respondent’s submissions, [8].
The respondent submits the appellant’s submission, that disclosure was required of only the relevant matters, as opposed to the evidence, is inconsistent with Saeed v Minister for Immigration and Citizenship, in which the High Court said:
“Brennan J in Kioa v West said that, in the ordinary case, an opportunity should be given to a person affected by a decision to deal with any adverse information that is ‘credible, relevant and significant’. That approach has more recently been confirmed in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs. Mason J in Kioa v West went further. In his Honour’s view the common law would require the decision-maker to bring the critical issue or factor on which the decision was likely to turn to the attention of the person. Brennan J’s approach would not deny that this may be necessary in a particular case.”[95]
[95] [2010] HCA 23; 241 CLR 252 (Saeed), [19].
The respondent submits that, for the appellant’s argument to prevail, it would be necessary on appeal that the Arbitrator’s findings at [140] and [161] of the reasons be set aside. (I note this submission involves a misreading of the reasons, to the extent that [140] forms part of a summary of the respondent’s submissions at first instance, rather than a finding by the Arbitrator.) Paragraph [161] contains the Arbitrator’s conclusion that the statements should have been provided to the respondent (see [29] above). The respondent submits the fact that he, the respondent, replied to the letter dated 22 March 2016 does not involve acceptance by him that the appellant had complied sufficiently with the hearing rule. Silence could have been construed by the investigator as guilt. The respondent submits the nature of the response to the letter dated 22 March 2016, only offering denials, is consistent with his having been hampered by the appellant’s failure to comply with the hearing rule.[96]
Consideration
[96] Respondent’s submissions, [9]–[10].
The possibility that the safety of witnesses was a factor in not providing statements
At the outset it is appropriate to deal with the respondent’s point that, where the appellant refers to the safety of its employees as an objective of the employer, there is the potential to take this as a submission that such safety could have been compromised by revealing the statements to the respondent. This was not the basis on which the case was presented. Early in the running of the arbitration hearing there was discussion of s 11A and the test in Irwin, in which the appellant submitted to the Arbitrator:
“MR BARTER: The relevant test is the balance of – well, it is the – it’s the balancing of the rights and obligations of the employer and the employee. The employer has an obligation to protect all his – all his or her workers. An employee has an obligation to carry out the duties, given to him or her by the employer, having regard to the standard operating procedures of the employment, and any – and any rules, regulations, doctrines applicable to that employment.”[97]
[97] T1 17.10–18.
Dealing with the employee’s obligation, the appellant submitted:
“MR BARTER: An obligation of the employee is to – is to assist the employer to carry out his objectives, and one of the objectives of an – there is a very significant matter of principle associated and brought to life by this case, and that is that the employer, particularly a large employer such as this, has an obligation to all his employees, not just Mr Aravanopules, he has got an – the employer has got an obligation to maintain a safe workplace. And by a safe workplace, that is a place where any employer [sic, employee] can turn up at work without fear of harassment or bullying, particularly of a sexual nature and particularly in this day and age, where it’s – where that is a well-known obligation on the employer, and importantly, a well-known obligation on the employees to participate – indeed, enhance – the safety of the workplace.”[98]
[98] T1 19.19–34.
The approach which the appellant submitted should be taken by the Arbitrator in relation to the statements was outlined in the following exchange:
“ARBITRATOR: Okay. But I want an answer from you, a direct response. Are you saying that you weren’t obliged to give the applicant statements before - the statement evidence behind the allegations?
MR BARTER: Correct. All we have to do is - - -
ARBITRATOR: What about before they make a determination, okay, in response or what about before they made a determination as to guilt or innocence?
MR BARTER: That would be relevant to - the answer is still no. The answer is that the applicant has to have been made - be given sufficient opportunity to properly respond to the allegations that’s been made against him and that doesn’t necessarily mean providing the statements.”[99]
[99] Transcript of arbitration hearing on 14 May 2019 (T2), 71.11–27.
The appellant did not, before the Arbitrator, rely on an assertion that the safety of the witnesses could have been compromised if the statements were provided. The appellant’s position was simply that procedural fairness did not require that it make the statements available.
The application of procedural fairness in the circumstances
The parties did not, in their submissions, deal with the specific statutory powers that were being exercised. The appellant put into evidence the Code of Conduct that governed Sydney Trains.[100] There was some debate at the arbitration hearing regarding whether that form of the Code had application at the time of its alleged breach by the respondent.[101] Ultimately, the respondent accepted the form of the Code attached to the Reply was “relevant for the purpose of these proceedings”. The respondent also conceded that he was aware of the Code at all relevant times. [102]
[100] Reply, pp 129–156.
[101] T1 24.6–26.18.
[102] T2 5.34–6.31.
In Sanders v Snell the plurality said:
“…it has long been held that the repository of statutory power should afford procedural fairness to those whose livelihood is affected by the exercise of that statutory power”.[103]
[103] [1998] HCA 64; 196 CLR 329; 157 ALR 491; 72 ALJR 1508, [45].
It is common ground that the appellant was under an obligation to afford the respondent procedural fairness.[104] The parties differ regarding whether what the appellant did in the circumstances was sufficient to comply with its obligations. In Saeed the plurality said: “It is necessary to bear in mind, in that regard, that what is required to provide procedural fairness according to the rule will vary. Natural justice is flexible and adaptable to the circumstances of the particular case.”[105] As Gleeson CJ noted in Re Minister for Immigration and Multicultural Affairs; Ex parte Lam, dealing with the content of procedural fairness, “Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice.”[106] The passage from Saeed quoted at [59] above is also important.
[104] Appellant’s submissions, [2.9(3)].
[105] Saeed, [18].
[106] [2003] HCA 6; 214 CLR 1; 195 ALR 502; 77 ALJR 699, [37]. See also SZBEL, [26].
The Arbitrator referred to and discussed the Federal Court decision in Pilbara Land Council, relied on by the appellant. The Arbitrator correctly concluded that that decision relevantly dealt with what a decision maker was required to disclose about his thinking prior to making a decision, as opposed to the disclosure of evidence.
The failure to provide statements
The Arbitrator gave specific reasons for his view that the appellant should have provided the statements taken by Ms Klaassen to the respondent, prior to making a decision on the substantive allegations (see [29] above). The Arbitrator said that transcript references in the Klaassen report indicated that many of the statements extended to “many pages”. It followed that large portions of the statements were not disclosed. The Klaassen report indicates that there was a separate transcript of the interview held with each witness.[107] The page references for the various transcripts of interviews range up to 35 pages (Marilene Caranto), 33 pages (Heidi Caranto), 24 pages (Indira Dhamoon), 7 pages (Rana Murphy), 12 pages (Jeffrey McLeod), 13 pages (Badr Messiha) and 23 pages (Josephine Herry).[108] Additionally, there were earlier statements that Ms Klaassen considered from Ms Marilene Caranto (dated 10 and 14 December 2015) and Ms Heidi Caranto (dated 14 December 2015).[109] This was consistent with the Arbitrator’s conclusion that large portions of the statement evidence were not disclosed.
[107] Reply, p 73.
[108] Reply, pp 47–69.
[109] Reply, p 46.
The Arbitrator said that the absence of the statements meant that the respondent was deprived of the means to examine and contrast the various statements, to detect inconsistencies.
The Arbitrator referred to the fact that the Klaassen report stated that the statements were attached, yet they were not. The allegations were serious, and the proposed sanctions severe. Disciplinary action for breaches of the Code of Conduct extended to termination of employment,[110] as occurred in this instance. The Arbitrator observed that the only reason proffered by the appellant for non-disclosure of the statements was that it did not have to do so.
[110] Reply, p 153.
In Kioa it was observed by Deane J that there may be instances where the content of procedural fairness is restricted by circumstances (such as a prohibited immigrant going into hiding).[111] The Arbitrator accepted that there may be circumstances where “… it is appropriate to withhold some or all of the witness statements from an employee. Questions of safety or privacy may arise.”[112] This was not such a case. The appellant submits its objectives involved safeguarding the safety of other employees (see [51] above, and the submission recorded at [61] and [62] above). The appellant had moved the respondent out of his supervisory position and he was no longer working with the complainants. The evidence does not suggest that he represented an ongoing threat to other employees of the appellant, whilst the investigation was being conducted. The appellant does not proffer any reason which would have necessitated, from a practical point of view, curtailing the content of the procedural fairness which it owed to the respondent.
[111] Kioa, per Deane J, [7].
[112] Reasons, [157].
The appellant submits the respondent was made aware of the allegations via other sources (see [54] above). One of these is submitted to be “gossip”. The submission that the appellant could comply with its obligation to give appropriate notice of the relevant “adverse information”, through gossip in the workplace, is rejected. The appellant submits a meeting with the appellant’s representatives and attendance at the mediation provided knowledge of the allegations. Ms Klaassen transcribed interviews with seven witnesses and examined other material, involving minutes from team meetings, emails regarding complaints, earlier statements by Ms Marilene Caranto and Ms Heidi Caranto and information from Mr Franke.[113] The material just referred to was all described as having been attached to the Klaassen report.[114] Whilst the respondent clearly would have had some concept of the nature of the allegations, there is no basis to conclude, on the evidence, that he would have been aware of the content of the evidence overall that was being considered.
[113] Reply, p 73.
[114] Reply, p 73.
The letter dated 22 March 2016[115] set out three complaints involving each of the three complainants. Each of these complaints referred to the alleged events as having occurred “[b]etween 2011 and 2015”, that is, on some unspecified date or dates over a period of five years. The letter stated “[w]e are unable to provide you with specific dates or times”. Two of the three complaints (relating to Ms Marilene Caranto and Ms Herry) had multiple allegations, some of which were very general. It was alleged, for example, that over the five year period the respondent “[t]ouched Ms Marilene Caranto on the head, arms, hands and leg”, and over the same period he “[h]ugged and kissed Ms Josephine Herry to greet her”. It would be anticipated that the statements of the complainants and others would provide more context to these complaints. The general way in which these complaints were formulated and put to the respondent for response, in the letter dated 22 March 2016, did not provide adequate notice of the complaints.
[115] Reply, pp 122–127.
The appellant also submits the respondent would have been aware of the allegations through provision of the investigation report. The appellant conceded that the respondent would not have received the Klaassen report in sufficient time to respond to the allegations.[116] The Arbitrator’s reasons noted that the Klaassen report was provided to the respondent “at some point in time, absent the statements”, and that it was not known when.[117]
[116] T2 75.24–27; 80.8–15.
[117] Reasons, [182].
The appellant submits that in addition to being given the opportunity to respond, the respondent took advantage of that opportunity. It refers to the mediation, the respondent’s letter dated 13 April 2016 and the letter from the respondent’s solicitors dated 22 April 2016.[118] The respondent submits the fact that he responded does not involve acceptance by him that the appellant appropriately complied with its obligations to afford procedural fairness. The respondent submits if he had failed to respond this may well have been interpreted as an admission of guilt. The respondent’s argument on this issue is correct. He had little option but to respond, given that he clearly did not accept the allegations described in the letter dated 22 March 2016. The appellant does not actually submit that the respondent’s response was inconsistent with his argument that he was not afforded procedural fairness.
[118] Appellant’s submissions, [2.9(8)].
The appellant’s submission that the respondent was fully appraised of the allegations made against him and given ample opportunity to respond is rejected. The Arbitrator’s finding at [161] of his reasons, that the statements should have been provided to the respondent, was consistent with authority and was appropriate in the circumstances of the case.
Ground No. 1 asserts error in the application of s 11A of the 1987 Act. This is a very broadly stated ground. The error alleged is identified with more precision with the assistance of the appellant’s submissions. The submissions refer to the summation of authorities in Heggie and accept the correctness of that summary. The principles set out in Heggie, of course, deal with the application of the statutory test in s 11A(1) of the 1987 Act, not with principles governing the duty to afford procedural fairness and the content of that duty. The appellant’s submissions on Ground No. 1 deal largely with whether the appellant complied with its (conceded) obligation to afford procedural fairness to the respondent. This is relevant to the issue of ‘reasonableness’ for the purposes of s 11A(1), but is clearly something different to that statutory test. The discussion above largely directs itself to arguments about procedural fairness, as this was the primary thrust of the appellant’s submissions on Ground No. 1.
Jeffery v Lintipal Pty Ltd is authority that the test of reasonableness “requires an objective assessment by the Commission”. Basten JA said:
“In my view, if, in the view of the Commission, the action taken by the employer in transferring an employee is not reasonable in all the circumstances, the employer cannot rely upon s 11A because it held a genuine belief, based on reasonable grounds, that its action was reasonable.”[119]
[119] [2008] NSWCA 138 (Jeffery), [50].
Consistent with this, it has been held that reasonableness is not established on the basis that “an employer complied with its own protocols”, unless the protocols are objectively reasonable: Trustees of the Roman Catholic Church for the Diocese of Maitland-Newcastle v Broad.[120] In Balranald Shire Council v Walsh failure by an employer, to follow its own disciplinary policy and disputes procedures, although it was not determinative, was one of two matters taken into account by O’Grady DP in upholding a decision that the employer’s actions were not reasonable.[121] In Heggie Sackville AJA said, of the employer’s actions in the course of a disciplinary process:
“Compliance with the Policy Directive is not determinative of the objective reasonableness of the Health Network’s actions, but it is a highly material consideration.”[122]
[120] [2008] NSWWCCPD 139, [62]–[63].
[121] [2013] NSWWCCPD 47, [50]–[56].
[122] Heggie, [162].
As an employer’s compliance with its own protocols can be highly relevant to the issue of ‘reasonableness’, within the meaning of s 11A(1), so too can the extent to which an employer complies with its procedural fairness obligations to a worker.
Balancing the interests of the employer and the worker
The appellant submits the Arbitrator failed to give adequate weight to the objectives of the appellant, as opposed to the rights of the respondent, when the safety of other employees was at risk. To the extent to which this could be interpreted as a submission that the safety of other employees could have been compromised by providing the statements, this is dealt with above. The appellant’s submissions do not otherwise identify specific bases on which the Arbitrator was submitted to have erred in weighing the objectives of the appellant against the rights of the respondent.
The issue of ‘reasonableness’ within the meaning of s 11A(1) was described in Heggie as an “evaluative judgment”.[123] In Vines v Australian Securities and Investment Commission Spigelman CJ said:
“Where, as here, the relevant statutory test turns on whether or not the Court is ‘satisfied’ of a matter involving a broad evaluative judgment, then the case law indicates that the degree of restraint which an appellate court should manifest is of the same order as that applicable to a discretion, in the strict sense of that word. A statutory provision expressed in terms of whether a decision maker is ‘satisfied’ of a particular matter is accurately characterised as conferring ‘a very wide discretion’.”[124]
[123] Heggie, [71], [171].
[124] [2007] NSWCA 126, [8].
This approach on appeal, to an Arbitrator’s finding regarding ‘reasonableness’ in matters involving s 11A(1), has been applied in the Commission in a number of Presidential decisions.[125]
[125] See for example St George Leagues Club Ltd v Wretowska [2013] NSWWCCPD 64, [147]–[148]; Undag v Bupa Care Services Pty Ltd [2014] NSWWCCPD 67, [57]–[58]; State of New South Wales v Phelan [2017] NSWWCCPD 29, [104]–[105]; Westpac Banking Corporation v Mani [2019] NSWWCCPD 41, [170].
The Arbitrator proceeded on the basis, consistent with the submissions of both parties, that he was not required to determine whether the respondent engaged in misconduct. The question for him was whether the appellant’s actions were ‘reasonable’.[126] The Arbitrator made various findings in the appellant’s favour, relevant to ‘reasonableness’. The reasonableness of the delay from December 2015 to March 2016 was raised by the respondent as being inconsistent with ‘reasonableness’. The Arbitrator described that delay as “a little unfortunate but reasonable in the circumstances”.[127] The respondent challenged the reasonableness of his not being kept up to date with what was happening over the same period. The Arbitrator described this as “very minor and insignificant in the overall process”.[128] The respondent criticised his transfer by the appellant to other duties in late November 2015. The Arbitrator concluded the appellant was “clearly entitled” to take this action, and said it was not only reasonable, “it was necessary”. The Arbitrator said “in the circumstances I consider the obligations of the employer with respect to potential employee safety far outweighed the [respondent’s] interests”. He accepted the transfer was reasonable.[129]
[126] Reasons, [192].
[127] Reasons, [121].
[128] Reasons, [122].
[129] Reasons, [125]–[131].
There were other parts of the process which the Arbitrator did not regard as reasonable. One of these was the failure of the appellant to furnish the respondent with the statements. This is discussed above.
The failure to interview the respondent
A further matter on which the Arbitrator did not regard the appellant’s actions as reasonable was Ms Klaassen’s failure to interview the respondent. Ms Klaassen took oral statements from the complainants and witnesses. The respondent “was only provided with the opportunity to provide a written statement”. Ms Klaassen made findings based on the credibility of the complainants and witnesses, based in part on their demeanour, when the respondent “was not provided with this opportunity”. The Arbitrator described the respondent’s complaint about the process as reasonable. He concluded there was “unfairness by the manner in which the Investigator reached her conclusions”. The Arbitrator described “this as a ‘blemish’ of the entire process”. He did “not accept that it tainted the entire action”.[130]
[130] Reasons, [165]–[170].
Ms Klaassen commenced her analysis of Complaint 1 (related to touching Marilene Caranto and associated matters) saying that “the analysis of the evidence is reduced to assessing the credibility of the parties”. The report described this complainant as “a highly credible witness who appeared genuinely upset by the actions” of the respondent. The report said that “[h]er statements at interview were consistent with her previous written statements and complaints to management and she did not contradict herself during the interview”.[131]
[131] Reply, p 49.
Ms Klaassen said of the respondent that his “written denials lacked credibility and were not consistent with denials he had made previously to his manager, Mr Scott Franke, an email he sent to his team on 19 October 2015, or an email to Mr Franke dated 13 November 2015”. The basis of this lack of consistency appears to be, according to the report, that there were references, in the letter from the respondent’s solicitors dated 22 April 2016, to two matters not raised previously. The first was “the possibility he touched the sister’s [sic] hands to assist with their ‘joint problems’”. The second was “performance or conduct issues involving the complainants” and a suggestion that the allegations were “fabricated to avoid management action”. Ms Klaassen said that the respondent “appears to have fabricated these issues in an attempt to discredit the complainants”. She said “[o]n this basis, the evidence given by Ms Marilene Caranto is preferred over that of [the respondent]”.[132]
[132] Reply, p 39.
Dealing with Complaint 2 (involving touching Heidi Caranto) Ms Klaassen said “[f]or reasons outlined above, [the respondent’s] denials lack conviction”.[133]
[133] Reply, p 52.
Dealing with Complaint 3 (hugging and kissing Ms Herry and associated matters), the report stated that the respondent “did not mention touching Ms Herry or offering her physical treatment”. Ms Herry was not one of the original complainants, although was mentioned in the letter to the respondent dated 22 March 2016. The report said that in assessing this allegation, “the investigator has had regard to the relative credibility of the parties.” The report said there was evidence that the respondent would “touch staff, both male and female, and, by his own admission, would discuss physical therapy to address pain.” She said “[i]t is therefore more likely than not that [the respondent] would have offered to massage Ms Josephine Herry”. The report said that Ms Herry “presented as a highly credible witness who was anxious about becoming involved”. It said other staff corroborated her statement and there was “no overt reason for a false statement”. It said of the respondent:
“[His] written denials lacked credibility. [The respondent] did not address these matters as they related to Ms Herry and, on the assessment of the investigator, would be more likely to provide a false statement in order to avoid disciplinary action.”[134]
[134] Reply, p 54.
It will be observed that Ms Klaassen preferred the evidence of Ms Marilene Caranto to that of the respondent, in part on the basis of her credibility at interview, compared with the respondent’s written denials. Ms Klaassen rejected the respondent’s credit by reference to the fact that two matters were raised in the letter from his solicitors, which had not been raised by the respondent previously. She concluded the respondent “appears to have fabricated these issues in an attempt to discredit the complainants”. Such an allegation does not appear to have ever been put to the respondent; there may or may not have been an explanation for why these matters were raised at the time they were. The conclusion about the credibility of the respondent’s written response, through his solicitors, carried over into the way in which Complaints 2 and 3 were dealt with. In respect of Complaint 3, there was a finding that the respondent would be “more likely to provide a false statement”, when his solicitor’s letter did not actually address Ms Herry’s complaint at all. Complaint 3 also involved an assessment of credit based on demeanour, that Ms Herry “presented as a highly credible witness”.
The letter dated 22 March 2016, from Mr White of Transport for NSW, after requesting a written response to the allegations, said:
“As part of the investigation process you may be interviewed. Should an interview be warranted, you will be advised in writing. At the interview, you may provide your version of events and any explanation or mitigating circumstances that may exist.”[135]
[135] Reply, p 125.
The evidence and submissions do not suggest the respondent was ever offered an opportunity to be interviewed, or that the investigator or the appellant ever formed a view that an interview was warranted. The Arbitrator described “unfairness” in how the investigator reached her conclusions and said this was a “blemish” of the process.[136] This conclusion by the Arbitrator was clearly available and was warranted. Notwithstanding this, the Arbitrator did not accept that this unfairness “tainted the entire action”.
[136] Reasons, [170].
In respect of the two specific areas of action on which the Arbitrator was critical of the reasonableness of the appellant’s actions, its failure to provide the statements that were part of the Klaassen report and its failure to interview the respondent, his criticisms were open and amply justified.
The basis on which the appellant ultimately failed on its s 11A(1) defence was that the appellant had failed to discharge its onus of establishing that its actions were ‘reasonable’. The Arbitrator relied on a Presidential decision in Stokes (see [34]–[38] above). The Arbitrator referred to significant matters where the evidence was absent or unsatisfactory:
(a) A lack of evidence going to any conclusion by the appellant that the respondent’s behaviour constituted serious misconduct and that due process was undertaken in relation to the termination of the respondent’s employment;[137]
(b) A lack of evidence about when the Klaassen report (in a version with the statements removed) was provided to the respondent;[138]
(c) A lack of evidence about whether the appellant complied with its own “unknown disciplinary procedures”;[139]
(d) The respondent was entitled to be heard on whether the charges were satisfied and on penalty.[140] In the absence of evidence from the appellant on this topic, it could not satisfy its onus, regarding what happened between when the Klaassen report was initially provided to the appellant and when the respondent was initially terminated;[141]
(e) The appellant failed to provide the statements to the respondent, and withheld the statements when the matter was heard by the Commission, giving no explanation;[142]
(f) Whether the appellant acted reasonably in determining that the respondent was guilty of misconduct could not be ascertained, in the absence of the statements, which were the source material.[143]
[137] Reasons, [178]–[181].
[138] Reasons, [182]–[183].
[139] Reasons, [179], [181], [184].
[140] The respondent, before the Arbitrator, referred to Bowen-James v Delegate of the Director-General of the Department of Health (1992) 27 NSWLR 457 on this point.
[141] Reasons, [185].
[142] Reasons, [187]–[190].
[143] Reasons, [191]–[195].
It was common ground that the appellant carried the onus of establishing the elements of its defence on the basis of s 11A(1). The matters identified by the Arbitrator justified his conclusion that it had failed to do so.
Ground No. 1 fails.
GROUND NO. 2
Appellant’s submissions
The Arbitrator concluded the appellant had failed to “discharge the burden of proof in establishing whether the entirety of its action with respect to discipline was reasonable”. The appellant submits this misstated the burden of proof. The appellant needed to satisfy the Commission, on the balance of probabilities, that the action taken as a whole was objectively reasonable. It was not required to “demonstrate that each step or each omission was reasonable”.[144]
[144] Appellant’s submissions, Ground 2, [1]–[2].
The appellant submits that, once it had satisfied a test that its actions taken as a whole were “objectively reasonable”, it was incumbent on the respondent to “identify any step or omission that was not objectively reasonable and that the psychiatric condition from which he suffers was wholly or predominantly caused by that step”.[145]
[145] Appellant’s submissions, Ground 2, [3].
Respondent’s submissions
The respondent submits the test applied by the Arbitrator did not “impose a standard of perfection on the appellant”. This was made clear by how the Arbitrator dealt with various imperfections, such as the delay in the investigation and the failure to keep the respondent appraised of the investigation (see [85] above). The respondent accepts the correctness of the appellant’s statement of what the appellant needed to prove, set out in [99] above.[146] The respondent submits the appellant failed to establish that its actions with respect to discipline were reasonable, referring to the findings in the reasons at [189] to [202].[147]
[146] Respondent’s submissions, [14].
[147] Respondent’s submissions, [15].
The respondent submits that the appellant’s submission described at [100] above is contrary to authority, referring to Minahan, Sinclair and Temelkov v Kemblawarra Portuguese Sports & Social Club Ltd.[148] The construction of s 11A for which the appellant contends would impose an onus on a worker where s 11A is raised, which is inconsistent with settled authority. The respondent submits “given that section 11A is a disentitling section, as a matter of logic it could only become relevant after a worker had established an otherwise compensable psychological injury”.[149]
Consideration
[148] [2008] NSWWCCPD 96 (Temelkov), [72].
[149] Respondent’s submissions, [16].
The test on reasonableness applied
The passage of the Arbitrator’s reasons to which the appellant refers is at [201], where he said:
“In the absence of critical evidence including the statements and what occurred following the provision of the Investigation Report until the applicant’s initial termination, I am not satisfied that the respondent has discharged the burden of proof in establishing whether the entirety of its action with respect to discipline was reasonable. I also do not know, although this is not determinative, if the respondent complied with its own policies.”
The appellant criticises the passage on the basis that it requires the employer to establish that the entirety of its actions with respect to discipline were reasonable, which is not the correct test. There is some infelicity of expression. The source of this passage of the reasons is probably the judgment of Spigelman CJ in Sinclair, previously quoted by the Arbitrator in his reasons at [113], and the reference in that passage to “the entirety of the disciplinary process”. It is necessary that the Arbitrator’s reasons be read as a whole.[150] “The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error”.[151]
[150] Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430, 444.
[151] Minister for Immigration & Ethnic Affairs v Wu Shan Liang [1996] HCA 6; 185 CLR 259, [30].
When the reasons are read as a whole it is apparent that the Arbitrator did not approach the test of ‘reasonableness’ on the basis that the appellant was required to demonstrate that each step or each omission was reasonable. The Arbitrator referred to a number of settled authorities dealing with s 11A(1). These included reference to the passage of Sinclair referred to immediately above and the Arbitrator noting “individual blemishes in the process did not mean that the whole process was not ‘reasonable action’”.[152] This also is consistent with the approach taken by the Arbitrator to aspects of the appellant’s actions with respect to discipline which he did not regard as reasonable. He identified blemishes, for example, in relation to delay and a failure to keep the respondent informed on the progress of the investigation, but clearly did not regard these as inconsistent with the possibility that “the entirety of the disciplinary process” may be reasonable (see [85] above). He described the failure to interview the respondent as a “blemish”, although it did not taint the entire process (see [94] above).
[152] Reasons, [113].
On a fair reading of the Arbitrator’s reasons as a whole, I do not accept that he approached the test of ‘reasonableness’ in the way the appellant submits, in dealing with this ground.
The appellant’s submissions dealing with injury
The appellant submits that if it can establish that its actions taken as a whole were “objectively reasonable”, it is then incumbent on the respondent to “identify any step or omission that was not objectively reasonable and that the psychiatric condition from which he suffers was wholly or predominantly caused by that step”. No authority is quoted in support of this proposition, which is directed towards the proof of ‘injury’ in circumstances where s 11A(1) is raised as a defence.
The most obvious argument against this proposition, in the current matter, is that the appellant conceded the issue of ‘injury’. This was clearly stated on the first arbitration date[153] and was reaffirmed by the Arbitrator, with no quibble from either party, on the second arbitration date.[154] The issue of ‘injury’ having been conceded, there was nothing further the respondent was required to do to establish it. The concession was not withdrawn.
[153] T1 3.10–12.
[154] T2 2.1–2.
The appellant’s argument on this point cannot be accepted in any event. The argument would involve considering the issue of whether an employer’s actions or proposed actions in respect of one of the protected classes of activity in s 11A(1) were objectively reasonable, and then considering whether psychiatric injury resulted from some step or omission which was not objectively reasonable. There is no support for such an approach in either the legislation or authority. In Minahan, to which the respondent refers, Foster AJA referred to the finding of ‘injury’ made by the trial judge, and continued:
“This finding was sufficient to entitle Mr Minahan to succeed in his Compensation Court Appeal, subject only to the Commissioner’s defence raised under s 11A. His Honour held, correctly in my respectful view, that the section imposed an onus on the Commissioner to prove that the depression was, relevantly, ‘wholly or predominantly caused by the reasonable action taken in respect of the discipline of the appellant’.”[155]
[155] Minahan, [25].
That is, the initial step was the finding of psychological injury. The onus was then on the employer, seeking to rely on s 11A(1) as a defence, to establish its elements. These included the issue of whether the injury resulted ‘wholly or predominantly’ from the relevant actions, in that case, in respect of discipline. There is no suggestion in Minahan, or other authority, that a worker carries an onus in respect of ‘wholly or predominantly’.
The respondent submits also that the appellant’s submission is illogical. Section 11A(1) only becomes relevant when there is a finding of psychological injury. I accept this, and adhere to the view I expressed in Flanagan v NSW Police Force, where I stated:
“It should be noted, for the sake of completeness, that the appellant’s submission that the Arbitrator conflated the tests pursuant to ss 4(b) and 11A(1) is also correct. In a case where s 11A(1) of the 1987 Act is raised as a defence, it is necessary that the issue of whether a worker has proved ‘injury’, within the meaning of s 4, be dealt with initially. It is only if ‘injury’ is established, that it is then necessary to consider whether s 11A(1) provides the employer with a defence (see Manly Pacific International Hotel v Doyle [1999] NSWCA 465; 19 NSWCCR 181 at [4]). In a claim involving the ‘disease’ provisions of the legislation, the test to establish injury (whether or not the 2012 Amending Act applies) is different to the causation issue requiring determination in s 11A(1). There were occasions, in the Arbitrator’s reasons dealing with ‘injury’, where he interspersed references to whether various events, potentially relevant to ‘injury’, might be subject to the provisions of s 11A in any event (see the reasons at [230], [242], [256] and [299]). The two issues, ‘injury’ and the causation test in s 11A(1), are different, and need to be considered separately.”[156]
[156] [2017] NSWWCCPD 33, [81].
Ground No. 2 fails.
GROUND NO. 3
Ground No. 3 asserts factual error, regarding the finding at [202] of the reasons, which reads:
“In reaching this conclusion I specifically take into account that the [appellant] chose to withhold the statements from the [respondent] so that he was deprived of a legitimate opportunity to make submissions on both the Allegations and any penalty, both during the disciplinary process and before the Commission.”
Appellant’s submissions
The appellant submits the evidence established that “certain source documents were not produced”. There was “no evidence as to why they were not produced”. There was no evidence that the appellant deliberately withheld the source documents for any particular purpose and “certainly not for the purpose of depriving the worker of a legitimate opportunity to make submissions”.[157]
[157] Appellant’s submissions, Ground 3, [1]–[2].
The appellant submits the “failure to produce evidentiary material to the Commission is irrelevant”. It “could not have caused or contributed to the worker’s psychiatric condition”.[158]
[158] Appellant’s submissions, Ground 3, [3].
Respondent’s submissions
The respondent submits the Arbitrator reached the conclusion at [202] of the reasons “inferentially”. He submits that accordingly the evidence of the appellant’s actual intention is irrelevant. The respondent refers to the reasons at [180], which read:
“The applicant sought a Jones v Dunkel rulings [sic] given the clear absence of material and the failure by the respondent to explain its absence. There is some merit in this submission because some (not all) of the material, such as the statements, are solely within the respondent’s possession. Other material, such as the initial dismissal letter, is in the possession of both parties.”
The respondent submits that if, contrary to its written submissions, the appellant’s intention is to challenge the inference the Arbitrator drew, it would have to do so in accordance with Raulston, and positively exclude the inference as being against all the probabilities. It is insufficient to simply invite the Presidential member to come to a different conclusion.[159]
[159] Respondent’s submissions, [19]–[20].
The respondent submits the appellant’s failure to adduce evidence was relevant to the primary issue, of whether the appellant’s actions with respect to discipline were reasonable. The absence of the material grounded the adverse inference drawn in the reasons at [201].[160]
[160] Respondent’s submissions, [21].
Consideration
Again, it is necessary to read the reasons as a whole. It is necessary that the reasons at [201] and [202] be read together, along with other parts of the reasons that are relevant to discharge of the appellant’s onus on the s 11A(1) issue. The finding at [201] was that the appellant had failed to discharge its onus of establishing that its actions with respect to discipline were reasonable. In support of this, the Arbitrator referred at [201] to the appellant’s failure to put its own disciplinary policies into evidence. He referred at [202] to the appellant’s withholding of the statements, which was relevant to the respondent’s ability to make submissions. The Arbitrator referred to multiple other aspects of the evidence that were relevant to whether the appellant’s onus was discharged (see [95] to [96] above).
I accept the respondent’s submission that the finding at [202], that the respondent chose to withhold the statements from the applicant, was inferential. There were multiple passages in the reasons that supported this inference. The reasons at [68] to [69] referred to the multiple attachments to the Klaassen report, and the fact that “none of the attachments, apart from the Code of Conduct and the response from the [respondent’s] solicitor, is in evidence”. The Arbitrator noted that the appellant’s submission, regarding why it had failed to provide the statement evidence to the respondent, was that the appellant “was not under a legal requirement to provide the material”.[161] In the reasons at [141], the Arbitrator noted the appellant’s failure to provide the statement evidence had been raised at the initial listing in the matter, the telephone conference, yet the appellant “subsequently failed to adduce this evidence”.[162] The Arbitrator noted the appellant “made no submissions on why it refused to provide the statements”.[163] At [161] of the reasons the Arbitrator gave reasons for why he considered the statements should have been provided to the respondent. One of these was that the appellant at no time proffered a reason as to why the statements were withheld. This was repeated at [172].
[161] Reasons, [133].
[162] Reasons, [141].
[163] Reasons, [160].
In the reasons at [178] to [187], the Arbitrator dealt with various matters on which the appellant sought that inferences be drawn, that it had “complied with correct processes”, where evidence was lacking, in part due to the absence of material (including the statements) in the appellant’s possession. The Arbitrator declined to draw such inferences. The Arbitrator in the reasons at [188] to [190], after noting that the “missing documents” were raised at the original telephone conference in the matter, concluded the appellant “made an intentional decision to withhold the statements”. “No explanation is given.”
The respondent correctly refers to Raulston, and submits it is not enough that a Presidential member would have drawn a different inference, it “must be shown the Arbitrator was wrong” (see [45] above). The appellant’s submissions do not make an argument that the inference drawn by the Arbitrator, on whether the appellant deliberately withheld the statements, was wrong, applying the principles quoted at [45] above. There were compelling reasons for the inference that was drawn. It follows that the appellant’s attack, on the finding in the reasons at [202], does not succeed.
The appellant also submits there was no evidence regarding the appellant’s motivation for withholding the documents. The way in which the reasons are expressed at [202] of the reasons, particularly the words “so that”, are potentially ambiguous. They could suggest that depriving the respondent of an opportunity to make submissions was the appellant’s intention, or they could simply record that the respondent’s ability to make submissions was impeded as a result of the failure. In Heggie Basten JA said:
“Her reasons for making the decision could have been relevant in a negative sense, if, for example, it were established that she was actuated by malice or other irrelevant factors. There was, however, no suggestion to that effect. Given the need to assess the reasonableness of the action objectively, her actual reasons for the decision were of little significance.”[164]
[164] Heggie, [11].
On one reading of the reasons at [202], malice may have been an element in the failure of the appellant to furnish the statements to the respondent at an appropriate time. On another reading it was not an element. The reasons at [195] refer to “[w]hatever suggestion the [appellant] had for not providing this evidence [the statements] …”. This does not suggest the Arbitrator made a finding that the appellant’s failure to provide the statements was actuated by malice. There were other deficiencies in the appellant’s case on reasonableness, identified by the Arbitrator in the reasons at [178] to [185]. Deficiencies, noted by the Arbitrator, are also referred to at [96] above. The majority of these would not involve the appellant being motivated by malice or other irrelevant factors.
I am not persuaded, reading the reasons as a whole, that the Arbitrator made a finding that the respondent’s decision to withhold the statements was based on malice. The appellant’s reasons for withholding the statements were not, as the Arbitrator made clear, identified by the appellant. Consistent with the passage from Heggie quoted at [123] above, such reasons are of little significance. The Arbitrator’s finding was that the appellant had failed to discharge its onus on the s 11A(1) issue of reasonableness.
The appellant submits the failure to produce material to the Commission could not have caused or contributed to the psychological injury, and therefore was irrelevant. The significance of the failure to produce the material to the Commission was not that it could be causally related to the injury. The significance was that the Arbitrator was dealing with whether the appellant had discharged its onus on the s 11A(1) defence, and it had failed to adduce evidence that was in its possession and arguably likely to be relevant, without explanation.
Ground No. 3 fails.
GROUND NO. 4
This ground asserts that the Arbitrator erred in concluding, by inference, that the psychiatric condition arose wholly or predominantly from the employer’s failure to provide source material to the respondent or to interview the respondent.
Appellant’s submissions
The appellant submits the respondent had an onus “of establishing that his psychiatric condition resulted from those alleged actions of the employer which were unreasonable”. A number of the actions were found to be reasonable. The appellant refers in this regard to the respondent’s transfer and to the initiation of an investigation.[165] The appellant submits the Arbitrator severed discrete actions from within the appellant’s overall action and found them to be unreasonable. This is submitted to involve relying on “individual blemishes”, contrary to Sinclair.[166]
[165] Appellant’s submissions, Ground 4, [1]–[2].
[166] Appellant’s submissions, Ground 4, [1]–[3].
The appellant submits the respondent conceded that his psychiatric condition resulted from the appellant’s actions with respect to discipline as a whole. He did not concede his condition resulted from the failure of the appellant to provide statements or the appellant’s failure to interview the respondent after an investigation was commissioned.[167] The appellant submits that Dr Rastogi’s opinion is consistent with the psychiatric condition being established by October 2015, and certainly by 7 March 2016 after the respondent had participated in a mediation. The failure to provide source documents or to interview the respondent occurred after the respondent’s condition was established.
[167] Appellant’s submissions, Ground 4, [4].
Respondent’s submissions
The respondent submits the appellant’s submissions on this ground, described in the opening sentence of [128] above, are mistaken in the same way as those relating to Ground No. 2 (see [102] above).
Referring to the Sinclair argument, the respondent submits such a statement of the law would be inconsistent with an isolated act by an employer, as part of an overall process, ever being more than a ‘blemish’. This is not the law. The respondent submits those matters the Arbitrator described as ‘blemishes’ he then put to one side. The appellant submits the only matter the Arbitrator found to be unreasonable was the appellant’s non-disclosure of the statements, prior to proceeding to a finding of guilt and imposing a penalty. The respondent refers to the reasons at [140], [161] and [164]. The Arbitrator’s decision rested on matters that the appellant had failed to establish on the probabilities, that it needed to prove to make out its case pursuant to s 11A(1).[168]
[168] Respondent’s submissions, [24].
The respondent submits that the appellant’s submission that the psychological injury occurred prior to a certain date was not made before the Arbitrator and cannot be made now. Additionally, it is contrary to the appellant’s concession regarding ‘injury’ which was of injury caused by the disciplinary process between 23 October 2015 and 4 November 2016, when the respondent’s employment ended. It is submitted to also be inconsistent with Heggie, that there is focus on the entire disciplinary process.[169]
[169] Respondent’s submissions, [25].
Consideration
The appellant seeks to argue that, based on the opinion of Dr Rastogi, the psychological injury occurred prior to dates in October 2015 or March 2016, before either the failure to interview the respondent or the failure to supply the statements occurred. This would, on that argument, be inconsistent with a causal relationship between those deficiencies (if they are recognised as such) and the psychological injury. The respondent properly objects to this argument being raised at this stage, it not having been raised at first instance. The appellant should not be permitted to raise this argument for the first time on appeal.[170] The argument accordingly is rejected.
[170] Metwally v University of Wollongong [1985] HCA 28; 60 ALR 68; 59 ALJR 481, [7], Coulton v Holcombe [1986] HCA 33; 162 CLR 1, [15].
This ground asserts the Arbitrator erred in finding that the psychological injury arose wholly or predominantly from the employer’s failure to provide source material to the respondent or to interview the respondent. This ground is based on a misconception of how the case was conducted before the Arbitrator. The issue of whether the respondent suffered a psychological injury in the course of or arising out of his employment was not in issue (see [107] to [108] above). The respondent did not have to do anything further to establish ‘injury’. On the second day of the arbitration hearing, the Arbitrator recited, for the record, the matters that were agreed by the parties on the earlier arbitration date. He recorded the “causes of injury” on which the respondent relied. These included “the investigation process”. Neither party quibbled with the Arbitrator’s recitation of the matters that were agreed. Clearly the failure to provide the statements to the respondent, and the failure to interview him, were part of the investigation process. No one suggested to the contrary. The Arbitrator noted that the appellant relied on “the same causative events for the purposes of section 11A”, and that “injury was not in issue”.[171]
[171] T2 1.32–2.2.
Consistent with this, the Arbitrator in his reasons referred at the outset to the “accepted psychological injury”, which he described as arising “from allegations made against the [respondent] by co-workers and the subsequent investigation process”.[172] It follows that Ground No. 4 is essentially unarguable. It is inconsistent with how the case was conducted before the Arbitrator, and the concessions made. The appellant’s submissions on this ground additionally face the same difficulty as those dealing with Ground No. 2 above, in that they conflate the proof of injury by a worker with proof by an employer of the causation test in s 11A(1). This is erroneous for the brief reasons given at [109] to [111] above.
[172] Reasons, [1].
The submission that the Arbitrator relied on “individual blemishes”, contrary to the decision on Sinclair, is without substance. The Arbitrator relied on the failure of the appellant to discharge its onus of proving the s 11A(1) defence, having regard to deficiencies in its evidence which he described (see [96] to [97] above).
Ground No. 4 fails.
DECISION
The Arbitrator’s decision dated 18 June 2019 is confirmed.
Michael Snell
DEPUTY PRESIDENT
17 December 2019
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