Salaj v Results Laser Clinics Pty Ltd
[2025] NSWPIC 156
•17 April 2025
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Salaj v Results Laser Clinics Pty Ltd [2025] NSWPIC 156 |
| APPLICANT: | Kimete Salaj |
| RESPONDENT: | Results Laser Clinics Pty Ltd |
| MEMBER: | Adam Halstead |
| DATE OF DECISION: | 17 April 2025 |
CATCHWORDS: | WORKERS COMPENSATION - Workers Compensation Act 1987; claim for weekly benefits and medical expenses in relation to a psychological injury; fact of injury admitted; respondent relies on section 11A in relation to discipline and performance appraisal; allegation of serious misconduct; respondent relies on CCTV footage as evidence of serious misconduct; CCTV footage not produced; reasonableness of respondent employer action; Held – psychological injury arose from management action; management action by respondent not reasonable; section 11A defence not established; orders for weekly compensation and treatment expenses. |
| DETERMINATIONS MADE: | The Commission determines: 1. Leave is granted for the applicant to amend the deemed date of injury to 25 May 2024 and that the injury be of the ‘disease’ type. 2. The applicant suffered psychological injury in the course of her employment with the respondent, with a deemed date of injury of 25 May 2024, and that employment was the main contributing factor. 3. As a result of the injury, the applicant has been wholly incapacitated for employment from 4. The applicant had pre-injury average weekly earnings of $1,524.85. 5. Respondent to pay weekly compensation to the applicant pursuant to s 36 of the Workers Compensation Act 1987 (the 1987 Act) from 25 May 2024 to 23 August 2024 at the rate of $1,448.61 per week. 6. Respondent to pay weekly compensation to the applicant pursuant to s 37 of the 1987 Act from (a) 24 August 2024 to 30 September 2024 at the rate of $1,219.88 per week; (b) 1 October 2024 to 31 March 2025 at the rate of $1,248 per week, and (c) 1 April 2025 to date and continuing at the rate of $1,256 per week. 7. Parties have liberty to apply within seven days of the date of these orders in respect of the calculation of indexation of the weekly compensation amounts. 8. Respondent to pay the applicant's reasonably necessary medical and treatment expenses pursuant to s 60 of the 1987 Act upon production of accounts, receipts and/or Medicare Australia Notice of Charges. A brief statement is attached setting out the Commission’s reasons for the determination. |
STATEMENT OF REASONS
BACKGROUND
The applicant, Kimete Salaj, has been employed by the respondent, Results Laser Clinics Pty Ltd, since about February 2015 in various administration, customer service and supervisory roles. She has not been at work since 24 May 2024 and claimed workers compensation based on a psychological condition she says resulted from events at work around that date. The respondent disputes the claim and contends the events relied upon by the applicant were reasonable management action.
An Application to Resolve a Dispute (ARD) was lodged at the Personal Injury Commission (Commission) by the applicant on 20 November 2024 in relation to the disputed claim.
PROCEDURE BEFORE THE COMMISSION
The matter was before the Commission for arbitration hearing on 6 March 2025. Mr Tanner of counsel, instructed by Turner Freeman Lawyers, appeared for the applicant, who was also present. The respondent was represented by Mr Stiles of counsel, instructed by McCabes Lawyers and its insurer, Employers Mutual Limited.
I am satisfied the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I endeavoured to bring the parties to the dispute to an acceptable settlement. The parties had sufficient opportunity to explore settlement. They were unable to reach an agreed resolution of the dispute.
The applicant sought leave to amend the ARD for the deemed date of injury to be
25 May 2024 and the psychological injury to be of the ‘disease’ type. The respondent did not object to the proposed amendment and the request was accepted as consistent with the material relied upon by the applicant in the proceedings. Leave was granted accordingly.
ISSUES FOR DETERMINATION
The primary issue in dispute is whether the respondent has established a defence pursuant to s 11A of the Workers Compensation Act 1987 (the 1987 Act).
The applicant’s capacity for work from October 2024 is also in issue as the respondent contends there is a lack of medical evidence from that time to confirm incapacity, which is a contention disputed by the applicant.
EVIDENCE
Documentary evidence
The following documents were in evidence before the Commission, without objection, and considered in making this determination:
(a) ARD and attached documents;
(b) Reply with attachments from the respondent (Reply), and
(c) Application to Lodge Additional Documents (ALAD) lodged by the applicant on
7 February 2025.The respondent lodged two ALADs on 28 February 2025. The applicant objected to various documents contained in those. The respondent did not press the admission into evidence of that material generally, other than for the statements of Hanni Anjoul made on
28 February 2025 (the Anjoul statement) and Paulina Saliba made on 25 February 2025 (the Saliba statement). The applicant did not object to the Anjoul statement being admitted into evidence and it was received accordingly. Objection was made to the Saliba statement and, for the reasons given at the hearing, admission was refused.There was no application to call oral evidence or cross-examine any witness at the hearing.
CONSIDERATION, FINDINGS AND REASONS
The ‘Reasonable Action’ defence
It is undisputed the applicant has a psychological injury for the purposes of s 4 of the 1987 Act and that it arose from action taken by the respondent in the course of employment.
Section 11A(1) of the 1987 Act provides:
“No compensation is payable under this Act in respect of an injury that is a psychological injury. If the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.”
An employer that seeks to make out a defence pursuant to s 11A carries the onus of establishing that defence: Pirie v Franklins Limited [2001] NSWCC 167.
“Wholly” and “predominantly” are separate concepts and a finding of one or the other must be considered and those have been determined to mean “mainly or principally caused”: Smith v Roads and Traffic Authority of NSW [2008] NSWWCCPD 130.
The test of causation to be applied is that of a common-sense evaluation of the causal chain, as referred to by Kirby P in Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452.
There are two requirements in s 11A and both need to be satisfied for the defence to succeed. The conduct relied on by the employer must be the whole or predominant cause of the applicant’s injury and that conduct must be reasonable.
According to Geraghty J in Irwin v Director General of Education NSWCC 14068/97,
18 June 1998:"... The test of 'reasonableness' is objective and must weigh the rights of employees against the object of the employment. Whether an action is reasonable should be attended, in all the circumstances, by questions of fairness."
In Ivanisevic v Laudet Pty Ltd (unreported, 24 November 1998), Truss CCJ 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 affected.”
In Jackson v Work Directions Australia Pty Ltd [1998] NSWCC 45, Armitage J said that “only if the employer’s action in all the circumstances was fair could it be said to be reasonable”. Reasonableness is also to be assessed with regard to fairness in the circumstances of a case, including anything that occurred before or after particular action: Melder v Ausbowl Pty Ltd [1997] 15 NSWCCR 454.
The respondent contends its relevant action for the purposes of s 11A of the 1987 Act was with respect to performance appraisal and discipline. It is undisputed that relevant events occurred from 16 to 25 May 2024. The interactions between the applicant and management of the respondent that occurred on 24 and 25 May 2024 are central to the dispute. It is uncontentious that the action the respondent claims to have been reasonable was the whole or predominant cause of the applicant’s psychological injury. I am reasonably satisfied the medical evidence establishes the action was the predominant cause of the applicant’s psychological injury.
According to the 13 August 2024 statement evidence of Rosemary Dib, the respondent’s accounts and payroll officer, she was approached by Paulina Saliba, the Chief Executive Officer (CEO), who said the applicant “had shown potential serious misconduct example [sic] working on her own business during paid working time”.[1] Ms Dib went on to recount her version of events on 24 May 2024 with the applicant and CEO’s husband, John Habkouk:[2]
[1] Reply p 126 at [12].
[2] Reply p 127.
“14. On Friday, I attended a meeting with John to let the [applicant] know that we had identified serious action, and we needed to suspend her. It was not a misconduct meeting. She asked me to act as a support person. I was not asked to participate in the meeting. I had my notebook.
15. John had advised the [applicant] to come to his office so that he could speak with her.
16. John came in and I sat with the [applicant] and explained that there was a camera audit that found she was doing things that were not work related by working on her logo and showing staff her logo for her cupping business.
17. At first, the [applicant] was evasive and then she admitted doing this at that point when was not shown the CCTV. She indicated that she was trying to fill in time and it was slow at the clinic and she was bored. John told her that due to the nature of her actions she would be suspended on full pay while an investigation was undertaken.
18. I have been advised that the [applicant] has alleged that during the meeting she was advised not to go back to the clinic. She asked me what was happening. John returned and told her to go home. The [applicant] left feeling humiliated and embarrassed and she received an email alleging serious misconduct.
19. My response is that I sent her an email containing the basis for suspension. There was no reference to any psychological support. The email was created by our HR advisor.
20. The [applicant] did not seem highly emotional and was surprised that she had been taken to task. She was upset but not crying. She indicated that she was going home. I went to see her off in her car but she had left when I got to the front, I think she left to go home.
21. I sent the email around midafternoon. The email explained that the [applicant] was not allowed to attend the clinic or clients without consent, confidentiality of the meeting. The [applicant] was the manager of the clinic and was influential with the other employees.
22. I believe I had a message for the [applicant] saying at [sic] she had no call from Paulina and I suggested that she would receive a call. She was asking to receive a call from Paulina.
23. I believe that Paulina called the [applicant] the next day. Paulina told me that she had confirmed the investigation and suspension.”
There is a letter in evidence from Ms Dib to the applicant dated 24 May 2024 entitled ‘Confirmation of Suspension’ that commences:[3]
“The purpose of this letter is to formally advise you that a number of allegations of serious misconduct have recently been brought to our attention.
Due to the serious nature of these allegations, we confirm that you will be stood down and suspended from your normal duties pending the resolution of this matter.
…”
[3] Reply p 108.
It is noted that in her statement evidence, the applicant denies having been offered or having a support person at the 24 May 2024 meeting with Mr Habkouk and Ms Dib.[4] Although she claims the applicant “asked me to act as a support person” in that meeting, Ms Dib’s role was evidently something other than of providing independent support to the applicant. Ms Dib had earlier been briefed by the CEO about a “potential serious misconduct example” by the applicant, took notes and prepared a file note on behalf of the employer respondent, drafted then sent the “Confirmation of Suspension” letter and had at least one subsequent discussion with the CEO about the applicant. Ms Dib was perhaps confused if she considered herself to be present in a support role for the applicant during the 24 May 2024 meeting. The applicant’s evidence about having no support person at that meeting is accepted in the circumstances.
[4] ARD p 3 at [34] and [35].
The respondent relies on the 13 August 2024 statement evidence of Hanni Anjoul, its operational manager, wherein she refers to quarterly “audits” of closed-circuit television (CCTV) recordings in the respondent’s clinics and states:[5]
“Around mid-May 24 to 26 2024, Katrina conducted the audit and she sent me the snip of the CCTV. I saw the [applicant] creating business cards in front of staff members and to show staff her laptop and staff was [sic] hovering around. There were no client in the salon at that time. I saw the [applicant] using the printer to print consent forms for her cupping business.”
[5] Reply p 122 at [23].
That represents the sum total of the evidence before the Commission in these proceedings for the event relied upon by the respondent as “serious misconduct”. The CCTV apparently viewed by Ms Anjoul is not in evidence before the Commission. Ms Dib confirmed in her statement that it had not been shown to the applicant in the 24 May 2024 meeting with
Mr Habkouk. Ms Anjoul’s later statement of 28 February 2025 provides additional commentary and opinion about the recording but no further direct evidence.The applicant’s evidence is that she was not shown the recording[6] and she rejects having “done anything wrong”.[7] Some evidence from the applicant that may well be relevant to the allegation is that she used her “personal equipment” for work purposes for several years,[8] including her phone.[9]
[6] ARD p 3 at [35].
[7] ARD p 4 at [41].
[8] Reply p 114.
[9] ARD p 3 at [35].
In the circumstances, I am unable to assess whether the observations Ms Anjoul claims to have made of the CCTV recording and her account of it is an accurate representation of the nature of the applicant’s activities at the time the footage was captured. While I accept it was that event the respondent relies upon in relation to the disciplinary action it purported to pursue, there is insufficient evidence to determine from the brief third person and untested account given by Ms Anjoul whether the alleged event did in fact occur as claimed.
A copy of the respondent’s ‘Employee Handbook’ is in evidence[10] and Chapter 13 contains a section entitled “Disciplinary Procedure”. The policy aims to “encourage improvement in the conduct of individuals where they are failing to meet the required standards” rather than act “merely as a means of punishment”.[11] It makes clear that termination may result on the first occasion it is found to have occurred for “serious misconduct”,[12] which is a policy consistent with general principles of employment law and is not unreasonable.
[10] Reply p 35.
[11] Reply p 70 at [13.1].
[12] Reply p 72 at [13.5].
According to the somewhat circular explanation, “serious misconduct [is] significant because the penalty may be termination without notice”.[13] Although the policy does not “provide an exhaustive list of examples of serious misconduct”, reference is made to a “fundamental breach” that “irrevocably destroys the trust and confidence necessary to continue … employment”. The examples of serious misconduct that are given cite:[14]
· theft or fraud;
· physical violence or bullying;
· deliberate damage to property;
· deliberate acts of unlawful discrimination or harassment;
· possession, or being under the influence, of illegal drugs at work, and
· breaching health and safety policies.
[13] Reply p 71 at [13.4].
[14] Ibid.
The conduct alleged by the respondent against the applicant clearly does not fall into the category of any of those examples. It is relevant to note though that despite the allegation of “serious misconduct” levelled against the applicant, her employment was not terminated at the 24 May 2024 meeting or by the letter that followed as is provided for in the policy.
The applicant’s undisputed evidence is that she had a conversation with Ms Saliba on
25 May 2024:[15]“39. I received a call on Saturday, at about 3.30 pm. Paulina advised me that she had her husband with her. Paulina said to me, words to the effect, ‘Sorry Kim, the trust was lost’. I respondent with words to the effect. ‘what trust’. She then demanded that I resign and said that ‘it was the best option’.
40. I then asked, ‘what would happen if I don’t resign’ [emphasis in original]. She then said words to the effects, ‘I will do what I have done to other staff” and “I will have to take disciplinary action’. She also threatened to check the CCTV footage and micromanage me if I do not resign. She then raised that other staff said that they were being micromanaged, and several people resigned that week. This was the first time I was made aware of this. I had not received any complaints or warnings prior to this.
41. At around 4:00 pm, Paulina asked me what I wanted to do. I responded and said that I need more time, and she gave me until 5pm that day. In the meantime, I felt numb and I had no words as I was in shock. I could not think of what options I had, as I was caught completely off guard as I knew that I had not done anything wrong. I decided not to resign and I sent a text message to Paulina. I also indicated that I would need to obtain legal advice.”
[15] ARD p 4.
This account of the telephone discussion is corroborated by the extract of SMS messages exchanged between the applicant and Ms Saliba on 25 May 2024[16] and the email sent by the applicant to Ms Dib at 3.47pm on 27 May 2024.[17] The applicant’s evidence is uncontradicted and is accepted as a reliable account of relevant events on 25 May 2024.
[16] Reply pp 104 and 112.
[17] Reply p 114.
In its submission about the disciplinary protocol, the respondent stressed the meeting of
24 May 2024 was only “the initial stage of the process”. If that were the case, then it is reasonable to assume that no conclusion should have been reached at that time about the content of the CCTV recording and the applicant was yet to be given an opportunity to respond to the allegation. Notwithstanding the early stage of the process, it is apparent the respondent, through its most senior executive officer, had already decided the applicant was guilty of misconduct and threatened consequences if she did not immediately resign.In seeking to extract a resignation from the applicant, Ms Saliba engaged in behaviour that was alarming and intimidatory. It departed significantly from the respondent’s own disciplinary policy that required action to be “fair” and that its subject should be “given the opportunity to state [their] case” where they would “only be disciplined after careful investigation of the facts”.[18] It seems that by the time of her contact with the applicant on
25 May 2024, Ms Saliba, in her role as CEO of the respondent, decided to abandon the safeguards contained within the policy for a generally accepted and ostensibly fair process and instead embark upon a course of her own design. Such an egregious departure from the norm by the respondent’s most senior officer could hardly be accepted as reasonable.[18] Reply p 70 at [13.1].
I do not accept the defence at s 11A of the 1987 Act has been established by the respondent. On balance, the evidence of the event said to be serious misconduct is inadequate, essentially being confined to the observations and commentary of an employee of the respondent who may not be impartial and where the key source evidence, that is the CCTV footage, was not viewed by the applicant or produced in these proceedings. Even if the events relied upon had been established to a satisfactory standard, it is an open question as to whether it would have been serious misconduct according to the respondent’s own policy; probably not. Most concerningly, the behaviour of the respondent’s own CEO was, at best, grossly inappropriate given her attempts to coerce the applicant’s resignation. The management action taken by the respondent was not reasonable in the circumstances and the defence fails as a result.
Although the applicant advanced a, not improbable, theory on the motive for the respondent’s decision to pursue the disciplinary action, being relevant to the business trading conditions, it has been unnecessary to consider that issue. The respondent’s action was plainly not reasonable whatever the motivation for it.
Capacity
Although there is medical evidence from the applicant’s general practitioner (GP) that she was incapacitated for work as early as 24 May 2024, the applicant relies on a deemed date of injury of 25 May 2024. The latter date is accepted as the date of injury in all the circumstances as there can be little doubt the applicant was incapacitated for work by that date given what occurred then.
The respondent contends that there is insufficient evidence to find the applicant was incapacitated for work after October 2024. The applicant asserts ongoing incapacity.
In his report of 6 August 2024, Dr Iftikhar Ahmad, psychiatrist (the independent medical examiner qualified by the respondent), opined that the applicant “could be considered for [a] graded return to work plan” from 25 August 2024, but noted there were “perceived mistreatment and trust issues”.[19]
[19] Reply p 96.
On 3 October 2024 the applicant’s treating GP, Dr Sajida Atif, considered her to “currently have no capacity to work”. The applicant’s treating psychiatrist, Dr Richa Rastogi, considered in his report of 20 October 2024, that she “remains incapacitated to work currently” and that “she is still seeking treatment that is being established”.[20]
[20] ARD p 48.
The 31 October 2024 report of Dr David Kumagaya, consultant psychiatrist (the independent medical examiner qualified by the applicant), found the applicant to present at that time with “total vocational incapacity” that would “persist into the foreseeable future”.[21]
[21] ARD p 39.
There has been no evidence produced in these proceedings that the applicant has recovered and has capacity for employment. The most recent available expert medical evidence is that of Dr Kumagaya, which states there is on-going incapacity. In the absence of other contra evidence, his opinion is accepted.
Weekly compensation
As the applicant is incapacitated for work as a result of a psychological injury that arose from the respondent’s conduct, she is entitled to receive weekly compensation in accordance with ss 36 and 37 of the 1987 Act from the date incapacity arose. The applicant’s date of injury has been accepted as 25 May 2024 and there is supporting medical evidence of incapacity at that time according to Dr Atif’s 12 June 2024 Certificate of Capacity.[22] It is undisputed the applicant has pre-injury average weekly earnings (PIAWE) of $1,524.85, which is subject to indexation on 1 October and 1 April each year.
[22] ARD p 127.
Section 36 of the 1987 Act provides that weekly compensation is to be paid at 95% of PIAWE for the first 13 weeks of incapacity. The applicant is therefore entitled to receive $1,448.61 per week (being 1524.85 x 0.95) from 25 May 2024 to 23 August 2024.
Section 37 of the 1987 Act provides for payment at 80% of PIAWE from weeks 14 to 130 and so the applicant is to receive $1,219.88 per week (being 1524.85 x 0.8) from 24 August 2024 to 30 September 2024.
The indexation factor is applied to PIAWE from 1 October 2024: 1524.85 x 1.0198 = $1,560 (rounded to the nearest $10) and weekly compensation is to be paid at that rate to
31 March 2025. Further indexation is applied from 1 April 2025: 1560 x 1.0043 = $1,570 (rounded) with weekly compensation at that rate to be paid to date and then continuing.
Medical and related treatment expenses
It was not disputed that if the applicant were found to be entitled to an award for compensation, then a general order for reasonable medical and treatment expenses pursuant to s 60 of the 1987 Act would be appropriate. Given it has been found the applicant’s psychological injury arose from a workplace disciplinary process that was not reasonable, such an order will be made accordingly.
SUMMARY
The applicant suffered a psychological injury at work that arose from action by the respondent that was not reasonable in relation to performance appraisal and/or disciplinary matters. She was incapacitated for work because of that injury. Weekly compensation and reasonable treatment expenses are to be paid by the respondent. The orders now made address those payments.
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