Shoalhaven City Council v Booth - [2019] NSWWCCPD 47

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Shoalhaven City Council v Booth [2019] NSWWCCPD 47
APPELLANT:	Shoalhaven City Council
RESPONDENT:	Brad Booth
INSURER:	Self-insured
FILE NUMBER:	A1-6190/18
ARBITRATOR:	Mr W Dalley
DATE OF ARBITRATOR’S DECISION:	13 March 2019
DATE OF APPEAL DECISION:	9 September 2019
SUBJECT MATTER OF DECISION:	Whether the Arbitrator was correct to find that actions of the appellant which caused psychiatric/psychological injury to the respondent were not reasonable within the meaning of s 11A of the Workers Compensation Act 1987
PRESIDENTIAL MEMBER:	Acting Deputy President Larry King SC
HEARING:	On the papers
REPRESENTATION:	Appellant:	Bartier Perry
Respondent:	Carroll & O’Dea Lawyers
ORDERS MADE ON APPEAL:	1. The Arbitrator’s Certificate of Determination of 13 March 2019 is confirmed.

INTRODUCTION

This is an employer’s appeal from a decision of an Arbitrator holding that the appellant had not discharged the onus of proof which lay upon it, that onus being to establish that the respondent worker’s psychiatric/psychological injury the subject of the claim resulted wholly from reasonable action taken by the appellant with respect to discipline: s 11A of the Workers Compensation Act 1987 (the 1987 Act).
The case was conducted before the Arbitrator with admirable economy and attention to the real issue by the parties. It was common ground between them that the respondent had suffered psychiatric/psychological injury and that it resulted wholly from conduct or action on the part of the appellant through its officers. This meant that the injury was a compensable one unless the appellant could show that the relevant conduct which brought it about was “reasonable”. As just mentioned, the Arbitrator held that it was not.

EVIDENCE

Further, there was no dispute between the parties as to the events that took place culminating in the respondent’s injury. The following brief summary thereof is taken substantially from the reasons of the Arbitrator, which include a review of the evidence which accurately reflects the evidence itself that was before him. (The written submissions of the parties upon this appeal, to which I will come in due course, seem to me to also to substantially accept the accuracy of the Arbitrator’s summary.)
The respondent was employed by the appellant as a process control supervisor, a position he had held for about five years at the relevant time. Another employee of the appellant, whom I will refer to as Ms AU, was a trainee administration officer.
They had a telephone conversation on 15 November 2017, and on the next day Ms AU made a complaint about the telephone conversation to her immediate superior, Karen Gunthorp.
Ms Gunthorp’s evidence was that Ms AU told her that the telephone conversation the preceding day upset her. The initial part of it concerned a business matter and was businesslike, but Ms AU told Ms Gunthorp that thereafter the respondent carried on with the discussion telling her how pretty she was, that she could do better than her boyfriend, and that his workmates at the Bomaderry Depot talk about her all the time and drool over her all the time and think she’s gorgeous. The conversation was said to continue in that vein in a more blunt or basic fashion on the part of the respondent which it is not necessary to repeat in detail here, but which involved a particular expression “… blowing smoke up your arse …”. Ms AU said that the conversation was quite a lengthy one, occupying about 22 minutes, and that it concluded when the respondent asked her whether he was making her feel uncomfortable and got an affirmative reply. The respondent then said “I hope I won’t be up for a sexual harassment charge”.
Ms Gunthorp told Ms AU that the matter would need to be reported up the line so to speak to their manager, Mr McVey. He was located and Ms AU repeated to him what she had conveyed to Ms Gunthorp. Mr McVey was the appellant’s Water Maintenance and Operations Section Manager and the “line manager” both for the respondent and Ms AU.
Mr McVey expressed the view to Ms AU that the behaviour on the part of the respondent she had described was “unacceptable”, and passed the information on to Ms Carmel Krogh, the appellant’s “director”. Ms AU was present and repeated her account of the telephone discussion, whereupon Ms Krogh contacted the appellant’s Human Resources Department in effect for advice.
It seems that it was determined that the respondent should be notified that a complaint had been made against him and that he should have no contact with Ms AU until it had been investigated.
Thereafter the respondent’s immediate supervisor, Peter Richardson, was contacted and asked to arrange a meeting at which the respondent would be so informed.
That duly happened. Mr McVey went to the area of the appellant’s premises where the respondent worked and spoke to him in a vacant office. Mr Richardson was present. When he told the respondent the complaint, he said that the respondent became “visibly upset”, and commented that he had told Ms AU that she could do better than her boyfriend but did not “… say that that better person should be me”.
There was no dispute that the respondent was not offered the assistance of a support person at the meeting, and that he was not told that such assistance was available through the Employee Assistance Program. Mr McVey said that the discussion was an initial one to let him know that the complaint had been made and that it was being followed up. At least Mr McVey did not regard it as the type of meeting, a “dispute meeting”, which usually involved two days’ notice and the offer of a support person.
On 6 December 2017, a meeting took place involving Mr Richardson, Amanda Crangle and Lukas Winton, who were employed in the appellant’s Human Resources Department. Mr Richardson expressed surprise that the respondent had been the subject of the complaint. He went on in his evidentiary statement to say that he had attended the meeting between Mr McVey and the respondent on the afternoon of 16 November 2017 and that Mr McVey had told the respondent that the complaint was a serious one but at that stage there was no decision that had been taken to suspend him or stand him down. Mr Richardson’s observation of the respondent’s reaction was that the respondent “was shattered”.
Commenting upon the fact that the respondent had not been offered access to the Employee Assistance Program at the time of the discussion on 16 November 2017 he said: “I can’t recall it being mentioned. I know I did not mention it to him and should have.”
As part of the investigation, a workmate of Ms AU, Mr Shane Kimber, was interviewed and he said that on 16 November 2017 Ms AU informed him of the telephone conversation between her and the respondent the previous day. His account of what Ms AU told him was completely consistent with what she passed on to Ms Gunthorp, but included a further comment that she had spoken to her employees who describe the respondent differently from the way Mr Richardson described him as regards as personality.
Another employee of the appellant, Mr Ross Ewing, was interviewed as part of the investigation. His evidence was that he did not know of any similar behaviour on the part on the respondent before the telephone conversation which was the subject of the complaint and his experience of the respondent’s personality was in effect the same as Mr Richardson’s and inconsistent with information obtained by Ms AU when she spoke to other people because of her concern about what the respondent had said to her over the telephone.
The investigation involved meetings of relevant personnel of the appellant on 5 and 6 December 2017 of which minutes were kept and during which statements were taken.

SUBMISSIONS BEFORE THE ARBITRATOR

Upon the evidence counsel for each party addressed the Arbitrator about whether the appellant had discharged its onus pursuant to s 11A of the Act. These submissions were made against the background of authority. The first decision was that of the Court of Appeal in Northern NSW Local Health Network v Heggie[1] at [59]. The Arbitrator accepted, and I think it is fair to say that both counsel accepted, that that case stands for the proposition that “action with respect to discipline” is a broad expression which can extend to the entire process involved in disciplinary action, including preliminary stages in the course of an investigation. The significance of that is that the meeting involving Mr McVey, Mr Richardson and the respondent in the empty office at the respondent’s work location on 16 November 2017 is within the concept of “action with respect to discipline”.
[1] [2013] NSWCA 255.
The other decision cited by the Arbitrator was the decision of Geraghty J in Irwin v Director General of Education.[2] It will be necessary to return briefly to that decision.
[2] Compensation Court of NSW, Geraghty CCJ, 18 June 1998, No 14068 of 1997, unreported (Irwin).
Inevitably, counsel for each party argued that what had happened involved unreasonable conduct (the respondent) or reasonable conduct (the appellant).
The substance of the appellant’s argument was that the meeting of 16 November 2017 was reasonable. The starting point for the argument was that the respondent had to be informed at some stage of what had happened and what might follow, and that was done realistically and appropriately. It was nothing more than putting the employee concerned on notice. There was no indication of anything more than a complaint to be followed by an investigation.
The position taken for the respondent was that it was unreasonable to impose at short notice upon the respondent a meeting with two superiors and to mention something like “sexual harassment” or “a serious matter”. Such expressions could carry a connotation of a conclusion or determination as to the nature of the conduct. In such circumstances the respondent ought to have been offered the option of a support person or recourse to the Employee Assistance Program. It was further submitted that despite the respondent’s immediate and obvious distress at what was conveyed to him, no such assistance was then offered.
For the respondent reliance was also placed on one of the appellant’s documents that was in evidence, entitled “Managing Disciplinary Matters”. Para 2 of this document reinforced the requirement of notice before “formal discussion” and of the entitlement to a support person “before during and after any formal discussions”. The “adjective” “formal” in relation to “discussions” calls into question the nature of the first mention of Ms AU’s complaint to the respondent by Mr McVey in the presence of Mr Richardson, but this does not seem to have been made the subject of a finding by the Arbitrator. Clearly the appellant was contending that it was informal, and upon that view the document as to management of disciplinary matters would lose its impact, assuming it had any. I think it is fair to say that the Arbitrator did not base his decision on any consideration of this kind.
It was specifically put to the Arbitrator on behalf of the respondent that it was inappropriate for Mr McVey to be involved because he was partisan, and that he ought not to have said that the complaint was “serious” and that it involved “sexual harassment”. Rather, the respondent should simply have been told exactly what the words complained of according to Ms AU were without being characterised in any way. In this specific context, reference was made to the fact that Ms AU did not know the slang meaning of the expression “blowing smoke up your arse”.
As regards the Employee Assistance Program, the appellant pointed to the fact that its workers knew of it and of the availability of support through it.

THE ARBITRATOR’S REASONS

In para [58] of his reasons the Arbitrator set out a passage from the judgment of Geraghty J Irwin (supra), which I think is worth repeating here:
“… The question of reasonableness is one of fact, weighing all the relevant factors. That test is less demanding than the test of necessity, but more demanding than the test of convenience. The test of ‘reasonableness’ is objective and must weigh the rights of employees against the object of the employment. Whether an action is reasonable should be attended, in all the circumstances, by questions of fairness....”
After considering the parties’ submissions, the Arbitrator in paras [59]–[68] of his reasons,[3] made the following critical findings:
[3] Booth v Shoalhaven City Council [2019] NSWWCC 103 (Reasons).
(a)    Mr McVey was not partisan and was not an inappropriate person to provide the preliminary notification to the respondent that he did. He was the head of the department which contained both Ms AU and the respondent. It was preferable that someone the respondent knew “… should impart the unwelcome news … rather than someone from the Human Resources Department …” unknown to the respondent. (Para [59]).
(b)    It was not unreasonable for the respondent to be notified of the complaint in a face to face meeting with his immediate line manager, Mr Richardson also present. This was preferable to the alternatives discussed earlier in the Arbitrator’s reasons, namely a telephone call, email or letter, which may have reached the respondent “… when he was on his own and feeling cut off or unsupported”. (para [60]).
(c)    It was unfair for Mr McVey to describe words alleged to have been used by the respondent as passed on by Ms AU as “sexual harassment” or to label the complaint as “serious”, in effect at the early first-notification stage of the process. Fairness required that the respondent be informed that there had been a complaint and that he be told of the words alleged to have been used that were said to constitute the alleged harassment (presumably on the basis that that characterisation would be assigned to the words later if at all). It was important that Ms AU may not have understood the expression “blowing smoke up your arse” in the way the respondent understood it and intended it. (para [61]).
(d) Para [62] reinforced the foregoing: the better course would have been to notify the respondent in the meeting that a complaint had been made and to set out the words complained of rather than summarising them as a complaint of “sexual harassment” which was regarded as “serious”. Then in paras [63]–[64], by reference to the appellant’s policy document “Managing Disciplinary Matters”, adverted to above in paragraph [23] there was no reason why the meeting of 16 November 2017 could not have been delayed for a short time to enable the respondent to obtain the assistance of a support person at the meeting. (para [65]).
(e)    The distress of the respondent, observed by Messrs McVey and Richardson at the meeting, should have led Mr McVey to inform the respondent that assistance was available, this being something that Mr Richardson realised afterwards should have been done. (para [66]).
(f)    Knowledge of the existence of the Employee Assistance Program that the respondent had probably acquired in the course of his employment with the appellant could not, in effect, substitute for the requirement of fairness that he be reminded or re-informed on the afternoon of 16 November 2017. Such prior knowledge would not easily be recalled by someone “shattered”. (para [67]).
(g)    Accordingly it was not fair:
(i)To call the respondent to a meeting of the type involved without a support person;
(ii)To categorise the complaint as “sexual harassment” and a “serious matter” to the respondent when there was no requirement to do other than inform him that a complaint had been made and inform him of the words complained of, and
(iii)To fail to draw the attention of the respondent to assistance available through the Employee Assistance Program “… retirement [sic] he was visibly emotionally disturbed.” (para [68]). (I take the obvious error in the use of the word “retirement” in para (c) to obscure what the Arbitrator probably intended, namely that the respondent should have been informed of an entitlement to support before the meeting began and, failing that, certainly as soon as he displayed distress.)
In each of these ways the action of the appellant was not reasonable and the defence under s 11A of the Act is not made out.

THRESHOLD MATTERS

There is no dispute that the threshold requirements of s 352(3) and (4) of the Workplace Injury Management and Workers Compensation Act 1998 have been met.

ON THE PAPERS

The parties are in agreement that this appeal may be dealt with “on the papers”. My own consideration of the material before the Arbitrator and now before me satisfies me that this is a proper approach.

FRESH EVIDENCE

Neither party sought to lead fresh evidence upon the appeal.

ISSUES IN DISPUTE

As appears from the foregoing, the sole issue in dispute is whether the Arbitrator was correct upon the evidence to hold that the appellant had not discharged the onus of proof upon it of showing that the conduct which caused the respondent’s injury was reasonable within the meaning of s 11A.

GROUNDS OF APPEAL

The grounds of appeal advanced by the appellant are the following:
(a)    In determining the reasonableness of the actions of the appellant, the Arbitrator failed to ask himself and in turn consider, the appropriate questions as to the reasonableness of the actions.
(b)    The Arbitrator failed to place due consideration or any weight on the employer’s rights and responsibilities to ensure a safe work place.
(c)    The Arbitrator utilised hindsight reasoning in the course of considering the initial notification process, and in doing so placing undue weight on that hindsight interpretation.
(d)    The Arbitrator erred in finding that the three factors (para [68] of his reasons) were not fair and in doing so he applied the incorrect test.

SUBMISSIONS AND DISCUSSION

After a preliminary and accurate comment that there was considerable interaction between these grounds, the appellant’s submissions set out in para 1.7 the questions it was contended the Arbitrator ought to have asked himself. These questions were as follows:
“1.7.1. Was it reasonable for management to interview [Ms AU] to ascertain her version of events in 16 November 2017?
1.7.2. Was it reasonable for management, having been satisfied initially of the version of events (having [Ms AU] provide a consistent version of events) to contact HR to discuss the next steps?
1.7.3. Was it reasonable for management to commence an investigation into the formal complaint?
1.7.4. Was it reasonable for management to follow Council policy with respect of complaints?
1.7.5. Was it reasonable for management, at the earliest possible time to advise the worker of the complaint?
1.7.6. Was it reasonable for management to have a private initial notification meeting in a separate room with the worker and a supervisor?
1.7.7. Was it reasonable during that initial notification meeting to advise the worker that there was a complaint made against him?
1.7.8. What was said within the meeting between all the parties?
1.7.9.Was the length of time of the initial notification meeting reasonable?
1.7.10.Was it reasonable to not specifically advise that the worker could have a support person at the informal notification meeting?
1.7.11.Was it reasonable to not inform the worker of the employer assistance program?”
With all respect I do not think it can be said that the Arbitrator’s reasons show that he did not consider the import of these questions. The substance of his reasons show that that he did not think that there was any legitimate criticism of the appellant except in respect of the matters dealt with in 1.7.10 and 1.7.11 in this para of the appellant’s submissions. They concern whether the respondent could have been told he could have a support person present on the afternoon of 16 November 2017 and should have been informed of the Employee Assistance Program. The Arbitrator’s finding against the appellant on both these matters shows that he did consider these very questions.

The appellant properly placed reliance on the passage from the reasons of Geraghty J in Irwin (supra), but there can be no doubt that the Arbitrator was conscious of that passage. Part of any employer’s responsibility is even-handed dealing with all employees, and Ms AU’s complaint required proper attention both in itself and to demonstrate that employees in her position and generally would be given respect and support where needed. This was not an issue in the case. Her complaint was taken up and it was the way in which it was taken up after it effectively left her which was the critical question. Ground 2 clearly takes up the employer’s rights and responsibility to ensure a safe work place. This obviously includes respecting and supporting, as appropriate, employees who are complaining about fellow employees. The appellant draws attention to the policy document which the Arbitrator dealt with and stresses that the appellant followed its established policies. So much maybe accepted, but the detail of how the afternoon meeting of 16 November 2017 was found against the appellant by the Arbitrator is not in any way vindicated by the policy document.
Ground 3 of the appellant’s submissions criticises the Arbitrator for the use of hindsight in his consideration of the initial meeting in which the respondent was notified of Ms AU’s complaint. In this regard I think two things may shortly be stated. First, any decision considering past events is employing hindsight. To do that is not to fall into error. Secondly, in a rough analogy to the approach necessary in a negligence action in which the decision maker must place himself or herself in the position of the defendant before the injury or damage is occasioned, and consider what reasonable foresight would require to avoid or minimise such adverse consequences, it may be accepted that in this case the appellant through its responsible officers ought to have looked at what might happen as a result of the meeting with the respondent on 16 November 2017 on the basis of how they intended to conduct it or how they were conducting it at the time. They certainly could not have had the benefit of some sort of deja vu as to what was to happen. But this is of no vital importance here. It may be accepted that Mr McVey had no intention to cause harm to the respondent and did not think he would do so. The critical point is that the Arbitrator held that there were other and better ways of going about what was undertaken which would have carried with them fairness, and that what was done was not reasonable. This is to look at what was going on as the events were unfolding, undoubtedly in 2019 rather than on 16 November 2017, but it is not impermissible use of hindsight.
It was implicit in the appellant’s submissions that since, according to Ms AU, he had himself used the expression “sexual harassment” at the conclusion of their telephone conversation, the use of that expression by Mr McVey had to be regarded as reasonable and that in any event, given that an enquiry into the complaint was necessary, it simply had to be embarked upon and the preliminary meeting was unavoidable. That was an indication of reasonableness. There is obvious substance in these considerations, but the circumstances of the meeting on 16 November 2017 were different from the telephone conversation the day before which impelled the meeting. The Arbitrator’s conclusion, which can be taken from his reasoning and findings, that a preliminary meeting of a completely neutral kind was the reasonable approach, answers these considerations.
Ground 4 attacks the three factors set out in para [68] of the Arbitrator’s reasons which were individually said to involve unfairness and thus unreasonableness. The basis for this criticism is elaborated in para 4.3 of the appellant’s written submissions:
“4.3 Further, even if the test of reasonableness did factor for consideration whether the conduct was ‘fair’ (or not), the circumstances of the matter, it was not open for the arbitrator to find that the conduct (being the failure to advise of a support person and to latter advise of the EAP) was not unfair in circumstances, where:
4.3.1.The worker knew of the existence of the EAP program (at AALD Page 5, signed by the worker at page 10).
4.3.2.The worker would have on a day to day basis observed the EAP information (at AALD page 39).
4.3.3.The meeting itself went for less than 5 minutes. (see workers report to Dr Smith at reply 113 pp 20).
4.3.4.The employee left the employers premises at his own volition (following 5 minutes conversation) without allowing further conversations with management. That is, there was not an opportunity to advise in the context of the brevity of the initial notification, of the EAP.
4.3.5.The worker was advised of the EAP on the next available opportunity.”
They come down to pointing out that the workforce had knowledge in any event of the Employee Assistance Program, that the meeting involving Mr McVey, Mr Richardson and the respondent occupied less than five minutes, that the respondent left his workplace at his own instigation immediately following the meeting so that there was not thereafter an opportunity to tell him about the Employee Assistance Program, and he was in fact told of it at the next available opportunity.
Prior knowledge on the part of the respondent of the Employee Assistance Program was squarely dealt with by the Arbitrator and the way he did so is not engaged by the appellant’s submissions in respect of this ground, which seem to me to be a re-run of its first instance submissions without more. Moreover the length of the meeting does not rationally seem to call into question the Arbitrator’s findings. It is difficult to gainsay the proposition that the respondent could have been offered support before the meeting began and that immediately his distress was seen something could have been said before it was allowed to come to a close or before he left. In short I would not regard the appellant’s grounds of appeal and written submissions in support thereof as seriously calling into question the Arbitrator’s reasons.
I do not think it is necessary to deal other than in passing with the respondent’s submissions. They support the Arbitrator’s reasoning according to its terms and repeatedly make the point that the appellant’s arguments either or both repeat what was put to him and do not grapple with his findings and demonstrate error in them.
In what appears in paragraphs [35]–[41] above I have made some comments and expressed some views which are indicative of my overall conclusion. What follows should be read in conjunction with them.
In my opinion the appeal must fail. The Arbitrator’s decision was a factual one, in that he took a view of what had undoubtedly happened when called upon to determine whether it was reasonable or not. I can see no error in his decision. I have reached that view after directing my myself in accordance with the decision of Roche DP in Raulston v Toll Pty Limited.[4] Although it may be acknowledged that the reasonableness of what was done by the appellant is something upon which minds could differ and that another Arbitrator may have taken a different view, there is in my opinion no basis for saying that the particular view taken by the Arbitrator in this case was wrong. Not only was it fairly open, there was nothing in the evidence as he evaluated it which he failed to consider or take account of which could be said to have amounted to a factor or factors which must have displaced his evaluation. I feel no “actual persuasion” that he was wrong.
[4] [2011] NSWWCCPD 25; 10 DDCR 156.

CONCLUSION

Accordingly the appeal should be dismissed and the determination of the Arbitrator confirmed.

ORDER

The Arbitrator’s Certificate of Determination of 13 March 2019 is confirmed.

Larry King SC

ACTING DEPUTY PRESIDENT

9 September 2019