South Eastern Sydney and Illawarra Area Health Service v Nikolis - [2009] NSWWCCPD 74

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:		South Eastern Sydney and Illawarra Area Health Service v Nikolis [2009] NSWWCCPD 74
APPELLANT:		South Eastern Sydney and Illawarra Area Health Service
RESPONDENT:		Anna Sladjana Nikolis
INSURER:		Employers Mutual Limited
FILE NUMBER:		A1-8734/08
ARBITRATOR:	Mr B McManamey
DATE OF ARBITRATOR’S DECISION:		17 March 2009
DATE OF APPEAL DECISION:		3 July 2009
SUBJECT MATTER OF DECISION:		Psychological injury; section 11A of the Workers Compensation Act 1987; performance appraisal; discipline; reasonable action
PRESIDENTIAL MEMBER:		Deputy President Bill Roche
HEARING:		On the papers
REPRESENTATION:		Appellant:	DLA Phillips Fox
Respondent:		Turner Freeman
ORDERS MADE ON APPEAL:		The Arbitrator’s determination of 17 March 2009 is confirmed.
The appellant employer is to pay the respondent worker’s costs of the appeal.

BACKGROUND

The worker, Ms Nikolis, alleges that she sustained a psychological injury in the course of her employment with the appellant (‘the Health Service’) as a result of being harassed and bullied by her manager between 19 June 2006 and September 2007.

The Health Service denied liability upon the following grounds:

(a)     no harassment or bullying took place;
(b)     Ms Nikolis did not suffer a psychological injury as a result of, or arising out of, her employment;
(c)     if Ms Nikolis suffered a psychological injury, her employment was not a substantial contributing factor to that injury;
(d) if Ms Nikolis received a psychological injury, the injury was wholly or predominantly caused by reasonable action taken by it with respect to either performance appraisal or discipline within the terms of section 11A of the Workers Compensation Act 1987 (‘the 1987 Act’), and
(e)     the extent of Ms Nikolis’ incapacity.

By an Application to Resolve a Dispute (‘the Application’) registered in the Commission on 31 October 2008, Ms Nikolis sought weekly compensation in the sum of $1,154.00 from 14 September 2007 to date and continuing as a result of a psychological injury allegedly sustained due to the nature and conditions of her employment with the Health Service. The Application described her injury as “psychiatric injury; chronic adjustment disorder with depressed and anxious mood”.

The matter was heard before a Commission arbitrator on 4 and 18 February 2009. In a reserved decision delivered on 17 March 2009, the Arbitrator found in favour of Ms Nikolis on all issues. The Certificate of Determination issued on 17 March 2009 records the following orders:
“The Commission determines:
1.Respondent to pay $654.00 per week from 14 September 2007 to 16 March 2008, $624.40 per week from 17 March 2008 to 31 March 2008, $636.60 per week from 1 April 2008 to 30 September 2008 and $647.60 per week from 1 October 2008 to date and continuing as adjusted.
2.Respondent to pay s60 expenses.
3.Respondent to pay the Applicant’s costs as agreed or assessed. I certify that the matter is complex and that both parties are entitled to an uplift of 30 percent.”

By an appeal filed on 21 April 2009, the Health Service seeks leave to appeal the Arbitrator’s determination.

LEAVE TO APPEAL

Monetary Threshold

Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).

There is no dispute that the monetary thresholds in section 352(2) of the 1998 Act are satisfied.

Time

The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.

I grant leave to 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 Numbers 1 and 6, the documents that are before me, and the submission 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.

FRESH EVIDENCE

‘Fresh evidence’ on appeal is governed by section 352(6) of the 1998 Act, which provides as follows:

“(6)Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.”

The Health Service seeks to tender, as fresh or additional evidence on appeal, “a copy of the policy for Sick Leave Management which supports the actions of the employer in dealing with the worker in this matter”. It has made no submissions in support of its application and has offered no explanation as to why the evidence was not tendered at the arbitration or why the evidence should be admitted on appeal. In its submissions in support of the appeal, it makes the following point (at paragraph 23):

“…there is clear evidence that there were performance issues throughout the period and these are highlighted in the factual evidence attached to the original proceedings. In further support, the appellant employer now also provides a copy of the sick leave management policy of the employer, which clearly demonstrates the formal procedure for dealing with this issue.”

As the Health Service’s solicitor has made no effort to identify the relevance of the “policy for Sick Leave Management” and has not referred to any particular part of the additional evidence that it says is relevant to the issues in dispute, I have found this submission unhelpful. The additional evidence sought to be tendered and described by the Health Service’s solicitor as “the policy for Sick Leave Management” is actually two documents. The first is named “Disciplinary process – management of” and the second is named “Leave matters – Sick Leave – management of”.

The evidence clearly establishes (see [65 (j) and (r)] and [73] below) that the Health Service did not regard any of the meetings with Ms Nikolis as relating to discipline or as part of a disciplinary process. In these circumstances, the document is irrelevant to the issues in dispute and it is not in the interests of justice that it be admitted into evidence on appeal and I decline to admit it.

The second document relates to the “management” of sick leave. Its contents do not suggest that the management of sick leave is a matter that comes within either discipline or performance appraisal. It merely notes that a worker with an unsatisfactory sick leave record (one who has had eight separate absences in any period of 12 months) should be counselled and provided with an opportunity to discuss their absences with their manager. If anything, this supports Ms Nikolis’ argument that the relevant conduct was not with respect to performance appraisal.

The second document also attaches three precedent letters it is recommended be sent to a worker with a poor attendance record. The first two letters talk about “monitoring” and make no reference to performance appraisal or discipline. The third letter talks about the need for medical certificates to be produced and refers to consideration of disciplinary action should there not be a sustained improvement. In these circumstances, the document adds nothing to the Health Service’s case and it is not in the interests of justice that the document be admitted into evidence on appeal and I decline to admit it.

Parties in general, and the Health Service’s solicitors in particular, are reminded yet again (see NSW Police Force v Kearns and Anor [2008] NSWWCCPD 29) that arbitrations are not a trial run where the parties can await the result and then seek to tender on appeal evidence that could have been tendered at the arbitration.

THE EVIDENCE

Ms Nikolis’ Evidence

Ms Nikolis was born in Austria in 1970 and came to Australia when she was just one month old. She moved to Yugoslavia in 1979. In approximately 1987 she qualified as a laboratory technician majoring in biochemistry and molecular biology. She completed further studies between 1987 and 1989 and returned to Australia in May 1990 where she obtained a laboratory management/laboratory operations certificate in 1991. After studying part-time at the University of NSW between 1992 and 1996, she obtained teaching credentials that qualified her to teach primary school pupils in all subjects.

Over the years she has completed several other non-degree courses.

From December 1992 until 18 June 2006, Ms Nikolis worked with the South Western Area Pathology Service at Bankstown Hospital as a technical officer. Her duties involved biochemistry and haematology and operating various analysers as well as manual blood testing. Throughout this period she took three periods of maternity leave, the last being from February 2005 to February 2006.

From August 2005 until October 2006, she worked part-time with Diagnostic Services Australia. This work involved one or two weekend days or weeknights per week and involved authorising blood results. She considered it an easy job as she sat down for the majority of the shift while acting like a supervisor or consultant. She states that she resigned in October 2006 so she could spend more time with her family.

On 1 June 2006 she was approached by Sudha Pillai and offered a permanent full-time position with the Health Service, which she accepted. She resigned her position with South Western Area Pathology Service and commenced with the Health Service on 19 June 2006. Although her new position was with a new department, she states that all her entitlements were transferred as it was regarded as a continuation of her previous service. Her new position was that of a technical officer and she commenced on a three-month probation.

On her first day with the Health Service, Mr Pillai asked if she intended to keep her job at Diagnostic Services Australia. Ms Nikolis replied that she was still working a couple of nights and asked if that was a problem. Mr Pillai allegedly replied, “no, I don’t care what you do in your own time” (Ms Nikolis’ statement 5 October 2007, paragraph 67).

On 4 July 2006 Ms Nikolis heard a co-worker, Peter Berris, say to Mr Pillai that it wasn’t fair that he (Mr Berris) hadn’t been advised that another worker, Shazia Haque, would be late for work. Ms Nikolis said to Mr Pillai that she was surprised that Mr Berris did not know that Ms Haque would be late. Mr Pillai replied in what Ms Nikolis describes as a threatening voice and said, “Stay out of it. Don’t get involved” (Ms Nikolis’ statement 5 October 2007, paragraph 104). Ms Nikolis states that after this incident Mr Pillai did not acknowledge her in the mornings though before this he would greet her in a friendly manner.

On 11 July 2006, Ms Nikolis telephoned Mr Pillai and said that she would be 10 to 15 minutes late because her children were sick and she had to go to the chemist. She arrived at work at 8:10am, her normal starting time being 8am.

On 12 July 2006, Ms Nikolis signed in at 8.05am. Later that day she approached Mr Pillai to apologise for being late. He allegedly said that it wasn’t acceptable for her to be late. She said that Ms Haque mentioned that she (Ms Haque) was always late and as long as time is made up at the end of the day it was okay. After mentioning Ms Haque to Mr Pillai, he allegedly replied, “That is not your business. Even though I think her excuse isn’t good enough it is still none of your business. Being late doesn’t go for you. I don’t care for your reasons. I am not interested” (Ms Nikolis’ statement 5 October 2007, paragraph 121). It appeared to Ms Nikolis that she was being discriminated against and she was trembling and felt like she was going to burst into tears.

Between 18 and 21 July 2006, Ms Nikolis’ daughter was hospitalised and she took three days carer’s leave and one day from her “ADO”. She returned to work on 24 July 2006. As she was returning from morning tea she saw Mr Pillai and mentioned that her daughter had been in hospital. He allegedly said, “Yes, yes. I am looking into extending your probation. Just in case something happens they will say I didn’t do anything. I will see into it” (Ms Nikolis’ statement 5 October 2007, paragraph 127). On enquiring what he meant, he allegedly said he wanted to make sure there was no chronic illness or pattern of illness. On returning to the laboratory, Ms Nikolis began to cry and explained to Mr Berris what had happened.

On 1 August 2006, Mr Berris told Ms Nikolis that Mr Pillai had been inquiring as to what time she left for tea and lunch. Mr Pillai allegedly also asked other staff members about Ms Nikolis’ “whereabouts and times” (Ms Nikolis’ statement 5 October 2007, paragraph 133).

On 2 August 2006, Ms Nikolis again phoned Ms Haque to say that she would be 30 minutes late because she was not feeling well. She arrived at work at approximately 8.30am and Mr Pillai allegedly approached her and said that it wasn’t acceptable that she was late. Later that morning she approached Mr Pillai in his office to explain that she had phoned Ms Haque to explain that she would be late that morning. He allegedly replied, in a loud voice, “Stop! I don’t want to hear it. Nobody told me that you phoned. I don’t care to hear your excuses as you are on probation. I told you earlier I will look into extending your probation” (Ms Nikolis’ statement 5 October 2007, paragraph 140). Ms Nikolis regarded failing probation as the equivalent of dismissal. It would go on her record and, in her view, could have easily meant the end of her 16-year career.

Mr Pillai allegedly said (on 2 August 2006) that he was not impressed, as other staff had children and they did not seem to “be as sick as your kids. Your kids seem to have some kind of chronic illness” (Ms Nikolis’ statement 5 October 2007, paragraph 145). Ms Nikolis said that it was not fair to involve her children. She was agitated and added “Do you want me to provide you with a letter stating that I don’t have any chronic illness.” Mr Pillai replied “Yes, I need to know if you or your family have some kind of chronic illness as that will make a difference in whether you will be offered permanent employment” (Ms Nikolis’ statement 5 October, paragraph 146). Both parties made further comments and Ms Nikolis left the office feeling tearful. She felt discriminated against because of her family responsibilities. At about this time she noticed that Mr Loizou, her immediate supervisor, with whom she regularly had morning tea, stopped inviting her to have morning tea with him. That night Ms Nikolis went home from work very stressed and crying. She did not sleep well and had recurrent dreams that Mr Pillai was chasing her with a piece of paper to sign.

The next day (3 August 2006) she felt sick as a consequence of the previous day’s exchange with Mr Pillai, but she still went to work though she vomited a few times in the toilet. Mr Loizou commented that she did not look well and directed her to do some filing. She did that until about 10.30am when she said that she felt sick and needed to go home but requested that Mr Loizou tell Mr Pillai, as she could not bear to see his reaction.

On 15 August 2006, Ms Nikolis telephoned Mr Berris and advised that she would be late. Both Ms Nikolis and Mr Loizou arrived at the same time, about 10 minutes late. Ms Haque was also late on that day and arrived at 8.30am, 30 minutes late. Later that day Ms Nikolis told Mr Loizou that she needed to be about 10 minutes late for a couple of days so she could drop off her children at school. He allegedly gave approval for that. She asked Mr Loizou if there was anything wrong because he had been acting coldly towards her. He replied that he was not feeling comfortable because Mr Pillai had been “pressuring me about you.”

Ms Nikolis was five minutes late on 4 September 2006, but generally arrived at work 5 to 15 minutes early and most of the time stayed back for 5 to 15 minutes.

On Friday 25 August and Monday 28 August 2006, Ms Nikolis was unwell with a chest infection and provided Mr Pillai with a medical certificate to that effect.

On 30 August 2006, Ms Nikolis experienced an abnormal bleeding episode before she went to work but she felt obliged to go to work as Mr Pillai had already made it clear that her probation was in danger and he suspected that she had some chronic illness. On arriving at work, she experienced a significant blood loss and used her mobile phone to contact her local doctor, Dr Marinkovich, a couple of times in the laboratory and once in the toilet. Dr Marinkovich said he would fax her a referral to Dr Hammill, gynaecologist, and that he did not think that she should remain at work. Ms Nikolis reported her problem to Mr Loizou and said that she did not want to inform Mr Pillai because she was “scared to tell him”. She stayed at work until 5.15pm and then visited Dr Hammill who gave her a certificate stating that she had had “a PV bleed for two days” though she had not taken any time off work. She handed the certificates to Mr Loizou and she saw him hand them to Mr Pillai.

On 5 September 2006, Ms Nikolis received a letter from Mr Pillai who said to her “your probation is coming to an end, I tried to extend your probation but I can’t instead I am setting up a formal meeting with you and Peter Loizou. We will attach the minutes of the meeting to your probationary report so that I can cover myself if I need to deal with you in the future” (Ms Nikolis’ statement 5 October 2007, paragraph 165).

On 6 September 2006, Ms Nikolis attended a meeting with Mr Pillai, Mr Loizou, and David Carr, her support person. Mr Pillau stated that her attendance, punctuality and mobile phone usage were a concern. Ms Nikolis disputes the accuracy of the minutes taken at this meeting. She disputes that she said “I was on the mobile a lot last week as I had some gynaecological problem…” and asserts that she only used her mobile phone when she was experiencing bleeding on 30 August 2006. She felt insulted because she had already given Mr Pillau a certificate relating to the bleeding to explain why she used her mobile phone.

Later in the day, Mr Pillai called Ms Nikolis into his office. She said that she did not feel comfortable talking to him alone behind closed doors and she asked him why he wanted to have formal meetings with her and not with other members of staff. She said that she thought he was hard and unjust towards her and that it was common practice for staff to be late. She found the meeting to be unfair and unjust and that it was unfair to attach the minutes of the meeting to her probationary report. Mr Pillai allegedly replied, “If you want to push that one, I will be forced to start making phone calls to Bankstown and find out all about you” (Ms Nikolis’ statement 5 October 2007, paragraph 181). Ms Nikolis stated that Ms Haque was late nearly every day and Mr Pillau allegedly screamed “How dare you keep records of other people being late and that is discriminating, harassment and bullying by you and I can report you for that” (Ms Nikolis’ statement 5 October 2007, paragraph 182). Ms Nikolis replied that he was the one doing the discrimination, harassment and bullying against her. She was under constant stress and felt she needed medication to calm down. As she was leaving his office he allegedly yelled “I will get HR involved.” Ms Nikolis states that since the meeting on 6 September 2006 she was never late and was generally 5 to 15 minutes early. She felt that other staff members were avoiding her and that she wasn’t invited to morning tea or to socialise.

Ms Nikolis was next off work on Friday 13 and Monday 16 October 2006 because one of her children was ill. She provided a certificate and took carer’s leave. Normally when her children were sick her mother would care for them, but on this occasion her mother was also unwell.

Ms Nikolis was next off work on 30 October 2006 when her children and her mother were ill. She obtained a letter from her doctor saying that she would have to stay at home until 7 November 2006, though she in fact returned to work on 2 November 2006. When she phoned Mr Pillai he said that she would not be paid as she was out of sick leave. She stated that she should be able to access carer’s leave out of her annual leave. Mr Pillai said that he would not pay her annual leave in lieu of carer’s leave as he had been told by HR that he could not do so because he had to keep a true record of her sick leave. The following week Ms Nikolis contacted Human Resources and was advised that she could access annual leave in lieu of carer’s leave.

On 9 November 2006, Ms Nikolis was informed that her most recent leave had been recorded as unpaid sick leave. This upset her because Mr Pillai knew that she was off on carer’s leave as stated on the medical certificates. On 10 November 2006, Sue Smith, second in charge of the department, confirmed that she had spoken to Martin Majewski at Human Resources and the records would be amended to change the sick leave to annual leave. Ms Smith said, “Martin [Majewski] understood Sudha as saying that you were sick” (Ms Nikolis’ statement 5 October 2007, paragraph 202). Ms Nikolis felt that Mr Pillai had deliberately not provided accurate information to Mr Majewski so that sick leave would be incorrectly entered and give her a bad record. This incident created an environment of mistrust and she felt unsafe and that she needed to watch her back. She was having frequent disturbed dreams and worried about Mr Pillai’s reaction to everything she did. She felt unwell and fatigued when she was at work (Ms Nikolis’ statement 5 October 2007, paragraph 205).

On 20 or 21 November 2006, she began to get migraines. Her vision was impaired and she was vomiting and her eyes were sensitive to light. She visited Dr Marinkovich and discussed the difficulties she was having with Mr Pillai. Dr Marinkovich prescribed avanza and provided her with a medical certificate stating that she was unfit for four days. He also referred her for a CT brain scan, which was normal. He stated that he believed her migraines were directly related to stress at work.

On 8 December 2006, Ms Nikolis lodged a formal complaint about Mr Pillai to Maria Buric, senior human resources consultant, Professor Wilson, director of South Eastern Laboratory Services and Matthew Daly, clinical operations director.

On 11 December 2006, Mr Pillau handed Ms Nikolis a letter but said nothing to her. The letter requested that she attend a meeting on 14 December 2006 with Maria Buric, Mr Pillai and her support person, Tom Dolan. The minutes of the meeting state “Today’s meeting was not a disciplinary meeting but a formal meeting (that will be documented) to discuss Ms Nikolis’ excessive utilisation of leave (sick/annual/personal carer’s) and to ascertain whether SEALS Management can assist her by temporarily offering her part-time employment to assist with family commitments during this period” (Ms Nikolis’ statement 5 October 2007, paragraph 216). In respect of the leave taken on 30 October to 2 November 2006, Mr Pillai stated that he was not responsible for it being recorded as sick leave because he was on holidays. He also expressed concern that dates had been altered on medical certificates. In response, Ms Nikolis stated that one medical certificate had been altered to delete 31 October and insert 6 November 2006 so that that certificate was consistent with the four other certificates issued at that time, the doctor having made a mistake on that one certificate. Ms Nikolis was asked if she wanted to work part-time. Ms Buric enquired if Ms Nikolis was working in a second job to which Ms Nikolis replied that she was not.

On 21 December 2006, Ms Buric formally acknowledged receipt of the complaint against Mr Pillai. Later that day the worker told Ms Buric that she was very stressed, tearful and felt unsafe.

On 16 January 2007, Ms Nikolis was injured in a motor vehicle accident and was hospitalised for four days and off work until 19 June 2007 when she returned to work on two days per week from 9am until 3pm. The accident was initially treated as a workers compensation claim and liability was accepted on a provisional basis, but ultimately declined on 23 April 2007. On her return to work a co-worker told her that staff knew that she was not being paid workers compensation for the car accident. This upset her as she felt that there wasn’t any confidentiality regarding her workers compensation claim.

On 3 July 2007, Ms Nikolis contacted Ms Buric and said that she was upset because of the lack of confidentiality and Mr Pillai’s constantly negative attitude towards her. Ms Nikolis said that she felt stressed and was crying when she went home.

On 12 July 2007, Mr Pillai spoke to Ms Nikolis for the first time since she had returned to work after the car accident. He said that she had changed a result on a patient report and that the wording was not in the right order. Ms Nikolis said that her supervisor, Rosalie Gemmell, had instructed her to use the wording she used. Mr Pillai abruptly said, “I will let it go then, this time” (Ms Nikolis’ statement 5 October 2007, paragraph 232). Ms Nikolis interpreted his statement to imply that she had made a mistake and that he was a magnanimous forgiver. She felt humiliated as he made the statement in front of two other co-workers and made her out to be incompetent.

On 17 July 2007, Ms Nikolis approached Ms Buric and again explained that she felt unsafe at work.

On 23 August 2007, Ms Nikolic advised Ms Buric that Mr Pillai was still bullying her.

On 28 August 2007, another meeting was held with Mr Pillai, Ms Buric, and Kim Sewell, a union representative. Mr Pillai enquired if Ms Nikolis was still engaged in secondary employment. She said that she was not, but she may still be on the books with Interpreter Services and with Diagnostic Services Australia. She stated that other employees were working without formal written approval.

After the meeting, Ms Nikolis told Ms Buric that she could not continue working and that Mr Pillai’s hostility was starting to affect her work performance. She took a short break and returned to work but found her concentration was very poor and she was unable to continue. She left work 2 ½ hours early after telling Ms Buric that she was leaving and asking Ms Gemmell to tell Mr Pillai.

After leaving work, Ms Nikolis visited Dr Marinkovich who provided her with a medical certificate for one day off work and suggested that she seek treatment from Dr Selwyn Smith, consultant psychiatrist.

On 29 August 2007, Ms Nikolis presented the Human Resources Department with a summary of her grievance against Mr Pillai. Mr Pillai allegedly continued to intimidate Ms Nikolis even though he was not supposed to talk to her without a mediator.

On 14 September 2007, Ms Nikolis attended on Dr Smith who prescribed medication and gave her a WorkCover medical certificate stating that she was unfit for one month.

On 17 September 2007, Ms Nikolis wrote a letter to reactivate (though she did not consider it had been de-activated) her complaint about Mr Pillai and had it delivered to the Human Resources Department the following day.

On 24 September 2007, Ms Nikolis attended on Dr Smith who prescribed efexor and other medication. She felt in a continual state of anxiety, depression, and close to tears. She wasn’t sleeping well and had difficulty handling any noise from her children. She had difficulty concentrating and lacked self-confidence. She did not feel like leaving her house and had no social life. She also complained of headaches, hair loss, excessive sweating and periodic shaking.

Ms Nikolis provided a further statement on 17 September 2008. She remained under the care of Dr Marinkovich and Dr Smith. She continued to feel sad, moody, helpless, numb and empty. She had poor concentration and memory and had difficulty making decisions and thinking clearly. She constantly felt sick, fatigued, experienced headaches, nausea and stomach ache.

The Health Service’s Evidence

The Health Service relies on a factual investigation dated 18 October 2007 together with statements from Mr Pillai, Mr Loizou and Ms Buric.

Mr Pillai’s Evidence

Mr Pillai’s statement is dated 9 October 2007. At that time he was 60 years of age. He commenced employment with the Health Service in 1971 and has been working with the South Eastern Laboratory Services since 1992. As at 2007, he was the laboratory manager of the Department of Haematology at St George Hospital and was Ms Niklois’ manager, though Mr Loizou was her direct supervisor. When Ms Nikolis worked in the coagulation laboratory, Ms Gemmell was her direct supervisor, but Mr Pillai remained her manager. The Department of Haematology employs approximately 46 people.

He states that he relied on supervisors in the various departments to advise of any difficulties. Those supervisors came to him with complaints about Ms Nikolis’ attendance and, initially, her punctuality. He states that her attitude towards him had not been good and was bordering on harassment.

When she applied for the position, she disclosed that she had part-time employment with Diagnostic Services Australia, but he did not authorise her to continue that work. The issue was not discussed. Secondary employment must be authorised by the executive director. When interviewed, Ms Nikolis was advised that if she obtained a position she would have to undergo a three-month probationary period where her performance, attendance and punctuality would be monitored weekly. Ms Nikolis’ absenteeism was affecting the smooth operation of the laboratory. On advice from human resources, Mr Pillai was looking for a solution and trying to assist Ms Nikolis.

When Ms Nikolis advised that she had a doctor’s appointment for 27 June 2007, it was agreed that she would take one day’s annual leave because she had no sick leave that was transferred from Bankstown Hospital.
In respect of Ms Nikolis’ specific allegations, Mr Pillai states:

(a)     in respect of the incident when Ms Haque arrived late and Mr Berris had not been informed, Mr Pillai states that he did not have any discussions with Ms Nikolis about this matter and therefore did not speak to her in a threatening voice;
(b)     Mr Pillai’s practice when arriving at work was to say “Good morning, Blood Bank”, he never purposely did not greet Ms Nikolis;
(c)     he did not state that the 4 July incident (relating to Mr Berris not being told that Ms Haque would be late) was Ms Nikolis’ fault. He presumed that she would have told Mr Berris that Ms Haque was going to be late, as he told all staff that it is unacceptable to come in late every day and to make it up at the end of the day;

(d) on 12 July 2006, Ms Nikolis asked why he was monitoring her for three months when Ms Haque had been late 54 or 64 times. He told her that as manager it was up to him to monitor Ms Haque and not up to individual staff members. He described his tone as “firm” and explained that she was being monitored because of the three-month probation. Prior to this discussion, Mr Loizou brought to his attention that Ms Nikolis had been late on several occasions;

(e) during Ms Nikolis’ probation, he advised her that the probation period may be extended, but he does not recall any further detail;

(f) he does not recall asking Mr Berris what time Ms Nikolis left for tea or lunch;

(g) he does not recall having a discussion with Ms Nikolis on 2 August 2006 regarding her being ½ an hour late and does not recall her coming into his office. He did not shout at anyone and this conversation is a “complete fabrication”. He does recall, however, meeting with her at some stage to ask whether she had any medical problem that she wanted to discuss;

(h) also around this time he spoke with Ms Buric and Mr Majewski from human resources about issues he had with Ms Nikolis’ probation that involved her absences from work. They advised that he could not extend her probation but he could have a meeting with her to discuss her absences, tardiness and mobile phone usage. He was concerned about the amount of time Ms Nikolis did not attend the workplace during her probationary period;

(i) Mr Loizou never advised him that Ms Nikolis told him of an occasion when she was bleeding. If he had known, he would have insisted that she go home and rest, or see a doctor;

(j) he handed Ms Nikolis the letter requesting a meeting and said that the meeting was regarding the end of her probationary period and to discuss some concerns he had. The meeting was not a disciplinary meeting but was a counselling meeting;

(k) at the meeting Mr Pillai expressed his concern about her attendance, punctuality and mobile phone usage. He wanted know if her non-attendance was going to be a trend or whether there was some underlying cause that he may be about to assist her with. He did not have an issue with the medical certificates and Ms Nikolis had produced certificates. He told Ms Nikolis that if she was going to be late she was to inform the laboratory and he gave her the option of starting at 8.30am and finishing at 5.30pm. She responded that she would be punctual. He advised that mobile phone use was discouraged in the laboratory or in the toilets. Ms Nikolis said that she used the mobile because of a gynaecological reason. Ms Nikolis explained the reasons for her non-attendance and stated that she did not have any chronic illness;

(l) thereafter, Ms Nikolis was offered permanent employment;

(m) Mr Pillai denies speaking with Ms Nikolis again in his office on the day of the meeting and denies screaming at her;

(n) after speaking with Mr Majewski, he advised Ms Nikolis that she could not convert carer’s leave into annual leave because that would not give a true representation of her sick leave or carer’s leave. After returning from annual leave, Ms Smith advised Mr Pillai that Mr Majweski indicated that carer’s leave could be converted to annual leave and that he had been under the impression that Mr Pillai was referring to sick leave and that there must have been a misunderstanding. Ultimately, Ms Nikolis’ four days of carer’s leave from 27 October to 1 November 2006 was converted to annual leave;

(o) the records show that on 6 November 2006, Ms Nikolis took 2 ½ hours of sick leave that was later converted to family and community service leave. The records also show that on 7 November 2006, Ms Nikolis took one day of family and community service leave;

(p) when Mr Pillai returned from holidays, he rang Ms Buric and asked for advice on managing Ms Nikolis’ non-attendance. She advised him to arrange a formal meeting with her, which he did;

(q) Ms Nikolis came into Mr Pillai’s office and stated that she should not have been on probation at all because she came from another health area service and that he should not have been monitoring her because Ms Haque had been late approximately 50 times and he hadn’t done anything. Mr Pillai said that it was not up to her to monitor other staff members;

(r) at the meeting, Mr Pillai mentioned that he was concerned Ms Nikolis was handing in copies of medical certificates and that the dates had been crossed out and altered. Mr Dolan agreed that original medical certificates should be provided and that if dates were altered the doctor had to provide another certificate. There was disagreement between Mr Dolan and Ms Buric as to whether Ms Nikolis should have been put on probation in view of the fact that she came from another area health service. Mr Pillai advised Ms Nikolis that the meeting was not a disciplinary meeting but a formal meeting to discuss her excessive use of sick leave, annual leave and carer’s leave and to ascertain whether management could assist her by temporarily offering her part-time employment to assist her with family commitments during this period. He also acknowledged that since the previous meeting on 6 September 2006 her punctuality had been excellent and that her attendance was good up until approximately six weeks ago. The question of secondary employment arose and Ms Buric advised that approval was required for her to engage in secondary employment. The issue of confidentiality was raised in respect of Ms Nikolis’ compensation claim in respect of her car accident. Mr Pillai stated that he did not discuss that claim with any staff member. He described Ms Nikolis’ tone at the meeting as cold and his tone as “calm initially” with the meeting ending with “a bit of frustration”;
(s) when Ms Nikolis returned to work on 20 June 2007 [sic, 19 June 2007], Mr Pillai discussed a return to work plan in the presence of Ms Buric and Ms Smith and, therefore he did speak to her prior to 12 July 2007, contrary to Ms Nikolis’ allegation;

(t) on one occasion Mr Pillai spoke to Ms Nikolis about how to do an “altered comment code”. She responded that her supervisor told her to do it in the way that she had. He provided a copy of the altered comment protocol. He denies saying “I will let it go then this time”;

(u) whilst Ms Nikolis was working reduced hours, Mr Loizou advised that she was working some evening shifts with Diagnostic Services Australia;

(v) on 28 August 2007, a further meeting was held with Ms Nikolis, Ms Buric and Kim Sewell. Ms Nikolis denied working for Diagnostic Services Australia and she wanted to know why she was being unfairly targeted when she knew that other staff members worked at secondary employment and nothing was done about it. Ms Nikolis agreed to Ms Buric contacting Diagnostic Services Australia. Because of the conflict, Ms Buric suggested that for laboratory related issues Ms Nikolis should contact Ms Gemmell and for other work related issues she should speak with Mr Pillai but it would be advisable to have either Ms Smith or Ms Gemmell present, and

(w) Mr Pillai feels that he has been the subject of harassment since he had his first meeting with Ms Nikolis as she documented his moves, his staff’s moves, photocopied timesheets and rostered, and spread rumours to some staff members.

Mr Loizou’s Evidence

Mr Loizou provided a statement on 10 October 2007. He is a senior hospital specialist at the blood bank located at St George Hospital and he was Ms Nikolis’ immediate supervisor. He stated that Ms Nikolis was capable of doing routine work and was thorough, though she performed her work on the slower end of the scale, that was not an issue. He requested that her probationary period be extended because of her attendance and punctuality. Her lack of attendance at the laboratory meant that other staff were picking up more work. Ms Nikolis did not appear to him to be a team worker and he felt that there was an “air of discomfort beginning to develop generally in the lab”. Human Resources informed him that an extension of the probationary period was not a viable option.

There were often discussions when Ms Nikolis would advise him that she would be late because of family matters. He advised her that Mr Pillai had requested him to address staff lateness. Every few days there was an issue with her being late and when that happened he had to inform Mr Pillai. It got to a point where he felt uncomfortable acting as the conduit in relaying this information during her probationary period.

On 31 August 2006, he noted in his diary that he discussed Ms Nikolis “being attached to the phone today making personal calls on mobile and on lab phone”. Ms Nikolis said that she had to deal with solicitors and had to be contactable and that her work had not suffered. He replied that it did not mean that she could leave work for others to do. He is certain that she said that she was speaking with solicitors, not doctors.

He also took a diary note on 1 September 2006 in which he discussed Ms Nikolis’ absences with her and she indicated that she had PV bleeding and had a medical certificate dated 31 August 2006. She complained that she did not wish to say anything because Mr Pillai had cautioned her a number of times regarding her absences and lateness. Had she advised him on 31 August that she was unwell he would have recommended that she seek medical attention at that time.

He observed Ms Nikolis using her mobile phone on several occasions, but he could not state with accuracy whether it was on, before or after 31 August 2006.

Ms Buric’s Evidence

Ms Buric provided a statement on 11 October 2007. She confirms that Mr Pillai enquired if Ms Nikolis’ probationary period could be extended because her absences had not allowed sufficient time to assess her adequately. That request was declined.

The South Eastern Illawarra NSW Health Managers Fact Sheet – Managing Excess Sick Leave states that in the first three months managers should pay particular attention to absences because trends appearing in that timeframe often indicate a health related or other factor is affecting the employee’s work commitment. The Fact Sheet also states that an employee who has had eight separate absences in any period of 12 months is considered to have an unsatisfactory sick leave record. Managers are directed to use discretion when reviewing sick leave records, with particular note to be taken of medical certificates supplied and the reasons for absences. Managers are to meet with staff to ascertain whether there is an ongoing medical condition of which they need to be aware.

In December 2006, Ms Buric suggested that Mr Pillai have a further meeting with Ms Nikolis to discuss her excessive utilisation of leave and to canvas whether she would be interested in working part-time on a temporary basis to assist with her family commitments. Ms Buric expressly stated that the meeting was not a disciplinary meeting. The meeting was held on 14 December 2006 when Mr Pillai acknowledged that there had been an improvement in Ms Nikolis’ punctuality and mobile phone usage and an improvement in her attendance up until six weeks before the meeting. Ms Nikolis was offered flexible part-time hours but declined for financial reasons. Mr Pillai provided a list of absences since the 6 September meeting. Ms Nikolis stated that during the relevant period she accessed personal carer’s leave as a result of her children being ill. She denied working in secondary employment. From management’s perspective, Ms Buric was looking to support Ms Nikolis and her family commitments on a temporary basis. She did not recall Ms Nikolis appearing upset at this meeting.

Ms Buric acknowledges having received a letter of complaint from Ms Nikolis in late December 2006. She confirms that when she saw Ms Nikolis at about that time she appeared to be tearful. For various reasons, Ms Nikolis’ letter of complaint was placed on hold in early 2007. At some stage in the middle of 2007, Ms Nikolis contacted Ms Buric regarding the lack of confidentiality in the haematology department and stated that Mr Pillai’s attitude toward her was negative.

At some stage Ms Nikolis contacted Ms Buric and advised that Mr Pillai knew about her complaint and was holding it against her. Ms Buric advised that she told Mr Pillai about the complaint in January 2007, but not the content.

Ms Buric confirms that she attended the meeting on 28 August 2007 regarding secondary employment. At the end of that meeting, Ms Nikolis said that she felt intimidated by Mr Pillai as he was negative towards her and she would reactivate her claim. Ms Buric suggested that Mr Pillai and Ms Nikolis have someone present when speaking to each other in the workplace. She did not perceive that Mr Pillai behaved in an inappropriate manner at the meeting. Ms Nikolis complained about a lack of confidentiality and that most people in the department were aware that her workers compensation claim had been declined. Ms Buric reminded Mr Pillai and Ms Nikolis of the need to maintain confidentiality. Mr Pillai said he had not advised anyone in the department of the workers compensation claim. Mr Pillau then left the meeting and Ms Nikolis’ complaint was discussed with Kim Sewell and the worker. After the meeting, Ms Nikolis was in tears. Later that afternoon she went home early, as she did not feel well.

On 3 September 2007 Ms Buric contacted Diagnostic Services Australia and was informed by the accountant that Ms Nikolis was not working with that organisation and that her last shift was on 31 October 2006. On 24 September 2007, Ms Buric contacted the owner of Diagnostic Services Australia, Dr Jana, and was informed Ms Nikolis last worked for that organisation on Friday 14 September 2007. In a latter conversation with Dr Jana it was confirmed that Ms Nikolis was currently working at Diagnostic Services Australia two evenings per week. Ms Buric was subsequently informed that Ms Nikolis was terminated from Diagnostic Services Australia.

The Factual Investigation

The insurer commissioned a factual investigation into the circumstances of this claim in 2007 and, as a result, MJM Investigations (Australia) Pty Ltd reported on 18 October 2007. In addition to providing a summary of the statements that are in evidence, the investigators also provided summaries of discussions with witnesses who declined to give statements. These included Peter Berris, Tina Vaccaro, part-time technical officer, Nada Makki, scientist, Dr Jana, Mr Majewski, and Wendy Morse, laboratory manager with the worker’s previous employer.

Mr Berris recalled the occasion when Ms Haque was late for work and he questioned why he had not been informed. In respect of the meeting held about this incident, he referred to the minutes taken at that meeting which record “SP (Sudha Pillai) further stated that the other staff member (Claimant) on shift with PB (Peter Berris) was supposed to inform him this morning that Shazia Haques would be approximately 30 minutes late.” Mr Berris told Ms Nikolis that Mr Pillai said she was “supposed” to have advised him that Ms Haque would be late. He did not say that Mr Pillai said it was her “fault”.

Mr Berris recalls one occasion when Mr Pillai approached laboratory staff and enquired when Ms Nikolis departed for her break. Ms Vaccaro phoned Ms Nikolis and told her Mr Pillai had been making enquiries about the time of her departure. Mr Berris recalls one occasion when Ms Nikolis was tearful when she was upset as a result of being denied the opportunity to take an alternative “ADO”.

Ms Vaccaro confirms Mr Berris’ evidence that Mr Pillai enquired when Ms Nikolis departed for her break and that she subsequently telephoned the worker to advise her of that enquiry. Ms Vacarro also recalls an occasion when Mr Pillai approached Ms Nikolis regarding a comment on a patient result. The worker said that Ms Gemmell, a supervisor, had instructed her to comment in the way she did. Mr Pillai said, “I’ll let it go this time”. Ms Vaccaro observed the worker tearful on a couple of occasions at work. On those occasions, Ms Nikolis expressed difficulties she was experiencing with Mr Pillai, but Ms Vaccaro was not a witness to any of those difficulties.

Ms Makki attended an aggressive minimisation course with the worker on 11 September 2007. During the course Ms Nikolis asked the following question “If you were bullied by your manager and if you send a ten page complaint to human resources and if human resources sent the complaint back stating to make it briefer, what would you do?” The presenter responded “Tell HR to do their job”.

Mr Majewski advised that he recalled an occasion when Mr Pillai enquired if Ms Nikolis could receive annual leave. It was his understanding that Mr Pillai referred to sick leave being converted to annual leave, not carer’s leave. He said that carer’s leave may be converted into annual leave, however, the Health Service discouraged sick leave being converted into annual leave. He did not recall any discussion on this issue related in any way to attempting to accurately record Ms Nikolis’ sick leave or carer’s leave. When management is attempting to accurately record such leave, he has suggested that an internal record is kept regarding such leave.

Dr Jana responded to the investigators “electronically” as follows:

“Anna has been working as a subcontractor since August 2006 til 7/10/07. Anna appears to have worked 4 hours per shift twice weekly. Anna has not worked since October 2007. Her employment is suspended. I am not aware of any instruction from Anna to [the] accounting section.”

The investigators submitted further inquires to Dr Jana seeking clarification as to whether there had been any interruptions in Ms Nikolis’ employment and Dr Jana advised that he had little time to dwell on the issue.

Ms Morse advised that she experienced difficulties with Ms Nikolis’ attendance and she discussed those issues with her.

Ms Nikolis’ Evidence in Reply

Ms Nikolis also relies on her statements dated 14 December 2007 and 12 February 2009. In the December 2007 statement, she claims that the people on the interview panel, including Mr Pillai, were aware that she had two jobs as at June 2006. At no time during the interview was she advised that, if she obtained the new position, she would need the Hospital’s written permission to continue her part-time work with Diagnostic Services Australia. In July 2006 her husband was offered part-time work with Diagnostic Services Australia and she formed a partnership with him and Diagnostic Services Australia paid them jointly into the same bank account.

She claims that on her first day in her new job in June 2006, she tried to clarify the secondary employment with Mr Pillai. There was no mention about any written permission or a code of conduct. Between July and December 2006, Mr Pillai subjected her to bullying and harassment. She felt psychologically unsafe at work and lodged a formal grievance with the Human Resources department on 8 December 2006. The meeting on 14 December 2006 was to discuss excessive sick leave. Ms Nikolis states that it was unfair to bring up the question of outside employment at that meeting when it was not a matter about which she had been given previous notice. Though she had been promised weekend and overtime with the Health Service, none had been offered. She was not given any code of conduct document but was told to look on the intranet for a form requesting approval to engage in outside employment. After that meeting she gave verbal notice to Diagnostic Services to discontinue employment. They then made an offer for her to stay on as a laboratory consultant and occasionally look at some “QC results” for their upcoming NATA review.

At the meeting on 28 August 2007, Ms Nikolis informed Ms Buric that she had previously told Mr Pillai of her continued employment with Diagnostic Services Australia when she commenced with the Health Service and he responded that he did not care what she did. She advised that she had not received a copy of the code of conduct and that she was aware that other employees had second jobs.

Ms Nikolis considered it inappropriate, given that she had filed a formal grievance alleging bullying by Mr Pillai in December 2006, that the Health Service allowed him to deal with her as an enemy. Throughout the meeting, Ms Nikolis asked Ms Buric to order Mr Pillai to stop talking to her. Ms Buric replied that he was entitled to ask her questions, but Ms Nikolis considered it inappropriate given that she had made complaints about her fears of him. She added that it was evident at the meeting that she was intimidated by him and frightened of him.

On 14 September 2007, Ms Nikolis attended at the offices of Diagnostic Services Australia and requested them to remove her name from their books.

In her February 2009 statement, Ms Nikolis responded to the three statements relied upon by the Health Service. In respect of Mr Pillai’s statement, she makes the following additional comments:

(a)she attached a diary entry relating to the incident in July when Ms Haque said she would be late and Mr Berris was upset that he had not been informed. Her diary entry is consistent with her earlier statement that Mr Pillai told her to “stay out of it, don’t get involved”. Her diary entry states that he used a “threatening voice” which was “harsh and intimidating”. She was shocked by the incident and Mr Pillai’s way of handling it;

(b)in respect of Mr Pillai’s denial that he told Ms Nikolis that Ms Haque had an excuse for being late because she lives at Matraville, Ms Nikolis has produced a diary entry dated 12 July 2006 recounting a conversation where Mr Pillai allegedly said “Shazia [Haque] is late because she has [an] excuse that she is travelling from Matraville and is being delayed in traffic and you live close”. The diary note added that Mr Pillai shouted in a threatening and intimidating voice;

(c)in respect of paragraph 34 of Mr Pillai’s statement (dealing with the conversation when Mr Pillai said he may extend the probationary period), Ms Nikolis has attached a diary note dated 2 August 2006. This diary note also deals with Mr Pillai’s assertion at paragraphs 36 and 37 of his statement that he did not recall having a conversation with Ms Nikolis on 2 August 2006 after she arrived 30 minutes late on that day. The diary note confirms Ms Nikolis’ version of the conversation on that day;
(d)Ms Nikolis maintains that she had a second meeting with Mr Pillai on 6 September 2006. The diary entry for that date makes no mention of a second meeting;

(e)in respect of Ms Nikolis’ employment with Diagnostic Services Australia, Ms Nikolis states that Mr Pillai asked her at her employment interview if she intended to keep her job with that organisation and that she replied that she did as she needed the extra overtime and it would not interfere with her job with the Health Service. Mr Pillai allegedly replied “No, that is not going to be a problem we don’t have overtime here. Just some half day, four hour shifts on an occasional Saturday”. Ms Nikolis then said “So if I get this job then I can still keep my second job?” and Mr Pillai replied “Yes, that is not a problem, as long as it is out of your normal hours.” During her first two days with the Health Service Ms Nikolis discussed her employment with Diagnostic Services Australia with Mr Pillai. He said that he knew two people who worked with that organisation, Bernie Wendolin and Dr Jana. Ms Nikolis then said, “Is it a problem for me to continue working there? Do I need to fill in a form or something?” And Mr Pillai responded “No. Say hello to them for me”;

(f)in respect of the meeting on 28 August 2007, Ms Nikolis alleges that she said to Mr Pillai “You knew about my secondary employment. You approved it when I started as well as during my initial training period.” Ms Nikolis felt that she was being attacked during the meeting and she stated that Mr Pillai flatly refused to investigate assertions she made about other staff acting in the same manner with regard to secondary employment;

(g)as to the course Ms Nikolis attended on 11 September 2007, she denies that during that course she referred to her manager harassing and bullying her, and

(h)she completely denies that she has been harassing Mr Pillai but agrees that she recorded matters in her diary. That was because she felt that he resented her and he treated her unfairly from the beginning.

As to Mr Loizou’s statement, Ms Nikolis makes the following comments:

(a) she admits that she used her mobile phone on 30 August 2006 in the work toilet to call her doctor. She denies ever telling Mr Loizou that the mobile phone call was in connection with solicitors. At about this time she was dealing with solicitors about a matter and she mentioned that in passing to Mr Loizou at morning tea. She feels that he may be confused about the two issues as they occurred at about the same time. She concedes that she may have taken a phone call from her solicitor on her work phone;
(b) she denies that she made up a story, or that she agreed that she made up a story (about the bleeding), though she agrees with Mr Loizou that she was afraid to disclose the details of her condition to Mr Pillai for fear that further persecution would result from taking sick leave, and

(c) apart from the incident when she experienced bleeding, she denies ever using her mobile phone in the laboratory though she may have left her phone on a shelf on one occasion.

As to Ms Buric’s statement, Ms Nikolis states:

(a) she denies that Ms Buric ever gave her a form to complete in relation to secondary employment. She claims that Ms Buric said that she would email it to her, but she did not. On 16 August 2007, Ms Buric emailed an attachment to her but she was unable to access the attachment, and
(b) Ms Nikolis denies using the word “reactivate” in relation to her grievance against Mr Pillai at the meeting held on 28 August 2007. She had never terminated her complaint and in her view it was ongoing.

Ms Nikolis’ Medical Evidence

Dr Marinkovich, Ms Nikolis’ general practitioner, provided a short report on 5 September 2006 addressed to “To Whom It May Concern” advising that Ms Nikolis had been a patient of his for 11 years and that she was not suffering from any chronic illness. However, she had recently had a caesarean section and some viral infections, which were of a temporary nature. He did not envisage any serious problems in the near or distant future.

Dr Marinkovich prepared a medicolegal report for the purposes of the current claim on 1 September 2008. The first three pages of this report deal with the January 2007 car accident and are not directly relevant. Dr Marinkovich recorded a history of Ms Nikolis having telephoned him on 30 August 2006 reporting that ever since she changed her workplace from Bankstown to St George Hospital in June 2006, her new boss “bullied her, threatened to dismiss her and intimidated her”. She stated that she found it to be unacceptable and that she was very upset. She felt that she was being discriminated against and the occupational conflict with her boss had a great impact on her. She also mentioned PV bleeding and the doctor advised her to go to the Emergency Department at St George Hospital. Ms Nikolis rang again on 31 August 2006 stating that she had not attended at the Emergency Department, as she feared leaving work because of her boss’ attitude. Dr Marinkovich faxed her a referral to see her gynaecologist, Dr Hammill.

Ms Nikolis attended on Dr Marinkovich on 5 September 2006 and advised that her conflict with her boss had not been resolved and that she had requested a medical certificate stating that she was not suffering from any chronic disease otherwise her probationary period was to be unsatisfactory and her full-time position terminated. The doctor recorded that she was anxious and upset. He examined Ms Nikolis again for the same problems on 12 October 2006, 23 November 2006 and 19 December 2006. On each occasion she was counselled and advised. She was also prescribed avanza, but with minimal result. As her condition had not improved, Dr Marinkovich referred her to Dr Selwyn Smith in either December 2006 or January 2007. Due to her car accident on 23 January 2007 she missed her appointment with Dr Smith. As she was off work until 16 June 2007 and not subject to confrontation with her boss, her condition improved. As soon as she returned to work, the conflict with her boss became apparent again and her symptoms worsened.

On 12 March 2007 Dr Marinkovich recorded that she was still depressed “due to unresolved issues relating to her manager”.

Dr Marinkovich recorded that on 28 August 2007 Ms Nikolis left work early due to a further confrontation with her manager. She was given a medical certificate. On 14 September 2007 she was reviewed by Dr Smith due to her significant occupational conflict with her superior at work.
On 17 September 2007, Ms Nikolis was tearful and depressed and reported that the conflict with her superior continued. She felt that a lack of understanding, compassion, and respect towards her was an ongoing problem.

On 30 November 2007, Ms Nikolis telephoned Dr Marinkovich in tears expressing suicidal ideation. She was counselled over the phone and faxed a prescription and referred back to Dr Smith. As at September 2008, her treatment was symptomatic and ongoing.

Dr Smith reported to Ms Nikolis’ former solicitors, Watkins Tapsell, on 27 November 2007. He took a history of significant occupational conflicts with her superior. She reported being rebuked and spoken to in what she described as a threatening and intimidating manner. She described being fearful and shocked by the manner in which she was spoken to. The difficulties with her superiors caused Ms Nikolis significant occupational distress. She felt unsupported even though she was undertaking her job. She was of the opinion that the meeting on 5 September 2006 (presumably, 6 September) had been conducted fairly.

At the time Ms Nikolis presented to Dr Smith, she reported experiencing significant levels of anxiety and being tearful and depressed. She had been ruminating about her adverse working circumstances and the lack of support from her superiors. She had gained weight and her sleep patterns had been continually interrupted. She described being agitated and complained of hair loss. She also experienced significant fears about losing her job and was at a loss about what to do.

Dr Smith considered it significant that Ms Nikolis had not previously experienced psychological symptoms of significance in regard to her working environment. She regarded herself as a diligent worker and had never previously made a workers compensation claim in regard to psychological issues.

Ms Nikolis presented to Dr Smith as an overtly anxious and agitated woman. Her speech was pressured and she reported being persistently depressed, despairing, irritable and anxious. She expressed anger towards her superiors over their lack of support and unfair treatment directed towards her. At the time of his examination, Ms Nikolis revealed a depressed, anxious, and fearful affect.

Dr Smith concluded that, as a result of her adverse work-related circumstances and in particular what she regarded as bullying, harassing, and discriminatory behaviour on the part of her superiors, Ms Nikolis developed a Chronic Adjustment Disorder with Depressed and Anxious Mood. Her psychiatric disorder was a direct outcome of her work-related conflicts and her work was a substantial contributing factor to the disorder. Accepting the veracity of Ms Nikolis’ account, and in the absence of any competing and reliable information, Dr Smith did not believe the injury had been wholly or predominantly caused by the reasonable actions taken or proposed to be taken on behalf of the employer in regard to performance appraisal, discipline or other employment benefits.

Dr Smith provided a further report on 21 August 2008 in which he advised that Ms Nikolis’ condition had not improved, but in many ways had deteriorated. She continued to be depressed and her depressive state had worsened. She had become increasingly irritable and anxious and continued to ruminate upon the adverse experiences she underwent at work. Ms Nikolis continued to demonstrate a Chronic Adjustment Disorder with Depressed and Anxious Mood and Dr Smith confirmed his previous diagnosis.

The Health Service’s Medical Evidence

The Health Service’s insurer, Employers Mutual Limited, referred Ms Nikolis to Dr Lee, consultant medico-legal psychiatrist, for assessment on 22 October 2007. Dr Lee took a detailed history of Ms Nikolis’ complaints and her allegations relating to Mr Pillai’s conduct in general. He then set out a detailed summary of the factual investigation report dated 18 October 2007 and concluded:

“It appears that there have been many ongoing industrial and performance issues in regard to Ms Nikolis, and that the employer has acted reasonably in line with section 11A of the Workers’ Compensation Act with regard to performance appraisal. Moreover, the factual investigator considers that Ms Nikolis has acted fraudulently.
Therefore, there are grounds to suspect that she has not been genuine in her report of psychological problems, perhaps associated with the prospect of pecuniary gain.
It is unlikely that she requires further treatment or investigation or that she has any whole person impairment.
As she has not been in the workplace since 19 September 2007, any work related aggravation should now have ceased, and the overall circumstances of her case are inconsistent with a DSM – IV diagnosis.”

Ms Nikolis made a claim under an income protection policy with CommInsure. As a result, an examination was arranged with Dr Brian Potter, consultant psychiatrist, on 16 June 2008. In his subsequent report dated 23 June 2008 he recorded Ms Nikolis’ history of difficulties with Mr Pillai relating to her punctuality and absenteeism. She described being watched all the time and being pulled up for doing things incorrectly. He recorded that she ceased work on 13 September 2007 following an incident at work when she had not replaced a reagent in a machine when the indicator informed that it was low.

Under “Diagnosis”, Dr Potter concluded:

“Ms Nikolis described the development of a debilitating anxiety associated with her experience of finding herself within a hostile and estranged working environment when she transferred between hospitals to be closer to home.
While the described anxiety would be consistent with the diagnosis of Chronic Adjustment Disorder with Mixed Anxiety and Depression, her history is given in an inconsistent and unreliable manner and her presenting signs do not compliment the history given.
Given the inconsistent and unreliable history which is not complimented by her presenting signs, it is not possible to accept a clear diagnosis of an Adjustment Disorder.
There will need to be independent evaluation of Ms Nikolis’ behaviour and functioning and clearer and more detailed reporting of her treatment history.
It will be important to make sure that she has been medically screened by her treating doctors for a metabolic or cognitive dysfunction.”

THE ARBITRATOR’S REASONS

In a Statement of Reasons (‘Reasons’) delivered on 17 March 2009, the Arbitrator reviewed the evidence and made the following findings:

(a) it was apparent that there was discord between Ms Nikolis and Mr Pillai from shortly after the time she commenced employment with the Health Service (Reasons, at [43]);
(b) it was evident that Ms Nikolis “perceived that she was being harassed” by Mr Pillai (Reasons, at [44]);

(c) he accepted that Ms Nikolis perceived that she was being harassed and that that perception was based upon actual events. In these circumstances it was immaterial whether she misperceived those events (State Transit Authority v Chemler [2007] NSWCA 249; (2007) 5 DDCR 287 (‘Chemler’)) (Reasons, at [45]);

(d) Dr Marinkovich reported that on 30 August 2006 Ms Nikolis telephoned him and said that her new boss bullied her, threatened to dismiss her and intimidated her (Reasons, at [46]);

(e) Ms Nikolis gave a substantially consistent history in the present proceedings and to the three supporting psychiatrists. Dr Smith had the advantage of having seen Ms Nikolis on a number of occasions over time. He accepted Dr Smith’s opinion that Ms Nikolis suffers from a Chronic Adjustment Disorder with Depressed and Anxious mood as a result of what she perceived to be harassment in the workplace (Reasons at [52]);

(f) he was satisfied that work was a substantial contributing factor to the injury (Reasons, at [53]);

(g) Mr Pillai’s actions did not constitute performance appraisal under either the definition in Irwin v Director General of School Education NSW (Compensation Court of NSW, No. 14068/97, unreported 18 June 1998) (‘Irwin’) or Bottle v Wielan Consumer Pty Ltd (1999) 19 NSWCCR 153 (‘Bottle’) (Reasons, at [59]);

(h) there was no evidence from the Health Service that supported the view that Ms Nikolis’ injury was due to action in respect of performance appraisal, and

(i) the applicant was entitled to an award of weekly compensation from 14 September 2007 to date and continuing together with an order for section 60 expenses.

ISSUES IN DISPUTE

The notice of appeal lists three “Grounds of Appeal” and the submissions in support are directed partly to those issues and partly to other issues. It seems that the Health Service seeks to argue the following issues on appeal:

(a)causation and whether employment was a substantial contributing factor to the injury;

(b)the Arbitrator’s interpretation of section 11A;

(c)the reasonableness of Mr Pillai’s conduct;

(d)the exercise of the Arbitrator’s discretion when applying the principles determined in Yeo v Western Sydney Area Health Service (1999) 17 NSWCCR 573 (‘Yeo’) and Smyth v Charles Sturt University [2007] NSWWCCPD 184 (‘Smyth’), and

(e)whether the Arbitrator gave adequate reasons.

SUBMISSIONS

The following submissions are made on behalf of the Health Service:

(a) it does not dispute the finding that Ms Nikolis is suffering from an adjustment disorder with depressed mood;
(b) it disputes the finding that the adjustment disorder was caused by the worker’s perception that she had been harassed and the finding that her employment was a substantial contributing factor to “the current condition”;

(c) the Arbitrator’s finding that the Health Service had not established a defence under section 11A is disputed;

(d) it was “inappropriate” that the Arbitrator did not specifically address the reasonableness of Mr Pillai’s conduct;

(e) the Arbitrator’s reasons were “extremely brief, not addressing the submissions made by counsel in respect to the process being undertaken by the appellant employer in addressing performance issues including excessive leave”;

(f) there is clear evidence that the meetings held with Ms Nikolis “were in respect to performance appraisal, by the very nature of the meetings called and the issues raised by Mr Pillai, throughout the period”;

(g) Ms Nikolis commenced with the Health Service on a three-month probationary period. In that period, Mr Loizou reported to Mr Pillai that the worker had been late on several occasions. A decision was then made to discuss the issue prior to the end of the probationary period and Mr Pillai confirmed that he advised Ms Nikolis that he might seek to lengthen her probationary period. The meeting on 6 September 2006 addressed the excessive sick leave and personal leave taken by Ms Nikolis during the previous three months. Punctuality and phone use were also addressed. The meeting on 14 December 2006 discussed excessive leave and whether the Health Service could assist by offering part-time employment. The issue of secondary employment was also discussed at that meeting;

(h) at the meeting on 28 August 2007 the question of secondary employment was discussed and Ms Nikolis stated that she was being unfairly treated, as other staff were also working second jobs. She also stated that she wanted no further involvement with Mr Pillai and arrangements were put in place for another supervisor to be present in all contacts between the parties, and

(i) the Arbitrator erred in finding that the various meetings did not constitute a performance appraisal process. It is clear that there were performance issues throughout the period.

The Health Service’s solicitor filed further submissions on appeal on 28 May 2009 in which he made the following additional points:

(a) counsel for the Health Service made submissions about the application of section 11A at the arbitration. At T27.48 the Arbitrator identified the following question for determination:
“…because 11A is ‘wholly or predominantly caused by reasonable action’ with respect to, and despite the usual blanket 11A being that this is discipline or performance appraisal, it’s not suggested it’s anything else. So that seems to be the question.”

(b) the submissions following the Arbitrator’s comment dealt with the issue of “reasonableness”, but the Arbitrator ultimately found that the issue of “performance appraisal” did not arise;
(c) the Arbitrator “did not clearly or at all explain how their application brought him to satisfaction that a performance appraisal was not being undertaken at the relevant time”, and

(d) the Arbitrator’s lack of reasoning constitutes an error for the reasons set out by Meagher JA in Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 (‘Beale’).

It is submitted on behalf of Ms Nikolis that:

(a)the Health Service has failed to establish any proper basis to disturb the Arbitrator’s findings;

(b)the powers of a Presidential member to revoke a decision are exercisable only where the Arbitrator’s decision contains some legal, factual or discretionary error (The King Island Company Ltd v Deery [2005] NSWWCCPD 1);

(c)the Arbitrator’s reasoning and findings are consistent with the principles discussed in Chemler;

(d)the Health Service does not seek to disturb the Arbitrator’s findings as to injury, however, the findings as to injury effectively preclude the Health Service from relying on section 11A in defence of the claim;

(e)the Arbitrator correctly determined that there was no evidence to find that the Health Service’s reasonable disciplinary action wholly or predominantly caused Ms Nikolis’ injury;

(f)in respect of performance appraisal, the Arbitrator’s findings are consistent with the authorities of Irwin and Bottle and there is no evidence to support an alternate finding. The Health Service did not adduce evidence that would satisfy the definition of performance appraisal set out in those authorities;

(g)there is no medical evidence to directly support the proposition that the injury was caused by performance appraisal. In any event, for the reasons outlined in his decision, the Arbitrator preferred the medical evidence of Dr Smith, and that was a proper exercise of his discretion;

(h)in respect of the meeting on 28 August 2007, the Arbitrator noted that it was not suggested that the meeting was for disciplinary purposes and, in any event, the meeting was not the whole or predominant cause of Ms Nikolis’ injury because, by that stage, she had been receiving treatment for 12 months (Reasons, at [55]). The Arbitrator’s finding is consistent with the medical evidence and his finding as to injury which the Health Service does not challenge;

(i)the Arbitrator’s findings as to injury are consistent with Chemler and should not be disturbed, and

(j)the Health Service has not established that the whole or predominant cause of Ms Nikolis’ psychiatric injury was reasonable action with respect to discipline or performance appraisal.

DISCUSSION AND FINDINGS

Causation and Substantial Contributing Factor

The Health Service has not presented any useful submissions on this issue but merely makes the bald assertion that it disputes the Arbitrator’s finding. I have found that submission unhelpful. Having reviewed the evidence, I am comfortably satisfied that Ms Nikolis’ psychological injury resulted from her employment and that her employment was a substantial contributing factor to her injury. No other cause has been suggested. Her symptoms began at work as a result of contact with her supervisor over work issues. Her complaints of difficulties at work are corroborated by Ms Vaccaro, Ms Buric and, to a lesser extent, by Mr Berris. Dr Marinkovich’s evidence, which I accept, is also strongly corroborative. He recorded on 30 August 2006 that Ms Nikolis was having difficulties at work because of her manager.

As noted by Spigelman CJ in Chemler (at [40]):

“40 In this area of law, as in negligence, the talem qualem principle is applicable i.e. employers take their employees as they find them. With respect to psychological injury there is an ‘eggshell psyche’ principle which, like the equivalent ‘eggshell skull’ principle, is a rule of compensation not of liability. The element of foreseeability required by the law of negligence is not the basis of the ‘eggshell skull’ principle and it can be applied by way of analogy to claims for compensation under the 1987 Act. (See Morgan v Tame [2000] NSWCA 121; (2000) 49 NSWLR 21 esp at [23]-[29] and cases quoted therein. See also Tame v New South Wales [2002] HCA 35; [2002] HCA 35; (2002) 211 CLR 317 esp at [318] and Nominal Defendant v Gardikiotis [1995] HCA 56; (1995) 186 CLR 49 at 68.)”

The decision of Yeo must now be read in the light of Chemler. In Yeo, the trial judge held that “a misperception by a worker of otherwise innocuous matter, which misperception leads a worker to develop a psychiatric condition, does not constitute injury arising out of or in the course of employment.” Spigelman CJ observed that that statement stated the principle in Townsend v Commissioner of Police (1992) 25 NSWCCR 9 too broadly and (at [54]) that:

“As McGrath CJ Comp Ct indicated, as quoted above, a ‘perception of real events’, which are not ‘external events’, can satisfy the test of injury ‘arising out of or in the course of employment’.”

The Arbitrator correctly applied the above authorities and I agree with his approach and conclusions on the issue of causation and substantial contributing factor. For the reasons given by the Arbitrator, I prefer and accept Dr Smith’s evidence in preference to the evidence from Drs Lee and Potter.

Section 11A and the Reasonableness of Mr Pillai’s Conduct

Section 11A(1) provides:

“11A No compensation for psychological injury caused by reasonable actions of employer

(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.”

The onus of establishing that a section 11A defence is established is on the employer (Ritchie v Department of Community Services [1998] NSWCC 40; (1998) 16 NSWCCR 727; Department of Education and Training v Sinclair (2005) 4 DDCR 206; [2005] NSWCA 465 (‘Sinclair’)).

In a claim for compensation for psychological injury, the Commission has to decide whether the whole or predominant cause of the psychological injury was the employer’s action or proposed action with respect to, in this case, performance appraisal or discipline, and, if so, whether the action or proposed action with respect to the performance appraisal or discipline was reasonable (see Manly Pacific International Hotel Pty Limited v Doyle [1999] NSWCA 465; (1999) 19 NSWCCR 181 at [4]).

The Health Service’s submissions on appeal are unhelpful and merely allege that the Arbitrator did not address the submissions made by its counsel at the arbitration, though it has not referred to any specific submissions. I have carefully considered all the submissions made at the arbitration. Counsel for the Health Service submitted (at T13.5) that the question of punctuality, to the extent that Ms Nikolis was on probation for a period, “was performance appraisal as well as discipline”. It was also submitted that Mr Pillai denied shouting at people and that no witness was called to say he or she ever heard Mr Pillai raise his voice. Counsel added (at T13.48) “the question is whether you’re satisfied on the balance of probabilities that there was screaming or shouting”.

At T14.46 the following exchange took place between the Arbitrator and counsel for the Health Service:

“ARBITRATOR: Your primary position is that the injury really occurred at that meeting of 28 August '07 and anything else at that meeting was clearly discipline, whatever the nature of that meeting, therefore, it’s 11A and injury flows from there and therefore is wholly or predominantly caused by that [inaudible] and it's [inaudible].
MR PERRY: Yes, yes.
ARBITRATOR: With the back-up submission that everything leading up to it should also be categorised as performance appraisal [inaudible] at that level.
MR PERRY: Yes. Yes, that’s correct, when you analyse it and, of course, there’s a huge amount given there. Where are the bits where before that date?
ARBITRATOR: Yeah.
MR PERRY: You’re quite right. This is the back-up submission. ‘There were times that I felt distressed or troubled.’ I made a submission that that doesn’t amount to an injury but, if it did, that they, too, fell within the category. So you’re quite right, that’s a back-up submission. Wholly or predominantly the result of discipline or performance appraisal, and when you read Mr Sudha and when you read Maria Buric and when you look at the absence of other material critical of Sudha and others - it really only seems to be Sudha - that you cannot be satisfied that the applicant - that the employer behaved unreasonably. If I’m wrong about that, then the issue is incapacity.”

Dealing first with ‘discipline’, I do not accept that any of the meetings, or the Health Service’s conduct in general, can be fairly characterised as action taken, or proposed to be taken, with respect to discipline. The Health Service’s own witnesses expressly state that the earlier meetings were not disciplinary meetings (see [65 (j) and (r)] and [73] above). The meetings were to discuss the issues with Ms Nikolis and to provide counselling and support. The meeting of 28 August 2007 related to Ms Nikolis allegedly engaging in secondary employment. No disciplinary action was discussed or even hinted at. I accept Ms Nikolis’ evidence she had previously disclosed her secondary employment to Mr Pillai when she was first interviewed and that he indicated that it was not a problem. Exactly when Ms Nikolis ceased her job with Diagnostic Services Australia is the subject of conflicting evidence, but is of no direct consequence.

As to whether the meetings, or the Health Service’s conduct in general, can be characterised as action taken or proposed to be taken with respect to performance appraisal, the Arbitrator referred to two relevant authorities (Irwin and Bottle) and concluded that they did not meet the tests in those authorities (Reasons at [59]). The Health Service’s submissions have not advanced any persuasive reason why a different conclusion should be reached on review.

The Arbitrator said (at [56]):

“In Irwin v Director of General School Education NSW CC (18 June 1998 unreported) Geraghty J said: -
‘Performance appraisal is more like a limited, discrete process, with a recognized procedure to which the parties move in order to establish an employee’s efficiency and performance.’

In Bottle v Wielan Consumer Pty Ltd (1999) 19 NSW CCR 135) Nielsen J took a narrower view of the words performance appraisal. He said:-
‘Consistent with my decision in Yeo v Western Sydney Area Health Service (1999) 17 NSW CCR 573 an assessment preliminary to demotion, transfer or retrenchment, dismissal or discipline would be part of those respective processes. There would be no need for there to be a supervision for performance appraisal. That, again, leads me to the view that performance appraisal is putting a value or putting an estimate of value (that is monetary value) upon the work being performed by the employee.’”

Acting Deputy President Handley also considered the meaning of performance appraisal in Ponnan v George Weston Foods Ltd [2007] NSWWCCPD 92 (‘Ponnan’) where he said (at [25]):

“I understand ‘performance appraisal’ to mean a process involving the employer discussing with the worker his or her performance at work: this could include, for example, discussing the degree of efficiency with which the worker undertakes his or her duties or the number of mistakes made by the worker in performing his or her duties.”

I am in general agreement with Acting Deputy President Handley’s statement in Ponnan. In the present case, however, the evidence is that whilst Ms Nikolis’ work performance and efficiency was “on the slower end of the scale”, “that wasn’t an issue” (see [66] above). Ms Nikolis’ evidence, which I accept, is that she would work back to make up time if she was late. Her work performance and efficiency were adequate.

Whilst there may well be circumstances where repeated absenteeism or lack of punctuality over a prolonged period, in the absence of appropriate medical certificates, can give rise to action with respect to performance appraisal, I do not accept that the present matter is such a case. There is no persuasive evidence that the meetings in question, or Mr Pillai’s conduct in general, can be properly characterised as action taken or proposed to be taken with respect to performance appraisal. If the employer intended the action to be so characterised, I would have expected much clearer conduct and appropriate notification to Ms Nikolis that her work performance was being assessed.

A worker is entitled to first have the issue brought to his or her attention and to receive appropriate counselling. That happened in this case. If the worker’s attendance continues to be unsatisfactory, then an employer may, in an appropriate case, move to the next step and advise that the matter has become a performance issue. Neither Ms Nikolis’ absenteeism nor her punctuality progressed past the preliminary stage where counselling was offered and enquiries made if there was any chronic illness or if Ms Nikolis’ would prefer to work part-time. At no stage did the Health Service indicate that it was progressing to an appraisal of Ms Nikolis’ work performance with the obvious consequences that that might have involved.

Though the Health Service alleges that the Arbitrator erred in law in the exercise of his discretion when applying the principles in Yeo and Smyth, the basis for that alleged error has not been explained. The submission merely states that the Arbitrator erred in not finding that the various meetings held to address problems with attendance during a probationary period constituted performance appraisal. I do not accept that submission. The meetings in the probationary period were clearly for the purpose of counselling.

I do not accept that Mr Pillai’s conduct, viewed in its entirety, can be characterised as performance appraisal. There was no discussion process about Ms Nikolis’ performance or efficiency, but merely complaints by him about her attendance and punctuality.

It follows that the section 11A defence is not made out. Given this finding, the other issues in the section, namely, whether the psychological injury was wholly or predominantly caused by the performance appraisal or discipline, and whether the steps taken or proposed to be taken were reasonable, do not arise. Therefore, the Health Service’s challenge that the Arbitrator erred in failing to consider the reasonableness of Mr Pillai’s actions also fails. The submission that the Health Service considered it “inappropriate” that the Arbitrator did not address the question of reasonableness given the facts of the case is not a proper submission.

If I am wrong on this issue, and the conduct in question did amount to either performance appraisal or discipline, I am not satisfied that Mr Pillai’s conduct on behalf of the Health Service, when viewed in its entirety (see Sinclair at [96] and [97]), was reasonable.

Counsel for the Health Service at the arbitration referred to the lack of corroborative evidence that Mr Pillai shouted. I do not find that submission convincing. Even if it is accepted that Mr Pillai did not shout, that does not determine if his conduct overall was reasonable. Having carefully reviewed all of the evidence, I do not accept that Mr Pillai’s conduct was reasonable because, on a number of issues, I have found his evidence to be unsatisfactory and, for the following reasons, I prefer and accept Ms Nikolis’ evidence where it conflicts with Mr Pillai’s evidence:

(a)Mr Pillai conceded that his tone was “firm” (see [65(d)] above) in at least one of his discussions with Ms Nikolis and that at least one of the meetings ended with “a bit of frustration” (see [65(r)] above);

(b)Ms Nikolis’ diary notes, which I accept as being generally accurate, provide persuasive corroborative evidence that Mr Pillai’s manner was, at least, “threatening” or “harsh and intimidating” (see [92(a)] above). Such a tone or manner, though it may not have been screaming or shouting, is not reasonable action by a manager;

(c)Mr Pillai’s assertion that he does not recall asking Mr Berris what time Ms Nikolis left for tea and lunch suggests a selective memory on his part, as the evidence from Ms Vaccaro and Mr Berris, which I accept, corroborates Ms Nikolis’ assertion that he did just that;

(d)similarly, Mr Pillai’s reliability is further undermined by his failure to recall the conversation with Ms Nikolis on 2 August 2006. The occurrence of that conversation is confirmed by Ms Nikolis’ diary note of that date;

(e)Mr Pillai’s discussions with Mr Majewski may have been a simple misunderstanding, but it seems odd that such a mistake could occur and this further undermines Mr Pillai’s reliability, and

(f)Mr Pillai’s denial that he said, “I will let it go then this time” (see [65(t)] above) is contradicted by Ms Vaccaro, who corroborates Ms Nikolis’ version of this conversation.

I accept Ms Nikolis’ evidence that other staff members arrived late for work and had secondary employment, and as a result, she felt she had been unfairly singled out. I also accept, based on Ms Nikolis’ diary note, that Mr Pillai said to her on 6 September 2006 “If you want to push that one, I will be forced to start making phone calls to Bankstown and find out all about you” (see [39] above). Such a comment was not reasonable action with respect to either discipline or performance appraisal but was more in the nature of a threat. It was inappropriate.

Though I accept that some of the meetings held were conducted fairly, having regard to the entirety of the process and Mr Pillai’s conduct throughout it, I do not accept that his conduct overall amounted to reasonable action with respect to performance appraisal or discipline. I believe that Mr Pillai treated Ms Nikolis unfairly and in a way that she perceived to be bullying, intimidating and discriminating.

Finally, even if all of the above section 11A issues had been found in favour of the Health Service, there is no evidence that Ms Nikolis’ psychological injury was wholly or predominantly caused by its reasonable conduct with respect to performance appraisal or discipline. Dr Smith expressly rejected such a conclusion. Dr Lee concluded that there were many ongoing industrial and performance issues in regard to Ms Nikolis and that the Health Service acted “reasonably in line with section 11A…with regard to performance appraisal”. He did not, however, say that Ms Nikolis’ psychological injury was wholly or predominantly caused by the reasonable performance appraisal. He did not accept that Ms Nikolis had sustained a psychological injury at all, but considered “the overall circumstances of her case are inconsistent with a DSM-IV diagnosis”.

Reasons

I do not accept that the Arbitrator failed to give adequate reasons for his decision. Whilst the Health Service has referred to Beale, no particular passage is relied on and I have found the submission unhelpful. This ground of appeal has no merit. All that is necessary is that an Arbitrator states the essential ground or grounds upon which the decision rests (per McHugh JA in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 McHugh JA at 280). The Arbitrator referred to the appropriate authorities and to Mr Pillai’s evidence and concluded that the relevant actions did not constitute performance appraisal. If they did, he correctly observed that there is no evidence that the injury was due to the action taken in respect of performance appraisal.

If I am wrong on this issue, I have reviewed and considered all of the issues argued by the Health Service (apart from the finding that Ms Nikolis is suffering from an adjustment disorder with depressed mood, which is not challenged) and, for the reasons set out in this decision, I have reached the same conclusion as the Arbitrator.

CONCLUSION

Having conducted a review on the merits (per Spigelman CJ in Chemler at [28]), I have concluded that the Arbitrator’s decision is correct and I agree with his conclusions.

DECISION

The Arbitrator’s determination of 17 March 2009 is confirmed.

COSTS

The appellant employer is to pay the respondent worker’s costs of the appeal.

Bill Roche
Deputy President

3 July 2009

I, TUYET WALLIS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE