Tagudin v H.J Heinz Company Australia Limited

CERTIFICATE OF DETERMINATION OF MEMBER
Citation:	Tagudin v H.J Heinz Company Australia Limited [2023] NSWPIC 75
APPLICANT:	Agnes Tagudin
RESPONDENT:	H J Heinz Company Australia Limited
Member:	Jill Toohey
DATE OF DECISION:	1 March 2023
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987; claim for compensation for psychological injury; claim for weekly payments and medical expenses no dispute that the applicant sustained psychological injury arising out of or in the course of her employment with the respondent; no dispute that her injury was wholly or predominantly caused by action in respect of performance appraisal/discipline; dispute whether the respondent’s action was reasonable; the applicant did not dispute that the respondents action was reasonable in certain respects; applicant disputed that what happened between otherwise reasonable action was not reasonable; absence of satisfactory evidence from the respondent about what was claimed to have occurred between otherwise reasonable action; Held – finding that the respondent has not discharged its onus in respect of the section 11A defence; no dispute made to the applicant’s lack of capacity for employment as claimed; award for the applicant.
determinations made:	1. The applicant sustained a psychological injury arising out of or in the course of her employment with the respondent (deemed date of injury 22 September 2021). 2. The applicant’s psychological injury was not wholly or predominantly caused by action taken by the respondent in respect of her employment. 3. The applicant has had no current capacity for employment from 22 December 2021 as a result of her injury as claimed in the Application to Resolve a Dispute. 4. The respondent to pay the applicant weekly compensation as claimed pursuant to s 37 of the Workers Compensation Act 1987 (the 1987 Act). 5. Parties have liberty to apply with respect to the calculation of the applicant’s entitlement to weekly payments, noting that the amount claimed in the Application to Resolve a Dispute is an indexed figure. 6. The respondent to pay the applicant’s reasonable medical expenses pursuant to s 60 of the 1987 Act.

STATEMENT OF REASONS

BACKGROUND

Agnes Tagudin (the applicant) worked as a production operator for HJ Heinz Company Australia Ltd (the respondent) from around 1996.
In April 2017, Ms Tagudin was given a letter with a “First written warning” in respect of her work performance after wrong expiry code dates were placed on cartons and cans. In
June 2017, she was given a “Second written warning” letter after a similar incident.
On 26 July 2021, Ms Tagudin was asked to run the day shift production on the main line. She took over from another operator when she started her shift. She and the operator with her encountered problems feeding bottles into the line and found that incorrect labels were being put on sauce bottles. Ms Tagudin maintains this was due to the actions of the previous operator not complying with the “Quality Control check sheet” properly but that she was held responsible and accountable for the whole incident.
After obtaining a written report from Ms Tagudin and meeting with her on 10 August 2021, her manager issued her with a “final warning” letter. It advised her that failure to follow company requirements might result in further disciplinary action, up to and including termination of her employment. This letter is variously referred to in the respondent’s documents as a “first and final warning”, a “third and final warning” and a “final warning”.
On 13 August 2021, there was a further incident when incorrect temperature settings were used on a line being operated by Ms Tagudin, and the settings were higher than allowed under quality specifications.
Ms Tagudin was asked to provide a statement about this last incident. She provided a statement on 19 August 2021. She says she gave a “clear detailed outline” of her discussion with the operator from whom she took over on 13 August 2021 about the temperature settings to be used.
On or around 1 September 2021, Ms Tagudin was handed a letter from her manager inviting her to attend a meeting the following day in connection with the incident on 13 August 2021. She left work after being given the letter. She did not attend the meeting and she has not returned to work since.
Ms Tagudin claims that, throughout the course of her employment, she was subjected to bullying and harassment by the managers. In particular, between the incident on
26 July 2021 and being given the letter on 1 September 2021, she was called into the office “repeatedly” and asked for more information about the incidents. She says she thought she was being interrogated; she felt bullied, harassed and very embarrassed; managers would “constantly request for repeat meetings” at which she had to tell them again the information she had already given them.
By an Application to Resolve a Dispute (ARD) lodged with the Personal Injury Commission (Commission) on 28 October 2022, Ms Tagudin claims she sustained a psychological injury with deemed date 29 July 2021 as a result of harassment and intimidation. She claims weekly payments from 22 December 2021 to date and continuing, and medical expenses for consultations.
By dispute notices issued on 10 December 2021 and 30 June 2022, the respondent denies liability to compensate Ms Tagudin. The respondent does not dispute that she suffered a psychological injury arising out of or in the course of her employment, or that her employment with the respondent was the whole or predominant cause of her injury. The respondent maintains, however, that her injury was a result of reasonable action taken in respect of performance appraisal/discipline within the meaning of s 11A of the Workers Compensation Act 1987 (the 1987 Act).
At a preliminary conference on 25 November 2022, the applicant was given leave to amend the deemed date of injury in the ARD to 22 September 2021.
In these proceedings, the respondent does not dispute Ms Tagudin’s claim that she has had no current capacity for employment during the period claimed. There is also no dispute that her pre-injury average weekly earnings (PIAWE) were as claimed in the ARD.

ISSUE FOR DETERMINATION

The parties agree that the issue remaining in dispute is whether the respondent’s actions taken in respect of performance appraisal/discipline were reasonable.

PROCEDURE BEFORE THE COMMISSION

Parties attended a conciliation conference and arbitration hearing before the Commission on 31 January 2023. Ms Tagudin was represented by Mr Graham Barter of counsel, instructed by Ms Lauren Hunt. The respondent was represented by Mr Lachlan Robison of counsel, instructed by Mr Ron Galea. Parties were unable to reach agreement and the matter proceeded to a hearing.
I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)    ARD and attached documents;
(b)    Reply and attached documents, and
(c)    Application to Admit Late Documents (AALD) lodged by the respondent on
9 January 2023 and attached documents.

Oral evidence

There was no application to adduce oral evidence or cross-examine any witness.

Ms Tagudin’s statement taken on 29 October 2021[1]

[1] ARD page 16.

Ms Tagudin’s evidence is set out in the statement given to an investigator on
29 October 2021 and a further statement dated 14 September 2022. Because of the narrow scope of the issue in dispute, it is not necessary to recount all of her evidence.
In her statement to the investigator, Ms Tagudin states that, on 26 July 2021, she was asked to run the dayshift production on the main line. She describes the procedure before any change over including the requirement for the operator to complete a Quality Control check sheet. She states that the previous operator did not complete the check sheet properly and there were problems with bottles falling from the “in feed scroll”. As a result, incorrect labels were placed on bottles. Ms Tagudin states that, as she was the operator on the line that night, she was held accountable “for the whole incident”.
On 13 August 2021, Ms Tagudin spoke to the dayshift line operator to see if “production was running smooth that day” before starting her evening shift. The operator told her there had been some problems with seals during her shift and she instructed Ms Tagudin to run a quality control procedure at certain temperatures. Ms Tagudin says she wrote down the temperatures the operator gave her and trusted the information she was given. As it turned out, she set the temperature too high.
Ms Tagudin states that, after the problem was identified, she prepared an incident report with a detailed outline of what had happened but “they continued to request (harass) me for more information about the incident even after the quality control managers have already released all the product to our clients”.
Ms Tagudin states that, after each incident, having provided her manager with a detailed report, she thought things were “going back to normal” and she would continue with her work. However, her manager “continued to request for meetings upon meetings for both incidents.” She states that she had taken accountability as she was the line operator at the time of the incident but “it seemed like my manager was not happy” with the information “as they kept asking for repeat meetings and I find [sic] myself sounding like a broken record telling them the exact same thing I wrote on my incident report, weeks after both incidents had occurred”.
Ms Tagudin states that she started to feel very unhappy with management “as with every opportunity they got, they would call me and page me into the office repeatedly and request for more information”. She felt like she was “being interrogated for a murder case” and she felt helpless. She “felt bullied, harassed and very embarrassed and ashamed”. They would “constantly request for repeat meetings”. She developed a high level of anxiety every time they would page her to the office. She felt “unimportant and irrelevant as an employee” and was not given the right to be heard.

Ms Tagudin’s statement dated 14 September 2022[2]

[2] ARD page 1.

In her statement dated 14 September 2022, Ms Tagudin recounts the same events in similar terms. She states that, throughout the course of her employment, she was subjected to bullying and harassment by her managers.
Ms Tagudin refers to a statement of her manager, Mark Zahra, dated 29 October 2021 to the investigator. She states that she acknowledges she made mistakes in the past but learned from them and, between July 2017 in July 2021, did not make the same mistakes and completed her work “to a high standard”. She states that the company “has a policy of clearing incidents from our personal record after one year has lapsed” and it is unfair for
Mr Zahra to raise past mistakes. She feels “management held a prejudiced opinion against [her] since those events in 2017”.
Ms Tagudin states that, after the incident on 26 July 2021, “management continued to pressure me into providing more information, I told them multiple times that everything was written in the incident report”. They would not accept her version of events and she “feel pressured to admit that I was solely at fault”. She believed her managers wanted her to resign and were “looking for an excuse to fire me.”
Ms Tagudin states that other line operators accidentally used the wrong labels but they were not dealt with in the same way. Usually, an operator would be asked to prepare an incident report which would be reviewed with the managers before they returned to work with a warning. She states that the incident remains on the worker’s personal records for one year before it is cleared. She states this is “due to the nature of our work, where it is given that operators may make many simple errors over the course of our employment”.
Ms Tagudin states that, usually, management “followed protocol by asking for an incident report and holding one meeting with them”. In her case, however, they “continuously called me in for more meetings to pressure me into resigning”. She felt “humiliated in front of all the other workers as I was constantly pulled from my shift into the office”. She felt “singled out and scapegoated” over this incident.
In relation to the 13 August 2021 incident, Ms Tagudin states that, after being told the temperatures had been set incorrectly, she prepared another incident report but it was not accepted and management “continued to interrogate me”. She stated she had already given them all the information and taken accountability for both incidents but they “continue to call me in for meetings, intimidating me every two to three days”.
Ms Tagudin stated that, “throughout July 2021 and August 2021”, her managers continued to page her to the office. She heard “condescending comments” from them. Despite telling them she was experiencing “high level of anxiety” during the meetings, they continued to interrogate and harass her. She received Employee Assistance Program counselling for some time but it was not effective.
On or about 3 September 2021, Ms Tagudin saw her general practitioner, Dr Darius Adriano, who issued her with a medical certificate. Around 21 September 2021, when she had not improved, Dr Adriano referred her to a psychiatrist.

Mr Beggs’ statement[3]

[3] ARD page 11.

Ms Tagudin’s co-worker, Gavin Beggs, provided a statement dated 25 October 2022. He states that he worked with Ms Tagudin for about 15 to 20 years; she was “an incredibly hard worker” and he thought she was “very good at her job.”
Mr Beggs states that he recalls an incident on 26 July 2021 because Ms Tagudin came and told him about it “pretty quickly”. He states that it was essentially her word against another worker’s word as to mistakes on the production line, and “management sided with the other worker”. He states that, after Ms Tagudin completed an incident report, she was “continuously called into the office regarding the incident”; it was “relentless”.
Mr Beggs states that he noticed that management “started speaking to [Ms Tagudin] differently”. He often saw her being spoken to by one of the managers, Mark Zahra, who he saw “frequently coming and going to the factory floor and pulling Agnes to the side”.
Mr Beggs states that he witnessed her becoming increasingly upset as “he stood over her and it always looked like he was reprimanding her”. He identifies Mr Zahra as the manager whom he “saw constantly harassing” Ms Tagudin.
Mr Beggs states that the workplace “Is pretty well known for not having a very good culture”. He states that “some people are protected and others are victimised and bullied”.
Ms Tagudin “was constantly being threatened to be sent back to dayshift for training”. He did not witness these threats himself but it was “very well known” on the floor over some years that if she ever made a mistake management would threaten to send her back to dayshift.

Medical evidence

Given the narrow scope of the issue in dispute, it is not necessary to refer to all of the medical evidence in detail. However, Ms Tagudin relies on her statements to her doctors about being “constantly called in” to the managers’ office.

Dr Adriano’s notes

On 3 September 2021, Dr Adriano recorded that Ms Tagudin “has ongoing issue at work” and “?bullying”. He noted that she was “doing counselling” and would “file WC” and “go on leave”.[4]
[4] ARD page 99.
On 7 September 2021, Dr Adriano recorded:
“-      long story about case
-      noted 2x mistakes at work
-      has been there for 25 years
-      thinks she is being bullied
-      as she is going back and forth in the office.”[5]
[5] ARD page 98.
On 9 September 2021 and 21 September 2021, Dr Adriano recorded:
“on going generalised anxiety and depression
-      having harassment at work
-      bullying
-      had some issues at work: – noted 2x mistakes at work
-      has been there for 25 years
-      however being called repeatedly in the office”[6]
-      affecting her mental health.”[7]
[6] ARD page 97.
[7] ARD page 97.

Dr Khan’s report

Dr Abdul Khan, psychiatrist, saw Ms Tagudin for assessment on 22 April 2022 and provided a report dated 24 April 2022.[8] He was provided with documents including a Factual Investigation Report dated 29 September 2021 and annexures prepared for the respondent.
[8] ARD page 39.
Dr Khan took a history from Ms Tagudin about the incident “in or around 29 July 2021”. She recalled that she was called to the office by management to explain the situation; the union delegate attended the meeting with her. She wrote a statement but “management ignored her version of events”. She reported how she “continued to be called to meetings with management every two to three days” and she would experience anxiety and panic attacks when she was about to attend the meetings. As a result, her mental state deteriorated.
Dr Khan considered that Ms Tagudin was “totally incapacitated to work” from 13 June 2021 “to date”.
Dr Khan concluded that Ms Tagudin was “subjected to workplace stressors whereby she was repeatedly bullied, harassed, unsupported, ignored and dismissed by management”. He stated the employer’s actions were “not reasonable”. No reliance is placed by Ms Tagudin on this last statement and it is common ground that it was not for Dr Khan to determine whether the respondent’s actions were reasonable.

Dr Clark’s report

Dr Scott Clark, psychiatrist, saw Ms Tagudin for assessment on behalf of the respondent on 22 November 2021. He provided a report dated 30 November 2021.[9] He had documents relating to events in 2017 and 2021.
[9] Reply page 87.
Dr Clark took a history from Ms Tagudin about the incidents in July and August 2021. She said her manager “kept asking to see her every second day and she was unclear why this was”. She felt “singled out” and eventually “had had enough”. She said she was “continually called into the office and the other workers could see this”. She said another employee was responsible for the mistakes and she was “set up”.

Evidence of the respondent’s witnesses

Statements were provided to the investigator in 2021 by Mr Zahra, the Marketing Manager; Kiara Novak, the Human Resource Business Partner; Joanne Suapopo who worked on the line with Ms Tagudin; and Peter Masi, the union delegate.
Further statements were provided in the course of these proceedings by Mr Zahra and
[10] Respondent’s AALD file on 9 January 2023.
Ms Suapopo, and by Jonathon Palmer who also worked on the production line.[10]

Mr Zahra’s statements

Mr Zahra told the investigator about incidents on 7 April 2017 and 8 June 2017 in which
[11] Reply page 2. Statement taken on 1 November 2021, signed on 29 October 2021.
Ms Tagudin was responsible for incorrect expiry dates being placed on products. On both occasions she was asked to provide a handwritten statement before a decision was made as to what should happen.[11]
Mr Zahra stated that, following the incident on 7 April 2017, Ms Tagudin was issued with a first written warning which would remain on her personal record for 12 months from the date of incident. Following the incident on 8 June 2017, she was issued with a second written warning.
Mr Zahra described to the investigator what happened on 25 July 2021. He said Ms Tagudin provided a formal statement about the incident and attended the formal meeting on
10 August 2021 with Mr Masi as her support person. In her statement, she “highlighted that she had made an error by just writing the information from the online folders” without checking them. As a result of her admissions, it was determined that the matter warranted the issuing of “a third formal and final warning”. It was agreed that dismissal would be suspended on account of the number of years Ms Tagudin had been employed.

Mr Zahra told the investigator there was a further incident on 13 August 2021 when
Ms Tagudin was responsible for the wrong temperature setting being selected, causing the afternoon shift production to be placed on hold, and causing considerable cost to the company. She was asked to complete an incident form. On reviewing her statement, it was decided that a letter with a meeting time and place should be issued. She has not returned to work since and the matter remains under investigation.
In his second statement, dated 18 November 2022, Mr Zahra referred to Ms Tagudin’s statement dated 14 September 2022 and to his previous statements dated 1 November 2021 and 18 November 2022. (A separate statement dated 18 November 2022 does not appear to be in evidence but nothing appears to turn on this.)
Mr Zahra stated that Ms Tagudin was asked to attend a room in the office on
1 September 2021 where she was given a letter of invitation to a meeting on
2 September 2021. Her union delegate was present when the letter was handed to her.
Mr Zahra started that, in his opinion, Ms Tagudin was aware she had been issued with a third and final warning before this last incident and that she was likely to be terminated as a result of the investigation.

Ms Novak’s statement

Ms Novak provided a statement to the investigator on 1 November 2021.[12] She left the respondent’s employ around September 2021 and has not provided a further statement.
[12] Reply page 9.
Ms Novak states that, in her last few months working for respondent, Mr Zahra brought to her attention concerns about errors made by Ms Tagudin which had led to products requiring reworking or dumping.
Ms Novak states that Ms Tagudin had 25 years’ service with the respondent; there was “a series of incidents” over the last three to four years where she had made similar errors. On each occasion she was asked to prepare a statement after which a notice of meeting would be provided and she would be asked to attend a meeting. Ms Novak states that the notice of meeting invites an employee to bring a support person if they wish and is “standard procedure” for the respondent when investigating all incidents.
Ms Novak refers to the incidents in 2021 and to a meeting with Ms Tagudin at which Mr Masi was present. (As there was only one meeting that Ms Tagudin attended, it appears this was the meeting on 10 August 2021.) Ms Novak describes the discussion and the decision that, given her duration of service, Ms Tagudin would be given a “1^st and final warning”. Ms Novak states that “Falsification of Quality Assurance documentation” is considered to be serious misconduct which in any other circumstances would warrant termination. However, taking account of Ms Tagudin’s time with the business and her honesty during the conversation, giving her the warning was considered the right approach.
Ms Novak states that the meeting was left “amicably with gratitude shown from [Ms Tagudin] and understanding on the severity of the issue and commitment that she would follow the process moving forward”.
Ms Novak states that, a few weeks later, Mr Zahra reported another incident where an incorrect temperature was set. Ms Tagudin was asked for a statement. In her statement, she referred to a conversation with Ms Suapopo about the temperature settings.
Ms Novak states that as a result of statements by Ms Suapopo about Ms Tagudin’s mental health, Ms Novak had concerns about her welfare and spoke with Mr Zahra. They met with Ms Tagudin that afternoon about the conversation with Ms Suapopo; Ms Novak expressed concern for her welfare as a valued employee; it was “an open discussion with her and she was offered the Employee Assistance Program”. Ms Tagudin went into the next room and contacted the provider herself and made an appointment for the next day. She was instructed to take some time off and arrangements made for her son to pick her up or a taxi to be called to take her home.
When Ms Tagudin returned to work after some time off. Ms Novak states that she assisted Mr Zahra in preparing a notice of meeting to discuss and finalise the issue relating to the temperature checked recordings. She states that Ms Tagudin was given the notice but, on the day of the meeting, she did not attend work and they were told she was unwell and in hospital with chest pain.
Ms Novak states that, in all the circumstances, the respondent ensured that Ms Tagudin was treated fairly and given procedural fairness; she was given ample notice prior to discussions and the outcome was never decided without first considering her response.

Ms Suapopo’s statements

Ms Suapopo provided a statement dated 1 November 2021[13] to the investigator and a further statement dated 19 November 2022.[14] She describes what she says happened in the incident on 13 August 2021 when Ms Tagudin took over from her on the production line. She disputes Ms Tagudin’s account and states she did not instruct her in regard to any particular temperature.
[13] Reply page 5.
[14] Respondent’s AALD page 11.

Mr Palmer’s statement

Mr Palmer provided a brief statement dated 21 November 2022.[15] He describes the incident on 13 August 2021. He states that he and Ms Suapopo did not “put the old rewind back on” as Ms Tagudin claims, and he recorded all temperatures in his notebook.
[15] Respondent’s AALD page 13.

Mr Masi’s statement

Mr Masi provided a statement dated 1 November 2021 to the investigator.[16] He states that he was the support person for Ms Tagudin when she received her first and second warnings. He believes these investigations were conducted appropriately but he is aware that Ms Tagudin “felt she was being targeted and sometimes was targeted in general”. He states that, while he believes her opinions are genuine, he does not think she was actually treated differently from other staff members.
[16] Reply page 7.
In relation to the first incident in 2021, Mr Masi states that Ms Tagudin “Clearly was at fault for not conducting adequate checks” but he also felt that “the management seemed content to focus their attention on her when some of the blame should have been apportioned to the previous team”. He stated that Ms Tagudin felt she was not alone in making errors but was the only one being held accountable”.

Warning letters and notice of meeting

The “First Written Warning” was issued to Ms Tagudin on 7 April 2017 in relation to the incident that day.[17] It referred to the additional cost through labour and materials involved in rectifying the error. It stated that, having considered a handwritten statement to her manager, it had been decided to issue her with the first written warning which would remain on her personal record for 12 months; further failure to meet company requirements within that time would result in termination.
[17] Reply page 67.
The “Second Written Warning” was issued to Ms Tagudin on 22 June 2017 about a similar incident on 8 June 2017. It referred to consideration of her handwritten response and a meeting with her, her union delegate and Mr Zahra. It stated that the decision to issue a second written warning would remain on her personal record for 12 months; further failure to meet company requirements within that time would result in termination.
On 9 August 2021, Mr Zahra gave Ms Tagudin a notice inviting her to a meeting the following day with himself and Ms Novak to discuss her performance in relation to not completing certain checks.[18] The letter stated that the meeting would discuss these concerns and she would be given an opportunity to respond. It emphasised that no conclusion had been drawn or any decisions made at that stage, and none would be until they had heard and deliberated on her response. The letter advised Ms Tagudin that she was entitled to bring a support person to the meeting.

SUBMISSIONS
[18] Reply page 85.

A transcript of parties’ oral submissions is available. The following is a summary.

The applicant’s submissions

Mr Barter submits that it is common ground that the test of reasonableness is as set out in Northern NSW Local Health District v Heggie.[19]
[19] Northern New South Wales Local Health Network vHeggie [2013] NSWCA 255 (Heggie).
Mr Barter submits that, as a starting point, one would expect an employer dealing with an employee of 25 years’ standing would tread carefully in respect of any shortcomings in performance. He submits that the respondent refers to a total of four incidents, two of them in 2021, in 25 years of Ms Tagudin’s service. Mr Barter submits that any harsh treatment in those circumstances would have to be, on its face, unreasonable. In particular, Mr Barter submits, it is unreasonable to take into account failures or shortcomings from many years earlier. He submits that the respondent has not properly addressed this aspect.
Mr Barter submits that the nub of Ms Tagudin’s case is that she accepted responsibility for her shortcomings but her managers kept pressuring her. They continued to call her into the office and she felt belittled. Her claim is supported by Mr Beggs who says she was continually called to the office and he saw Mr Zahra constantly harassing and pulling her over.
Mr Barter submits that Ms Tagudin’s evidence about this is supported by the medical evidence which documents what she told Dr Adriano, Dr Khan and Dr Scott about being called repeatedly to meetings despite having already provided a statement about what had happened. Mr Barter submits that Ms Tagudin has given consistent accounts about this, and her claim about how she was treated is not a recent invention.
Mr Barter submits that Ms Tagudin accepts that the incidents in 2017 were properly dealt with by the respondent.
Mr Barter submits, and it is common ground, that I do not have to determine whether the way in which Ms Tagudin was treated amounted to bullying or harassment. Nevertheless, he submits, the respondent’s actions with respect of performance appraisal and discipline were unreasonable.
Mr Barter submits that Mr Zahra did not simply obtain an incident report from Ms Tagudin, and then determine what action to take, he kept re-visiting the incident, calling her in to the office and demanding further explanations, and it was this that caused the problem for her.
Mr Barter accepts that the formal meetings in 2021 were reasonable but submits that what happened in between them was harassment and was not reasonable. He submits that the respondent’s actions were not reasonable in between otherwise reasonable meetings.
Mr Barter submits that the respondent has not addressed Ms Tagudin’s evidence about what occurred in between the incidents in 2021. He submits that the allegations are clear from
Ms Tagudin’s statements and the medical evidence, but Mr Zahra has not responded to them, he has not denied her evidence and it should be accepted.
With reference to Heggie at [59], Mr Barter submits that it is not enough that the respondent thought its actions were reasonable; a broad view must be taken which extends to the whole process. Mr Barter submits that the whole process includes what happened in between what were otherwise reasonable meetings.

The respondent’s submissions

Mr Robison refers to the principles in Irwin v Director General of School Education[20] and submits that the test of reasonableness is an objective one, considering all the factors including the rights of the employer and the employee.
[20] Irwin v Director General of School Education Compensation Court of NSW, Geraghty CCJ, 18 June 1998, no 14068 of 1997, unreported (Irwin).
With reference to Heggie, Mr Robison submits that it is not a matter of taking a broad view generally of the respondent’s actions; the only relevant conduct is that concerning performance appraisal and discipline. The broader question of whether Ms Tagudin was subjected to bullying is not relevant to determining the s 11A defence.
As to the period 2017 to 2021, Mr Robison submits that Ms Tagudin cannot have it both ways; she cannot rely on her long employment at the same time as saying the responded can have no regard to the earlier events.
Mr Robison submits that Ms Tagudin concedes in her statement that incorrect labels were placed on products on 26 July 2021. The respondent’s business is the manufacture of food and there is no dispute that great care needs to be taken in its preparation and that mistakes can result in serious repercussions including economic cost.
Mr Robison submits that the evidence shows the clear procedure which the respondent followed when Ms Tagudin made mistakes. The issue is not whether she felt she continued to be pressured or humiliated but whether it was reasonable for the respondent to obtain full information to ensure the error did not occur again.
Mr Robison submits that Ms Tagudin’s feelings about feeling pressured, singled out and scapegoated are clearly subjective. She states that her managers continued “to interrogate her” but that is a loaded term and not what occurred, and whether or not any mistakes were “innocent”, the respondent had to take action. With respect to Ms Tagudin’s evidence that her managers continued to call her in throughout July and August, Mr Robison submits that the evidence is a little unclear. However, he submits, looked at as a whole, Ms Tagudin had made errors in food safety and it was incumbent on the respondent to take action. She had to be overseen due to the recent concerns. If she was treated differently, and Mr Masi disagrees, it was because she had made errors. She refers to other workers but she gives no examples.
Mr Robison submits that the respondent acted fairly. It took into account Ms Tagudin’s long history of service. No doubt she felt anxious but an employer cannot simply not investigate because it would cause a worker anxiety; the safety issue for consumers is real. The fact that the Employee Assistance Program may not have been effective for her is not relevant to the present inquiry.
Mr Robison submits that, by Ms Tagudin’s own evidence, the respondent’s procedure was fair. She was asked to give an incident report, which she did. She was able to give her version of events, it was not an informal process, it was fair to her.
Mr Robison submits that I would give little weight to Mr Beggs’ letter: his statement is tainted by hearsay and speculation; it was not clear even to him why Ms Tagudin was being spoken to; he says she was called into the office but he was not there; he says Mr Zahra stood over her and always “looked like he was reprimanding her” but he does not say he heard the conversation; he says Mr Zahra was the manager he saw “harassing” Ms Tagudin but he does not say what the harassment comprised.
With respect to the 2017 notices being “placed on record for 12 months”, Mr Robison submits that statement in the notices does not prevent the respondent from having regard sometime later to that behaviour. Following Irwin, regard must be had to the detriment caused to an employer by errors including product recalls and reputational damage. Mr Zahra[21] describes how heavily-regulated the food industry is for these reasons.
[21] At [17].
With respect to Ms Suapopo’s statement, Mr Robison submits there is a disagreement about what occurred but it seems that the error was solely Ms Tagudin’s. Regard should be had to Mr Masi’s statement in which he thought the earlier investigations were proper. Mr Masi did not think she was being treated differently or singled out.
Mr Robison submits that Ms Novak’s statement describes the procedures followed by the respondent including taking account of Ms Tagudin’s long service. She was given additional training about processes to assist her to return to a good standard. According to Ms Novak, the meeting on 10 August 2022 ended amicably. There is no suggestion of nastiness or raised voices. Mr Robison submits that, in all respects, Ms Tagudin was given procedural fairness and there was an overwhelming concern for her well-being including giving her time off and referring her to the Employee Assistance Program.
Mr Robison submits that the evidence shows that the quality of Ms Tagudin’s work seems to have declined, and the respondent could not ignore what had happened. The Commission’s task is not to “trawl for error” in the process but to determine whether the respondent’s action was reasonable in the circumstances. Mr Robison submits that the respondent has discharged its onus.
With respect to Ms Tagudin’s capacity for employment, Mr Robison submits that capacity has been accepted on the totality of the evidence and he makes no submissions in this regard.

Submissions in reply

Mr Barter submits that Dr Adriano, Dr Clark and Dr Kahn all took a history of Ms Tagudin being called into meetings repeatedly and that this caused her to feel embarrassed and led to her anxiety and distress. Mr Barter submits that this action was the cause of the problem.
Mr Barter submits that it was clear from Ms Tagudin’s statements that this was the gravamen of her claim. She made it clear in her statement to the investigator and in her subsequent statement. Both were available to Mr Zahra when he provided his supplementary statement on 18 November 2022. He has not addressed this part of her claim and there is no evidence contrary to it. The respondent’s actions in between what were otherwise reasonable meetings meant that, taken as a whole, the respondent’s action in respect of performance appraisal/disciplinary action was not reasonable.
Mr Barter refers to the decision of Deputy President Roche in Attorney General v K[22] and the principles at [52] concerning a worker’s perception of events.
[22] Attorney General v K [2010] NSWWCPD 76 (A-G v K).

CONSIDERATION

Section 11A(1) of the 1987 Act provides:
“No compensation is payable under this act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.”
The respondent bears the onus of establishing, on the balance of probabilities, its defence that Ms Tagudin’s injury was the result of the action within the meaning of s 11A(1), that it was the whole or predominant cause of her injury, and that such action was reasonable.
In this case, there is no dispute that Ms Tagudin sustained a psychological injury arising out of or in the course of her employment with the respondent. There is no dispute that her injury was wholly or predominantly the result of the respondent’s actions with respect to “performance appraisal/discipline”. While “performance appraisal” and “discipline” have somewhat different meanings, no issue is taken with the respondent’s formulation of its action in this way, and any difference is not material in the circumstances of this case.
Ms Tagudin claims that she was subjected to bullying and harassment “throughout her employment” with the respondent. I understand her to say that this conduct occurred from at least 2017 to 2021. Mr Robison submits, and I agree, that whether or not any conduct amounted to bullying and harassment, and whether Ms Tagudin was in fact bullied and harassed prior to events around July and August 2021, is not relevant to the issue to be determined. Nor is it relevant whether conduct during that time of itself amounted to bullying and harassment.
The sole issue for determination is whether the respondent’s action with respect to “performance appraisal/discipline” were reasonable.
In Irwin, Geraghty CCJ said:
“... The question of reasonableness is one of fact, weighing all the relevant factors. That test is less demanding than the test of necessity, but more demanding than the test of convenience. The test of reasonableness is objective and must weigh the rights of employees against the object of the employment. Whether an action is reasonable should be attended, in all the circumstances, by questions of fairness.”

In Heggie, AJA Sackville said with respect to discipline, but with equal application to performance appraisal:
“The test of reasonableness is objective. It is not enough that the employer believed in good faith that the action with respect to discipline that caused psychological injury was reasonable. Nor is it necessarily enough that the employer believed that it was compelled to act as it did in the interests of discipline.”
In Department of Education vSinclair,[23] Spigelman CJ observed that the entire process must be looked at to see if it was reasonable action within s 11A, including looking at the circumstances surrounding the action, both before and after the action.
[23] Department of Education v Sinclair [2005] NSWCA 465; 4 DDCR 206 (Sinclair).
Ms Tagudin acknowledges the two incidents in 2017. She says she acknowledged her mistakes and learned from them. There is no evidence of any further incidents or concerns about her performance until July 2021.
Mr Barter submits that it was unreasonable for the respondent to take into account
Ms Tagudin’s failings from many years earlier, in 2017.
It appears that the respondent did place some weight on those earlier errors when Ms Tagudin was alleged to have made further errors in 2021.
Mr Zahra states that Ms Tagudin had made “a number of serious mistakes in a short time” and he refers to “a number of significant errors”.[24] He states that she was “aware that she had already been issued with a third and final warning” prior to the last incident and that she was likely to be terminated as a result of the investigation.
[24] Statement dated 18 November 2022 at [10] and [12].
The respondent’s letter dated 10 August 2021 refers to it being “a final warning”. It refers only to the incident on 26 July 2021. However, it appears the respondent did take into account the warnings issued previously, in 2017. Mr Zahra evidently placed some weight on them because he referred to those incidents in some detail in his statement dated
1 November 2021 and he stated that it was determined to issue Ms Tagudin with “a formal and final warning”.
Assuming that the respondent took into account the 2017 incidents together with the incident on 26 July 2021, I am not persuaded that was necessarily unreasonable. It is true that there is no evidence that Ms Tagudin’s performance was called into question in the interim. It is also true that both warning letters in 2017 stated they would remain on her personal record for 12 months from the date of incident. They also stated that any further failure within the following 12 months would result in termination of her employment.
Ms Tagudin states that the respondent failed to adhere to its own policy by failing to “clear incidents” from personal records after one year has lapsed. Assuming that is the respondent’s policy, it is not really clear what it means. It is unlikely that it means that all record of an incident which warrants a warning is wiped from an employee’s record.
In any event, despite the second warning letter being issued less than three months after the first in 2017, it does not appear any action was taken at that time to terminate Ms Tagudin’s employment, as the first letter warned. Whatever the reason, Ms Tagudin had the benefit of the respondent’s inaction. Moreover, it does appear that her long years of service were taken into account in 2021 because termination action was suspended after the incident on
26 July 2021 for that reason.
It would depend on the circumstances of the case whether taking into account incidents from some years earlier is reasonable or not.
In Sinclair, Spigelman J said the “entire process”, including the circumstances surrounding the action, both before and after, must be looked at to see if it was reasonable action within
s 11A. However, in the circumstances of this case, I do not think the “entire process” extends to incidents in 2017 and the interim to July 2021, even if the incidents in 2017 played some part in how the respondent dealt with what happened in 2021. Ms Tagudin acknowledges she made mistakes in 2017 and I do not understand her to complain about the way they were dealt with then.
The following sequence of events is not in dispute. The first incident in 2021 occurred on
26 July 2021. Ms Tagudin was asked to provide a written report. She provided a statement dated 27 July 2021.[25] On 10 August 2021, she attended a meeting with Mr Zahra and
[25] Reply page 80.
Ms Novak. Mr Masi also attended. By letter dated 10 August 2021, Mr Zahra wrote to her documenting the outcome of the meeting and advising it had been determined that the matter would attract disciplinary action and the letter was to be considered a final warning.
There was a further incident on 13 August 2021. Ms Tagudin provided a statement dated
[26] Reply page 75.
19 August 2021.[26] On or around 1 September 2021, she was handed a letter from Mr Zahra inviting her to attend a meeting the following day in connection with this second incident. She did not attend the meeting and she has not returned to work since.
The history shows that events in 2021 spanned the period from 26 July 2021 to around
1 September 2021.
Ms Tagudin does not complain about the process of issuing her with letters in 2021, or what occurred at the meeting on 10 August 2021. Mr Barter acknowledges they were an “otherwise reasonable” process. Ms Tagudin’s claim is that the respondent’s actions in between those meetings, in particular those of Mr Zahra, rendered an otherwise reasonable process not reasonable.
Ms Tagudin states her manager “kept asking for repeat meetings”; they would “page” her to the office repeatedly and request more information; they would “constantly request for repeat meetings”; they called her in for meetings” every two to three days”.
Dr Adriano took a history on 7 September 2021 and 9 September 2021 that Ms Tagudin was “going back and forth in the office” and was “being called repeatedly in the office”, and this was affecting her mental health. Dr Clark took a similar history on 22 November 2021, and
Dr Khan took a similar history on 22 April 2022.
No real challenge is made to Ms Tagudin’s evidence about what happened between the incident on 26 July 2021 and when she left work, and no challenge is made to the doctors’ records and reports. It is not to the point whether she felt “bullied”, “harassed” or “intimidated” by what was happening.
Mr Barter referred to the principles in A-G v K but they concern the issue of causation, in particular the relevance of a worker’s perception of events. The test of reasonableness for the purposes of s 11A is objective. The principles in A-G v K do not assist me here. The issue is whether the respondent’s action, viewed objectively, was in its entirety reasonable.
Mr Robison acknowledges that the evidence is “unclear” as to Ms Tagudin’s evidence that her managers continued to call her in throughout July and August. However, he submits, it was incumbent on the respondent to take action given the nature of its business and the potential consequences of errors for consumers and the business alike. Mr Robison submits that the respondent had to monitor and supervise Ms Tagudin to ensure there was no repeat of the errors.
The only evidence submitted by the respondent about the high degree of regulation imposed on the food manufacturing industry and the potential consequences of errors for its business is in Mr Zahra’s statement dated 18 November 2022. However, no challenge is made to that evidence or to Mr Robison’s submissions, and I accept it is a matter of common knowledge that safety in the food manufacturing industry is of critical importance. I accept that an employer such as the respondent has to take action when errors occur.
The difficulty with the submission is that the respondent has provided almost no evidence to counter Ms Tagudin’s claim that she was called repeatedly to meetings throughout July and August 2021 or to explain their purpose. If it was for the purpose of closely monitoring and supervising her performance as Mr Robison submits, there is no evidence to that effect.
Mr Zahra provided a statement dated 18 November 2022 in response to Ms Tagudin’s statements. He had to be aware that she was claiming that being asked to explain her actions repeatedly was causing her psychological symptoms. He stated that, to his knowledge, she was “only interviewed once by management”. He really has not addressed her claims with any specificity, he has not disputed her claims, and his statement is difficult to reconcile with the submission that she was being closely monitored and supervised during this period because of her declining performance and repeated errors.
For the reasons submitted by Mr Robison, I place no weight on Mr Beggs’ statement.
In the absence of any better evidence from the respondent to the contrary, I accept Ms Tagudin’s claim that she continued to be asked for explanations of what occurred in July 2021 and August 2021 after she had provided a statement about what had occurred and after she had been given a formal warning about the incident on 26 July 2021. Whether she believed the incidents had been dealt with is not to the point. Other than Mr Zahra’s statement that, to his knowledge she was only interviewed once by management, the respondent has not countered her claims or provided any explanation as to why it was necessary to call her in for questioning repeatedly as she claims.
I find that what occurred between 26 July 2021 and around 1 September 2021 formed part of the performance appraisal/discipline process overall and that it played a significant part in causing Ms Tagudin anxiety and distress. I am not satisfied, on the evidence, that it was reasonable action.
I am not persuaded that the respondent has discharged its onus of establishing on the balance of probabilities that Ms Tagudin’s psychological injury was wholly or predominantly caused by reasonable action in respect of performance appraisal/discipline.
With respect to Ms Tagudin’s capacity for employment, no challenge is made to her claim for weekly benefits from 22 December 2021 and continuing. Parties agree that her PIAWE is as pleaded in the ARD, noting that this is an indexed figure. There will be an award for the applicant for payment of weekly compensation in accordance with the claim in the ARD, with liberty to apply in respect of the calculation. There is also an award for medical expenses pursuant to s 60 of the 1987 Act.

[2023] NSWPIC 75

1 March 2023