The Hills Shire Council v Podesta
[2023] NSWPICPD 10
•9 March 2023
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY A MEMBER | |
CITATION: | The Hills Shire Council v Podesta [2023] NSWPICPD 10 |
APPELLANT: | The Hills Shire Council |
RESPONDENT: | Michael Anthony Podesta |
INSURER: | StateCover Mutual Limited |
FILE NUMBER: | A1-W3481/21 |
PRESIDENTIAL MEMBER: | Acting Deputy President Geoffrey Parker SC |
DATE OF APPEAL DECISION: | 9 March 2023 |
ORDERS MADE ON APPEAL: | 1. The Certificate of Determination dated 23 March 2022 is confirmed. |
CATCHWORDS: | WORKERS COMPENSATION – section 11A of the Workers Compensation Act 1987 – whether action taken by the employer with respect to discipline was reasonable – adequacy of reasons – section 294 of the Workplace Injury Management and Workers Compensation Act 1998 and rule 78 of the Personal Injury Commission Rules 2021 |
HEARING: | On the papers |
REPRESENTATION: | Appellant: |
| Mr F Doak, counsel | |
| Bartier Perry Lawyers | |
| Respondent: | |
| Mr P Perry, counsel | |
| Carroll & O'Dea Lawyers | |
DECISION UNDER APPEAL | |
MEMBER: | Ms J Toohey |
DATE OF Member’s DECISION: | 23 March 2022 |
INTRODUCTION AND BACKGROUND FACTS
This is an appeal from a Certificate of Determination issued on 23 March 2022.
The following factual chronology is uncontroversial and is taken largely from the appellant’s chronology.
In 2004 Mr Podesta, the respondent to the appeal, was employed by The Hills Shire Council, the appellant, as a trades assistant. In 2016 he was promoted to workshop team leader.
In mid-2017, Mr Gallahar was appointed workshop coordinator.
Shortly after Mr Gallahar’s appointment there emerged conflict between Mr Gallahar and members of the workshop, including Mr Podesta.
In mid-2020, six of the eight members of the workshop team, including Mr Podesta, submitted a formal grievance about Mr Gallahar.
On 20 August 2020, Mr Colburt, group manager of the appellant, arranged for a mediation at which Mr Podesta expressed some of his grievances. Mr Gallahar denied the allegations. Mr Podesta left the meeting.
On 23 September 2020, Mr Colburt met with workshop staff and advised them that Mr Gallahar has raised a number of issues about the workshop’s practices. He informed the staff that the appellant would investigate the issues.
On 25 September 2020, Mr Gallahar resigned his employment with the appellant. From about this time, Mr Podesta took on some purchasing duties.
In around October 2020 there was a restructure and a new team leader, Mr Zanetic, was employed.
In November 2020, shortly after his appointment, an anonymous letter was left on Mr Zanetic’s desk containing the following words:
“We sacked the last guy, look out or you will be next.”
On 17 November 2020, Mr Edgar, the appellant’s general manager, called a meeting of the workshop employees.
Some two days after this meeting there was an unauthorised stoppage by members of the workshop staff.
On 25 November 2020 letters were sent to the workshop staff, including Mr Podesta, notifying them of interviews to be conducted by an external investigator about the note and other workshop practices.
On 4 December 2020 Mr Podesta was interviewed by the external investigator.
On 24 December 2020 Mr Podesta took annual leave until early February 2021.
On 20 January 2021 Mr Podesta consulted Dr Singh who recorded for the first time a history of stress at work and at home.
On 5 February 2021 Mr Podesta attended a second interview with the external investigator.
On 7 February 2021 Mr Podesta consulted with Dr Singh, who recorded a history that Mr Podesta felt stressed and unable to go back to work. He was given a certificate of unfitness for work.
On 12 March 2021 the appellant wrote to Mr Podesta inviting him to respond to allegations based on the investigator’s report.
On 13 March 2021 Mr Podesta submitted workers compensation claim forms.
THE MEMBER’S STATEMENT OF REASONS AND FINDINGS
By way of a preliminary procedural issue, the appellant sought leave to cross-examine Mr Podesta. The proposed cross-examination was as to the history he gave to the doctors about his various activities and the work he performed on his motor vehicle. The appellant submitted that Mr Podesta’s bank records raised questions about that history and that Mr Podesta’s credibility was in question in the statement evidence. Further, it was submitted that there was evidence which went to Mr Podesta’s capacity for employment.
The Member declined an application for leave to cross-examine the respondent.[1]
[1] Podesta v The Hills Shire Council [2022] NSWPIC 122 (reasons), [22].
The Member identified the agreed issues in dispute as follows:
“(a) whether Mr Podesta suffered a disease injury with deemed date 5 February 2021 to which his employment was the main contributing factor;
(b) if so, was the whole or predominant cause of his injury reasonable action taken or proposed to be taken by the [appellant] in respect of discipline;
(c) whether Mr Podesta has had incapacity as a result of any injury, and
(d) whether he is entitled to compensation for medical expenses.”[2]
[2] Reasons, [10].
It was not in dispute that Mr Podesta had a psychological injury arising out of or in the course of his employment with the appellant.[3]
[3] Reasons, [170].
By reference to the medical evidence of Dr Kaplan (psychiatrist for the appellant), Dr Chow (psychiatrist for the respondent), Dr Singh (treating GP) and Ms Morris (treating psychologist), the Member found that Mr Podesta’s employment was the main contributing factor to his psychological injury.[4]
[4] Reasons, [174].
The Member identified the “real dispute” to be “around whether events between mid-2017 and late 2020 caused or contributed to Mr Podesta’s injury and whether it was wholly or predominantly caused by reasonable action taken in respect of his employment from around the end of 2020.”[5]
[5] Reasons, [175].
The Member accepted that from the time Mr Gallahar commenced work in mid-2017, relationships in the workshop became difficult and ultimately toxic. She said that those relationships were so bad that in 2020 six employees lodged a formal grievance against Mr Gallahar, resulting in the appellant arranging a mediation. She said:
“It is a reasonable inference that the [appellant] recognised the extent to which relationships had gone bad or it would not have organised mediation (also referred to as a ‘workshop’).”[6]
[6] Reasons, [177].
The Member was not persuaded that Mr Podesta had sustained psychological injury as a result of what happened in the workplace between mid-2017 and around November 2020.[7]
[7] Reasons, [182].
The appellant conceded that the psychological injury was probably predominantly, if not wholly, the result of the action taken by the respondent in calling the meeting on 17November 2020 and the subsequent investigation.[8]
[8] Reasons, [188].
The Member said:
“I accept that Mr Podesta felt stressed and upset following the meeting on 17 November 2020 and as a result of the subsequent investigation. I accept the evidence of Mr Edgar and Mr Colburt that Mr Podesta did not appear upset when they met two days later. Mr Edgar’s description of their conversation suggests he may have been trying to ingratiate himself but, regardless, his conduct at that meeting is not enough to conclude Mr Podesta was not feeling upset and felt his employment was under threat as he claims.
Mr Podesta continued at work, apparently without any time off, until 24 December 2020 but I accept Mr Perry’s submission that workers often continue working despite difficulties. Mr Podesta reported to Dr Singh on 20 January 2021 and in subsequent visits that he had been under a lot of stress at work and had had problems with his manager two years earlier. His complaint to Dr Singh was reasonably contemporaneous with the meeting and investigation.”[9]
[9] Reasons, [186]–[187].
The Member found that the disciplinary process started at the meeting of 17 November 2020 and she identified the question as whether “the action taken was reasonable?”
She directed herself as to the relevant legal test by reference to passages from Irwin v Director General of School Education[10] and Northern New South Wales Local Health Network v Heggie.[11] She noted, relying upon what was said in Department of Education and Training v Sinclair,[12] that it was the entire process that must be looked at to see if what occurred was reasonable action within s 11A of the Workers Compensation Act 1987 (the 1987 Act).
[10] Compensation Court of NSW, Geraghty CCJ, 18 June 1998, No 14068 of 1997, unreported (Irwin).
[11] [2013] NSWCA 255; 12 DDCR 95 (Heggie).
[12] [2005] NSWCA 465; 4 DDCR 206 (Sinclair).
The Member found, agreeing with the appellant’s submission, “that it was reasonable for Mr Edgar to call a meeting of the workers when an anonymous letter was left with the clear intention of intimidating the new manager. It was a serious matter and needed prompt action. However … [she was] not satisfied that the meeting and the investigation that followed was reasonable action with respect to discipline.”[13]
[13] Reasons, [194].
Firstly, she noted that Mr Edgar consulted with and obtained advice from Ms Coleman, the HR manager, and Mr Colburt. However, that did not mean that what occurred was “reasonable action”.[14]
[14] Reasons, [195].
Secondly, she observed that on the evidence it was difficult to determine what had occurred at the meeting of 17 November 2020.[15]
[15] Reasons, [196].
The Member made a finding of fact that it was more probable than not that Mr Edgar had raised his voice at the meeting. She found:
“That might not of itself be enough to say the manner in which he conducted it was not reasonable but it was not appropriate, in my view to suggest that someone in the team was responsible, no matter how reasonable in his mind that conclusion seemed. It might be appropriate to say that was his suspicion but the evidence indicates that his tone was accusatory. Nor was it appropriate to refer to the exhaustive police investigation of the Claremont serial killings.”[16]
[16] Reasons, [197].
The evidence as to whether Mr Edgar threatened anyone was noted by the Member to be conflicting. She was unable to conclude that he used the words to the effect that he would “sack the lot of them”, however, she was able to accept Ms Coleman’s evidence that he used words to the effect that “if things did not change, they would be out of work because there would be no workshop”. She noted that Ms Coleman said the comment was not made in any sort of threatening or aggressive manner. However, the Member accepted “that it was at least perceived to be a threat” to the employment of the workshop staff attending the meeting. The Member found that the comment was not “appropriate”.[17]
[17] Reasons, [198].
The Member said:
“It is clear that problems in the workplace ‘culture’ had been identified over previous months and had been spoken about at the mediation session. However, it [was] not clear that they were put clearly to the workers, and to Mr Podesta in particular.”[18]
[18] Reasons, [199].
The Member noted that in his letter dated 20 August 2020, Mr Colburt said that Mr Edgar had become aware of allegations of inappropriate behaviour that may extend across several team members, but it was not clear what the “inappropriate behaviour” was, although it appeared to her that it may have been allegations made by Mr Gallahar in response to the complaint against him. The Member said it was not clear from the evidence, “that the allegations were ever put to the team and to Mr Podesta in particular”.[19]
[19] Reasons, [201].
Of the letter dated 25 November 2020, the Member quoted the letter advising of a decision to conduct a workplace investigation “into various alleged inappropriate practices that may constitute breaches of Council’s Code of Conduct and policies and procedures” including the recent incident of the threatening letter.
The Member said:
“The letter gave no indication of what the other ‘alleged inappropriate practices’ were.
Mr Podesta claims he was ‘shocked’ to find at the first meeting that the investigator focused on issues including buying parts for his personal car and inappropriate conduct towards a former female employee. He says he was ‘shocked and unprepared’ because he understood the investigation would focus solely on the anonymous letter … he was ‘shocked and upset’ when he was questioned during the second interview, about methods for raising purchase orders and about the ‘legal side of local government procurement’ and that the investigator said he might be subject to further questioning.”[20][20] Reasons, [203].
The Member further said:
“The allegations and concerns involved serious matters, some potentially criminal. Neither Mr [Colburt] nor Mr Edgar says they were put directly to Mr Podesta prior to the first interview.
Mr Podesta claims the additional matters raised at the interviews had never been discussed with him. Given he had attended the mediation session, I find it improbable that he had no idea of what might be discussed at the meeting with the investigator but it was not enough for the respondent to refer in broad terms to ‘inappropriate conduct’. It is not enough for Mr [Colburt] to say that at no point was Mr Podesta informed that the investigation was going to be only about the anonymous letter and at no point did Mr Podesta raise that concern with him, and it is not enough for Ms Coleman to say that he was never told it would be only about the letter.”[21]
[21] Reasons, [206]–[207].
The Member referred to BlueScope Steel Ltd v Markovski[22] and the passage at [196] that basic fairness required “advance notice of the meeting, the agenda, and the opportunity to bring a support person”. Mr Podesta was given advance notice of the interview and was given an opportunity to have a support person with him, but he was not given advance notice of the topics to be canvassed. The Member said:
“… given the serious nature of the matters under investigation, and the potential implications for Mr Podesta, it was not sufficient notice for the [appellant] to refer in broad terms to ‘inappropriate conduct’.”[23]
[22] [2013] NSWWCCPD 69 (Markovski).
[23] Reasons, [209].
The Member concluded:
“I am not satisfied that the [appellant] has discharged its onus of establishing, on the balance of probabilities, that Mr Podesta’s injury was wholly or predominantly caused by reasonable action taken, or proposed to be taken with respect to discipline.”[24]
[24] Reasons, [210].
The Member noted that the appellant did not take any issue with Mr Podesta’s claim to have no incapacity for employment up to May 2021 based on Dr Kaplan’s reports.
The appellant submitted the incapacity had resolved, because in December 2021 Dr Kaplan considered that surveillance material established that Mr Podesta was fit for employment without restriction. Further, the appellant submitted that Mr Podesta’s bank statements indicated that he was moving around a large range of locations at some distance from each other and engaging in a range of activities contrary to his statements to the examining doctors.
The Member resolved the issue of capacity adverse to the appellant as follows:
“I am not persuaded that the video surveillance material is seriously at odds with Mr Podesta’s claims or with him having an adjustment disorder or depressive disorder. The bank records do indicate that he has moved around a fair distance at different times and been to a range of shops and venues. That material has not been put to Dr Kaplan (or any other doctor) and I am not persuaded that it is evidence that he has had capacity for employment during the relevant period. If he has had any (minimal) capacity for suitable employment during that time, there is no evidence on which I could sensibly make a finding as to how much.”[25]
[25] Reasons, [214].
CERTIFICATE OF DETERMINATION
On 23 March 2022, the Commission made the following determination:
“1. The [respondent] sustained psychological injury arising out of or in the course of his employment with the [appellant] (deemed date 5 February 2021).
2. The [respondent’s] injury was not wholly or predominantly caused by reasonable action taken by the [appellant] in respect of discipline.
3. The [respondent] had no capacity for employment from 5 February 2021 and continuing as a result of his injury.
4. The [appellant] to pay the [respondent] weekly compensation as follows:
(a) from 5 February 2021 to 7 May 2021 at the rate of $1,567.50 pursuant to section 36 of the Workers Compensation Act 1987, and
(b) from 8 May 2021 to date and continuing at the rate of $1,320 per week pursuant to section 37 of the Workers Compensation Act 1987,
with credit for any sick leave credits.
5. The [appellant] to pay the [respondent’s] reasonably necessary medical expenses pursuant to section 60 of the Workers Compensation Act 1987.”
GROUNDS OF APPEAL
The appellant raises the following grounds of appeal, asserting the Member:
(a) incorrectly identified and applied the legal principles to be applied to the determination of the issue of reasonableness under s 11A of the 1987 Act (Ground One);
(b) failed to give sufficient reasons for finding that the actions of the appellant at the meeting were not reasonable (Ground Two);
(c) failed to apply the proper legal test to the issue of reasonableness of the conduct of the investigation following the meeting (Ground Three);
(d) failed to give sufficient reasons for finding that the actions of the employer in conducting the investigation were not reasonable (Ground Four);
(e) failed to give sufficient weight to the opinion of Dr Kaplan based on his viewing of the surveillance material (Ground Five);
(f) erred in failing to give sufficient weight to the respondent’s financial records in relation to the issue of work capacity (Ground Six), and
(g) erred in refusing to grant the appellant leave to cross-examine the respondent worker (Ground Seven).
ON THE PAPERS
The appellant submits that it is appropriate for the appeal to be dealt with on the papers. The respondent does not oppose that course but says that he is ready to make oral submissions should they be required.
Section 52(3) of the Personal Injury Commission Act 2020 provides:
“(3) 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 and enabling legislation without holding any conference or formal hearing.”
Procedural Directions PIC2 and WC3 provide that I may be satisfied that the documents and submissions of the parties provide me with sufficient information so that the appeal can be determined on the papers without holding any formal hearing.
In this matter there are comprehensive submissions prepared by counsel for the parties such that I am satisfied that it is appropriate for the matter to proceed to be determined “on the papers” without holding any conference or formal hearing.
THRESHOLD MATTERS
The appellant asserts, and the respondent does not dispute, that the appeal was lodged within the 28-day time limit (s 352(4) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act)). The appellant lodged amended submissions adding a further ground of appeal (Ground Seven) out of time without leave. The respondent has consented to the amendments and lodged submissions dealing with the added ground of appeal. In these circumstances I propose to determine the appeal including Ground Seven.
The appeal meets the monetary threshold stipulated by s 352(3) of the 1998 Act.
INTERLOCUTORY
Section 352(3A) of the 1998 Act provides:
“There is no appeal under this section against an interlocutory decision except with the leave of the Commission. The Commission is not to grant leave unless of the opinion that determining the appeal is necessary or desirable for the proper and effective determination of the dispute.”
Ground Seven of the appeal seeks to agitate the Member’s refusal to grant the appellant leave to cross-examine the respondent. That ground of appeal is interlocutory however on an appeal from a final order, an appellate court can correct any interlocutory order that has been made provided the interlocutory determination affected the final result: Gerlach v Clifton Bricks Pty Limited.[26] Although the Personal Injury Commission is not a Court, I see no reason why the principle would not apply to an exercise of the jurisdiction given by s 352 of the 1998 Act.
[26] [2002] HCA 22; 209 CLR 478 (Gerlach), 483.
NATURE OF THE APPEAL PURSUANT TO SECTION 352(5) OF THE 1998 ACT
The jurisdiction provided in subsection 352(5) of the 1998 Act is:
“An appeal under this section is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of any such error. The appeal is not a review or new hearing.”
In Heggie Sackville AJA said at [71]–[72]:
“… as Roche DP pointed out in Raulston v Toll Pty Ltd [2011] NSWWCCPD 25, at [20], the observations of Allsop J in Branir Pty Ltd v Owston Nominees (No 2) need to be borne in mind, particularly (I would add) where the challenge is to an evaluative judgment such as the reasonableness of actions by an employer with respect to discipline. Allsop J said, in relation to the application of the principle in Warren v Coombes, (at [28]) that:
‘in [the] process of considering the facts for itself and giving weight to the views of, and advantages held by, the trial judge, if a choice arises between conclusions equally open and finely balanced and where there is, or can be, no preponderance of view, the conclusion of error is not necessarily arrived at merely because of a preference of view of the appeal court for some fact or facts contrary to the view reached by the trial judge.’
A fortiori, if a statutory right of appeal requires a demonstration that the decision appealed against was affected by error, the appellate tribunal is not entitled to interfere with the decision on the ground that it thinks that a different outcome is preferable: see Norbis v Norbis [1986] HCA 17; 161 CLR 513, at 518-519, per Mason and Deane JJ.”
The necessity to find error of fact, law or discretion engages the jurisdiction under s 352(5). The jurisdiction is not engaged by a mere preference for another outcome. It is important to bear this in mind in this matter.
DISCUSSION
Ground One: The Member incorrectly identified and applied the legal principles to be applied to the determination of the issue of reasonableness under s 11A of the Workers Compensation Act 1987
Appellant’s submissions
The appellant submits:
“The difficulty with the Member’s findings about the reasonableness of the appellant’s actions in the conduct of the meeting on 17 November 2020 are threefold. First, the legal principles applied by the Member are incorrect. Second, the Member did not make any actual finding that the conduct of the meeting was not reasonable action, instead referring to aspects of the meeting as inappropriate. Third, the Member failed to properly identify the basis for her findings about the appropriateness of the conduct of Mr Edgar at the meeting.”[27]
[27] Appellant’s amended submissions, [22].
The appellant submits that the Member’s inaccurate quotation from the decision of Irwin at [191] of the reasons led to her failing to apply the correct test. The appellant submits the objective of the employer in relation to a disciplinary issue is different from the object of employment.
The note left on Mr Zanetic’s desk and the issues that came to light following the information provided by Mr Gallahar prior to his departure were potentially serious disciplinary matters that potentially involved breaches of the appellant’s policies. These concerns were of a much narrower focus than the object of the employment.
The Member adopted a test based on whether the employer’s actions were appropriate. This was not the correct test of whether the employer’s actions were reasonable when viewed objectively and having regard to the balancing of the rights of the employees with the objectives of the employer.
Mr Edgar’s conclusion that someone in the workshop was responsible for leaving the letter on Mr Zanetic’s desk and the reference to the Claremont Street killings as not “appropriate” failed to identify the evidence on which those findings was based, but “more fundamentally” “did not apply the correct legal test.” (The appellant expands on this submission in its submission in support of Ground Two, see [99] to [101] below).
The same criticism is made of the finding that Mr Edgar’s tone was accusatory:
“Although the Member did not make any specific finding about [Mr] Edgar using an ‘accusatory’ tone, it appears to form part of an (unstated) finding that it was unreasonable for [Mr] Edgar to use such a tone at the meeting. It is certainly one of the factors that the Member appears to have taken into account in making an overall finding that the actions of the appellant, commencing from the meeting on 17 November 2020 were not reasonable.”[28]
[28] Appellant’s amended submissions, [26].
The appellant notes that the Member accepted the evidence of Ms Coleman that Mr Edgar had made a comment to the effect that “if things did not change then [the workshop staff] would be out of work because there would be no workshop”, but submits that the Member did not refer to the evidence of Ms Coleman that “no one’s [sic] employment was threatened”. The appellant submits that the Member does not appear to have given any weight to that evidence.[29]
[29] Appellant’s amended submissions, [27].
The Member did not conduct any proper analysis of the evidence about what Mr Edgar said at the meeting regarding the jobs of employees with reference to the applicable legal principles identified in Irwin. The Member did not engage in any analysis of the evidence having regard to the requirements to apply an objective test to the issues of reasonableness, and balancing the rights of the employees with the objectives of the employer. It is submitted the failure to do so constitutes an error.
The appellant quotes Sinclair to the effect that a course of conduct may still be reasonable action even if particular steps are not, and the requirement is to determine whether the whole process was, notwithstanding the blemishes, “reasonable action”. The appellant submits the Member’s decision in the present matter is affected with the same type of error.
The Member limited her consideration of the reasonableness of the appellant’s actions to specific steps taken by the appellant, contrary to the approach discussed in Sinclair. The Member erred in failing to consider whether the whole of the disciplinary process constituted reasonable action. The appellant submits:
“The failure of the Member to properly identify the relevant legal test and the lack of clarity about the test applied by the Member to the issue constitutes an error of law.”[30]
[30] Appellant’s amended submissions, [31].
Respondent’s submissions
The respondent submits that the employer’s first contention that the Member misapplied the legal principles in reaching her conclusion is incorrect. The Member cited Irwin at [191], Heggie at [19] and Sinclair at [193].
The respondent submits:
“It is clear from [194] that Member Toohey considered the objects of the employer in calling the meeting. She conducted the exercise set out in Irwin which was approved by the Court of Appeal in Commissioner of Police v Minahan [2003] NSWCA 239 at [27] and [42] per Foster J. Member Toohey expressly concluded that it was reasonable for the employer to call the meeting. That conclusion patently demonstrates that the Member had considered the object of the employer in obtaining information concerning the authorship of the letter addressed to Mr [Zanetic]. The employer has failed in this appeal to demonstrate that the Member failed to conduct the balancing exercise mandated by Irwin and by Minahan.”[31]
[31] Respondent’s submissions, [14].
The Member had evidence from Stephen Howarth, a fellow staff member of the worker.
Mr Howarth described Mr Edgar as displaying an extremely agitated and hostile state at the meeting, where his manner was both aggressive and intimidating. Mr Edgar told those assembled that he would sack them if no-one owned up.
The Member did not accept that there was a direct threat of terminating the employment of the workshop staff, but she did accept that Mr Edgar made reference to all staff being out of work if there was no workshop.
Mr Howarth’s evidence corroborated that of the worker to which the Member referred at [38] of the reasons. There was supporting evidence from Mr Colburt and Ms Coleman (evidence tendered by the employer), for the proposition that Mr Edgar’s voice was raised.
The respondent says there was support for the conclusion of the Member at [197] of the reasons that Mr Edgar’s tone was accusatory. Mr Edgar referred to a police investigation of serial killings as a parallel to the investigation which he, Mr Edgar, intended to conduct.
The respondent submits:
“[The Member’s] reasons from [194] to [198] demonstrated that she had considered all of the evidence concerning the conduct of Mr Edgar at the meeting. The Member found:
·that Mr Edgar’s tone was accusatory,
·that he raised his voice,
·that he had referred to the murder investigation clearly as a parallel, and
·that he had made reference to all present being out of work because there would be no workshop.
All of these findings were evidence-based. All of them supported a conclusion which was open to the Member that the employer’s conduct was unreasonable.”[32]
[32] Respondent’s submissions, [17]–[18].
The Member has not based her conclusion on a single blemish. The Member articulated multiple instances of Mr Edgar’s oppressive behaviour at the meeting, behaviour which she found on the evidence established and which she concluded meant that the employer had not established that its actions were reasonable.
The respondent concludes in relation to Ground One:
“It is further to be borne in mind, in light of the employer’s referral to Sinclair, that there are further instances of unreasonable conduct by the employer beyond the meeting of 17 November 2020, all of which Member Toohey found to be causative of the acknowledged psychological injury.”[33]
[33] Respondent’s submissions, [20].
Consideration
The Member incorrectly quoted the passage by Geraghty CCJ in Irwin. The appellant submits that this led her to misdirect herself as to the correct legal principle (test) to be applied when determining whether the appellant’s action was “reasonable action”. The submission is that the Member focused on the “object of the employment” rather than on the balancing of the rights of the employee against the objective of the employer (in holding the investigation and undertaking the disciplinary action).
Although the Member incorrectly recorded the quotation from Irwin, for the reasons that follow I am not persuaded she erred in the application of the correct legal principle.
Apart from Irwin, the Member referred to Sinclair and Heggie.
It is apparent from the passage quoted by the Member from Heggie, which is found at paragraph [59(d)] of the judgment of Sackville AJA, that the Member was cognisant of the binding statements of principle contained in that authority. I reject the submission that the Member did not balance the rights of the worker with the objective of the employer in conducting the investigation.
Furthermore, I am not persuaded that the Member substituted “appropriate” for the test of “reasonable action”.
The Member found that the “action with respect to discipline” extended over the entire process, namely, from the meeting of 17 November 2020 until the interviews in 2021.[34]
[34] Reasons, [190].
The Member relied on multiple factors for her conclusion that the action taken by the appellant failed to achieve a proper balance between the objective of the employer in conducting the investigation and fairness to Mr Podesta.
The Member found support for her conclusion that the appellant’s action was not reasonable in several matters:
(a) The convening of the meeting on 17 November 2020 was reasonable but the manner in which Mr Edgar conducted the meeting not appropriate. The Member found (at [197] of the reasons) that Mr Edgar raised his voice, took the view despite the denial by senior staff, that someone in the team was responsible for the note, adopted an accusatory tone and made reference by way of apparent comparability to an exhaustive police investigation concerning the Claremont serial killings.
(b) Mr Edgar said that if things did not change, the workshop staff would be out of employment. She accepted that this was not made in any sort of threatening or aggressive manner but, nevertheless, the members of the workshop perceived it to be a threat to their employment. Again, she did not regard that as an appropriate comment.[35]
(c) The Member found that there were problems with the workplace “culture” which had been identified over previous months and discussed in the mediation session. However, she found there was no evidence that these concerns had been clearly raised with Mr Podesta and his fellow employees.
(d) The employer did not fully inform Mr Podesta of the subject(s) of the investigation before he was required to attend for the first interview with the external investigator.[36]
(e) The letter of 25 November 2020 advising Mr Podesta and others of the investigation referred to a decision to conduct a workplace investigation into various alleged “inappropriate practices that may constitute breaches of the Council’s code of conduct and policy and procedures” including the recent incident of the threatening letter, but it did not specify what the alleged inappropriate practices were.[37]
(f) The Member accepted Mr Podesta when he said that he was shocked at the first meeting because the investigator focused on issues which he did not expect were to be the subject of the investigation.[38]
(g) The investigator’s enquiries involved serious matters which the Member regarded as potentially criminal. The failure of the employer to identify to Mr Podesta that these were to be the subject of the interview, before the interview took place, was a significant factor in determining the reasonableness of the conduct undertaken by the appellant.
(h) Notwithstanding that the Member found it improbable that Mr Podesta had no idea of what might be discussed at the meeting with the investigator, it was not enough to achieve fairness for the appellant to refer in broad terms to “inappropriate conduct” and to rely upon Mr Podesta’s failure to raise with the appellant what matters other than the anonymous letter were likely to be the subject of the investigation.
(i) Nor was it appropriate for the appellant to say that Mr Podesta was never told that it would only be about the letter.[39]
[35] Reasons, [198].
[36] Reasons, [200]–[201].
[37] Reasons, [202]–[203].
[38] Reasons, [203].
[39] Reasons, [207].
The Member respected the appellant’s objective in calling the meeting and conducting the investigation:
(a) It was reasonable for Mr Edgar to call a meeting of the workers when the anonymous letter was left with the clear intention of intimidating the new manager. She said that was “a serious matter and needed prompt action”.[40]
(b) Mr Edgar consulted with the HR Manager and Mr Colburt showing that “he took the matter seriously and sought advice as to how to proceed”.[41]
(c) She recognised that while there was no clear evidence that the overall investigation was prompted by Mr Gallahar’s allegations, it was likely informed by what Mr Gallahar had alleged about Mr Podesta.[42]
[40] Reasons, [194].
[41] Reasons, [195].
[42] Reasons, [201], [204].
There was evidence to support the Member’s finding with respect to Mr Edgar’s tone at the meeting. She recorded (without apparent disapproval) the evidence of Mr Howarth:[43]
(a) Mr Edgar’s manner was “very aggressive and intimidating” and he was extremely agitated and hostile.
(b) According to Mr Howarth: “Mr Edgar said he believed one of the team members present was responsible for the letter, and that person was a coward and should admit responsibility.”
(c) Although members of the team told Mr Edgar that others also had access to the office, he rejected that, angrily “saying it was definitely a workshop staff member as they were the only ones with a motive.”
[43] Reasons, [51].
Further, the Member’s conclusion is supported by her quote from Mr Edgar’s statement:
“… he outlined at the meeting why it had been called and he expressed his disappointment and upset. He outlined his view that the letter originated from within the workshop. He told the team this behaviour was cowardly and it was best for anyone responsible, or who knew who was responsible, to come forward. He impressed that the matter needed to be investigated because of its seriousness.”[44]
[44] Reasons, [60].
Mr Edgar’s response to three senior members of the workshop denying responsibility for the letter and asserting that nobody from the workshop was responsible for the letter was to direct attention to an extensive investigation into a notorious crime.[45] It is difficult to disagree with the Member’s conclusion that the allusion was inappropriate, but this is not to the point. The Member’s conclusion does not demonstrate error.
[45] See Mr Edgar’s statement, 31 March 2021, Reply to Application to Resolve a Dispute (reply), p 35, [19].
It is not clear from paragraph [25] of the appellant’s submissions what additional analysis the Member was meant to undertake. Mr Edgar’s statements at the meeting were considered by the Member and she had regard to the evidence of others in attendance at the meeting who described his conduct and statements.
In Sinclair the Chief Justice said:
“His Honour’s analysis, as that of the Arbitrator, appears to assume that any specific blemish in the disciplinary process, however material in a causative sense or not, was such as to deprive the whole course of conduct of the characterisation ‘reasonable action with respect to discipline’. In my opinion, a course of conduct may still be ‘reasonable action’, even if particular steps are not. If the ‘whole or predominant cause’ was the entirety of the disciplinary process, as much of the evidence suggested and his Honour appeared to assume, his Honour did not determine whether the whole process was, notwithstanding the blemishes, ‘reasonable action’. For this alternative reason the appeal should be allowed.”[46]
[46] Sinclair, [97].
I accept the respondent’s submission that the Member has not formed her conclusion on the basis of a single blemish.[47] She has articulated multiple instances of Mr Edgar’s oppressive behaviour at the meeting, each of which she has found on the evidence and, in addition, she has found other instances of unreasonable conduct particularly with respect to the failure to provide Mr Podesta with appropriate advance notice of the very serious matters the subject of further investigation.
[47] Respondent’s submissions, [19].
I am not satisfied that incorrectly quoting from the passage in Irwin led the Member to misdirect herself as to the applicable legal principle. Specifically, the Member did not fail to balance the appellant’s objective in conducting the investigation with the requirement that Mr Podesta be treated fairly.
In my view, the Member’s finding that the respondent failed to discharge the onus of establishing on the balance of probabilities that Mr Podesta’s injury was wholly or predominantly caused by reasonable action taken or proposed to be taken with respect to discipline was soundly based. I dismiss Ground One of the appeal.
Ground Two: The Member failed to give sufficient reasons for finding that the actions of the appellant at the meeting were not reasonable
Appellant’s submissions
The appellant describes this ground as an adjunct to Ground One, submitting that the Member failed to give sufficient reasons for finding that the actions of Mr Edgar at the meeting on 17 November 2020 were not appropriate.
The appellant submits the Member did not give any or any sufficient reasons as to why she concluded that to suggest that someone within the workshop team was responsible for leaving the letter or note was not a reasonable action with respect to discipline based on an objective test. The failure to provide proper reasons for that finding constitutes an error.
Likewise, the appellant argues that the Member provided no reasons to support her finding that the reference to the Claremont Street killings was not appropriate. The appellant notes that at paragraph [63] of the reasons, the Member referred to the evidence of Mr Edgar acknowledging the reason and intention of Mr Edgar in raising the issue at the meeting. However, the Member did not give any reasons why she considered that raising the issue in the meeting was not appropriate. The appellant submits that the Member did not provide any or any sufficient reasons why those matters justified a finding that the actions of Mr Edgar on behalf of the appellant at the meeting were not reasonable having regard to the applicable principles. It is submitted that constitutes an error of law.
Respondent’s submissions
The respondent submits that paragraphs [196], [197] and [198] of the reasons provide the reasons for the finding that the conduct of the employer at the meeting of 27 (sic, 17) November 2020 was not reasonable.
The Member found that the general manager rejected an assurance by senior workshop staff members that no person from the workshop team was responsible for the letter. The general manager’s response to that assurance was to inform them that the Claremont murderer had been identified 20 years after his crime.
The respondent submits:
“It was clearly open to Member Toohey to conclude that this behaviour by Mr Edgar was unreasonable, particularly in the light of Mr Edgar’s acknowledgement that senior members had expressed dismay at the continued accusation by [Mr] Edgar after the assurance by those officers that no one present was responsible.”[48]
[48] Respondent’s submissions, [24].
The Member accepted that Mr Edgar’s conduct had had the effect of causing the worker to become upset and distressed and was a part of the cause of his psychological injury.
Consideration
The appellant complains that the Member failed to give sufficient reasons for her findings that:
(a) the actions of Mr Edgar at the meeting on 17 November 2020 were not appropriate;
(b) to suggest that someone in the workshop was responsible for leaving the letter or note was not reasonable, and
(c) to draw an analogy with the Claremont Street killings was not appropriate.
I have addressed the substance of these issues above. At this point I deal with the “reasons” ground.
Rule 78 of the Personal Injury Commission Rules 2021 (the 2021 Rules) relevantly provides:
“(2) A determination of the appropriate decision-maker in applicable proceedings to which this rule applies is to be accompanied by a brief statement of the appropriate decision-maker’s reasons for the determination that includes the following:
(a)the appropriate decision-maker’s findings on material questions of fact, referring to the evidence or other material on which those findings were based,
(b)the appropriate decision-maker’s understanding of the applicable law,
(c)the reasoning process that led the appropriate decision-maker to the conclusions made.
(3) Without limiting subrule (2), the reasons are to be stated sufficiently, in the opinion of the appropriate decision-maker, to make the parties to the proceedings aware of the appropriate decision-maker’s view of the case made by each party.”
The requirement to provide reasons is an obligation with respect to the reasons for the determination.[49] It is not an obligation to provide extensive reasons for each subordinate finding leading to the ultimate conclusion.
[49] Section 294(2) of the 1998 Act.
The finding by the Member that the actions of Mr Edgar at the meeting were not appropriate is an evaluative finding by the Member. The inference Mr Edgar drew that workshop staff were responsible for the note left on Mr Zanetic’s desk was doubtless available. But Mr Edgar was told by senior members of the workshop staff that they did not believe they or others in the workshop had left the note. Furthermore, access to the workshop was not limited to workshop staff. I accept the respondent’s submission that:
“The Member has clearly found that the employer’s general manager assembled staff members together and that he rejected an assurance by senior staff members that no person from that workshop team was responsible for the letter. See Mr Edgar’s statement [18], Reply 35. The general manager’s response to that assurance was to inform them that a murderer had been identified, twenty years after his crime. See again Mr Edgar’s statement at [19].”[50]
[50] Respondent’s submissions, [23].
In my view, the Member satisfied the requirements of r 78 of the 2021 Rules. Her conclusion with respect to Mr Edgar’s response to the denial by the workshop staff that they had placed the letter on the desk and Mr Edgar’s referral to the Claremont Street killing were evaluative conclusions open to the Member on the evidence.
The requirement of r 78 is that the reasons for the ultimate determination need to be briefly stated. It is not a rule that requires the tribunal to give detailed reasons for intermediate findings. Furthermore, the Member’s conclusion as to what was appropriate conduct at the meeting by Mr Edgar seems to me to be an evaluation available on the basis of the evidence. I dismiss Ground Two of the appeal.
Ground Three: The Member failed to apply the proper legal test to the issue of reasonableness of the conduct of the investigation following the meeting
Appellant’s submissions
The Member noted that Mr Podesta’s evidence was that he was shocked and unprepared when the investigator raised workplace issues other than the note that was left on Mr Zanetic’s desk. The appellant submits that the Member did not accept that evidence. The Member noted in her analysis of the evidence that Mr Colburt had spoken to the workshop team on 23 September 2020 when he told them that a number of issues about workshop practices had been raised by Mr Gallahar before his departure and that the appellant intended to investigate those matters.
The appellant submits that the Member stated at paragraph [209] of the reasons that the respondent had been given advance notice of the interview and of his entitlement to bring a support person. The Member stated that “given the serious nature of the matters under investigation, and the potential implications for Mr Podesta, it was not sufficient notice for the [appellant] to refer in broad terms to ‘inappropriate conduct’.” In making that finding the Member did not refer to the legal principles discussed in Irwin, including the requirement to view the question objectively, balancing the rights of the employees with the objectives of the employer.
The appellant submits that the reference to Markovski was not apt as the case was factually distinguishable from the present one because in Markovski, Mr Markovski was not given any notice of the meeting at which he was told of the transfer or of the way in which the meeting was to be conducted, which included the failure to give Mr Markovski the opportunity to have a support person. Those matters are not relevant to the present case. The Member’s reliance on the decision in Markovski did not support the finding that the failure of the appellant in the present case to give advance notice of all the issues to be investigated was not reasonable action.
The appellant submits:
“In the present case the objectives of the employer were the investigation of possible breaches of policy and procedure in the workshop involving workshop practices … The question is whether the actions of the employer are reasonable when viewed objectively at the time they were undertaken, not whether, with the benefit of hindsight the employer might have taken a different action.
Having found as fact that the appellant gave the respondent advance notice of the interview with the investigator, that the notice included information that the subject of the meeting would extend beyond the note left of [Mr Zanetic’s] desk and that he was entitled to bring a support person, it was incumbent on the Member to identify by reference to the applicable legal principles, the basis on which she then found that the actions of the employer in the conduct of the investigation were not reasonable. The failure of the Member to do so constituted an error of law.”[51] (emphasis in original)
[51] Appellant’s amended submissions, [41]–[42].
Respondent’s submissions
The letter to which the Member referred at [200] of the reasons appears in the documents at page 47 of the Application to Resolve a Dispute (ARD), and was prepared 8 days after the meeting of 17 November 2020, and made specific reference to the note which Mr Edgar was convinced had been written by a member of the workshop staff:
“… Mr Podesta had assured Mr Edgar that that was not the case but that assurance was rejected, as noted above.
The conclusion of the Member was that in those circumstances, or indeed in any circumstances, … it was not reasonable for the notice to do no more than refer to various alleged inappropriate practices.”[52] (emphasis in original)
[52] Respondent’s submissions, [29]–[30].
Contrary to the assertion that the Member omitted to do so, Member Toohey has provided a clear statement of the reasons for her conclusion. At [201] of the reasons the Member observed correctly that there was no evidence in Mr Colburt’s statement or elsewhere that the allegations said to constitute inappropriate behaviour were ever put to the team or to the worker.
The respondent submits that the worker discovered only at the time of the interview that the employer’s assertions against him included:
(a) buying parts for his own car;
(b) inappropriate conduct towards a female employee;
(c) methods of raising work purchase orders, and
(d) the legal side of local government procurement.[53]
[53] Reasons, [203].
And at [34] of the respondent’s submissions:
“Critically, and clearly displaying her reasons, the Member made the accurate observation at [206]:
‘The allegations and concerns involved serious matters, some potentially criminal. Neither Mr Colburt nor Mr Edgar says they were put directly to Mr Podesta prior to the first interview.’”
The respondent submits that the failure of the employer to directly put to Mr Podesta the allegations offends the dictum of Deputy President Roche in Markovski. The appellant emphasises the word “any” in citing paragraph [95] of Markovski asserting that that is a differentiation from the present matter. The respondent submits that it does no such thing and that in the succeeding paragraph, Deputy President Roche made the understandable observation that basic fairness requires advance notice of the agenda. Markovski is in point and supports the conclusion reached by Member Toohey.
The respondent submits that the reference by the employer to Irwin again carries the inference that the employer is contending that the Member failed to weigh the rights of the worker against its objectives. The contention overlooks the fact that it was for the employer to bring the evidence to demonstrate that it was appropriate for the worker’s right to receive advance notice of the meeting’s agenda to be suppressed in order to protect the objectives of the employer. No such evidence was brought.
Consideration
The letter of 25 November 2020 advised Mr Podesta and others that the investigation was “into various alleged inappropriate practices that may constitute breaches of Council’s Code of Conduct and policies and procedures” including the recent incident of the threatening letter.[54]
[54] Reasons, [202].
The external investigation was carried out by J & S Commercial Investigations. The report says that the investigation included investigation into the authorship of the letter but also:
“… allegations were presented, [in] relation to the misappropriation of council property, such as tyres and equipment, inappropriate extending of regular morning tea and lunch breaks, inappropriate behaviour towards female staff members, the existence of pornography in the workplace, the presumed theft of 4 jerry cans and overt and belligerent resistance to any form of workplace change.
It was also alleged that staff at the workshop were order[ing] or bill splitting in direct contravention of Council’s Purchasing Guidelines and Code of Conduct. There was also an allegation of a set of brake pads being wrongfully ordered and then stolen from the workshop on and after the 11 June 2020.”[55]
[55] Application to Admit Late Documents (AALD), 8 December 2021, p 55.
The Member said that the allegations and concerns involved serious matters, some potentially criminal.[56] Mr Podesta was not given any notice of the intention to investigate those matters prior to the first interview. That factual finding is not challenged.
[56] Reasons, [206].
The Member said that she found it “improbable” that the additional matters raised at the interview had never been discussed with Mr Podesta as he claimed. However, the onus was on the appellant to establish the reasonableness of its action including “fairness” to the worker.
The notice the appellant expressly provided to Mr Podesta was in the letter dated 25November 2020. That advised of an intention to conduct an investigation into inappropriate practices that may constitute breaches of the Council’s Code of Conduct, policies and procedures. No detail of what was to be investigated by the external investigator was provided. The Member did not regard the evidence of Mr Colburt as to what he discussed with the workshop team on 23 September 2020 as providing Mr Podesta with adequate notice of the serious nature of the matters the subject of the investigation.
The reference by the appellant with respect to Irwin[57] fails to pay due attention to the final sentence of the passage from Irwin: “whether an action is reasonable should be attended, in all circumstances, by questions of fairness.” (emphasis added)
[57] Appellant’s amended submissions, [38].
The Member concluded that Mr Podesta was not given sufficient notice of the range of topics to be the subject of the investigation. She came to that conclusion because of “the serious nature of the matters under investigation, and the potential implications for Mr Podesta”.[58] In the circumstance, in effect the Member concluded that Irwin required that Mr Podesta be treated fairly and the appellant failed to do so.
[58] Reasons, [209].
The Member’s reference to Markovski at [196] was apt. Roche DP said that what had occurred in that case offended “basic fairness”. The passage quoted by the Member was that basic fairness required “advance notice of the meeting, the agenda, and the opportunity to bring a support person” (emphasis added).[59] Mr Podesta was not given the agenda of the interview though he was given advance notice of the meeting and an opportunity to bring a support person.
[59] Reasons, [208].
I accept the respondent’s submission that “it was for the employer to bring evidence to demonstrate that it was appropriate that the rights of the worker to advance notice of the meeting’s agenda should be suppressed in order to protect the objectives of the employer. No such evidence was brought.”[60]
[60] Respondent’s submissions, [38].
The appellant has failed to demonstrate error on the part of the Member.
Ground Three of the appeal is dismissed.
Ground Four: The Member failed to give sufficient reasons for finding that the actions of the employer in conducting the investigation were not reasonable
Appellant’s submissions
The appellant submits that for the reasons identified in the preceding ground (i.e. Ground Three) the Member failed to give proper and sufficient reasons for finding that the actions of the appellant in conducting the investigation into the conduct and practices of the workshop staff including the respondent were not reasonable. The failure of the Member to give proper or sufficient reasons constitutes an error of law.
Respondent’s submissions
The respondent directs attention to Soulemezis v Dudley (Holdings) Pty Limited[61] and says that the only question is whether the Member has given proper or sufficient reasons consistent with Soulemezis for her conclusion that the employer had not demonstrated that its relevant actions were reasonable. The relevant actions are limited to those actions of the employer that had the effect of causing the worker’s injury.[62] The Member accepted that the worker was shocked and upset by being obliged to meet allegations for which he had no advance notice. The raising of serious allegations at a formal meeting without notice was, the Member found, unreasonable. Her reasoning processes are disclosed from [201] to [209]. The respondent submits the reasons are both proper and sufficient to support the finding that the employer had not discharged its onus.
[61] (1987) 10 NSWLR 247 (Soulemezis), [281] per McHugh J.
[62] See Heggie, [185]–[186].
Consideration
The obligation to give reasons in the Personal Injury Commission is controlled by s 294 of the 1998 Act and r 78 of the 2021 Rules. In my view, the Member’s Statement of Reasons sets out the material facts as found by her.[63] The Member furthermore identified the applicable law,[64] whilst the reasons at [191] to [210] demonstrate the reasoning process that led the Member to the conclusions she reached.
[63] See reasons, [194], [195], [197], [198], [201], [203], [206], [207].
[64] Reasons, [191]–[193].
In my view, the reasons prepared by the Member comply with s 294 of the 1998 Act and r 78 of the 2021 Rules.
Furthermore, to the extent that Soulemezis imposes an obligation additional to that provided for in the Act and the Rules, the appellant does not identify which aspects of the investigation into the conduct and practices of the workshop staff that the Member found not to be reasonable required additional reasons to those presently provided for in the Statement of Reasons. Ground Four is dismissed.
Ground Five: The Member failed to give sufficient weight to the opinion of Dr Kaplan based on his viewing of the surveillance material
Appellant’s submissions
The appellant relied on a series of reports from Dr Kaplan which culminated in a revised opinion. The first opinion,[65] based on the history provided to him by the respondent, was that the doctor considered the respondent had no capacity for work.
[65] Reply, pp 186–193.
The second opinion appeared in his report of 1 December 2021,[66] after Dr Kaplan had reviewed the reports of Procare Investigations dated 18 November 2021 and 26 November 2021, together with the surveillance footage of the respondent taken by the investigator.[67] The material showed that the respondent visited auto repair shops during that period, contrary to the history he had previously given to Dr Kaplan that he no longer carried out work on his car because of his psychological condition. On the basis of the further information, Dr Kaplan formed the opinion that the respondent was able to work without restrictions.
[66] AALD 8 December 2021, pp 12–13.
[67] AALD 8 December 2021, pp 20–54.
The appellant submits that the evidence of Dr Kaplan in his final report “was critically important to the issue of the respondent’s work capacity”. This was because Dr Kaplan was the only medical practitioner to provide an opinion about the respondent’s work capacity in the proceedings based on consideration of the investigation reports and the surveillance material.
The Member’s reliance on the GP, Dr Singh, as being in a particularly strong position to assess the respondent’s capacity for employment is criticised because “the respondent would have been in a position to give a history to Dr Singh that was more favourable to his case as he had to Dr Kaplan at his earlier assessments of the respondent. The ‘advantage’ that it was said Dr Singh enjoyed is not at all clear.”[68]
[68] Appellant’s amended submissions, [47].
The comment by the Member that the material was not “seriously at odds with Mr Podesta’s claims” was, so the appellant submits, quite unclear.
“If the Member had intended to find that notwithstanding the evidence of the investigation reports and the surveillance material the respondent remained incapacitated for work then it was incumbent on the member to set out the basis of those findings. The failure of the member to do so amounted to an error of law.
Equally, the Member’s finding that the surveillance material was not ‘seriously at odds’ with the respondent having an adjustment disorder does not properly address the issue of capacity. The Member did not devote any further comment or provide any reason for that finding. The failure to do so also amounted to an error of law.”[69]
[69] Appellant’s amended submissions, [48]–[49].
The appellant then goes on to give examples of the inconsistencies in the history given by the respondent worker to Dr Kaplan and other medical practitioners. Dr Chow recorded that the worker told him that he was no longer engaged in any hobbies and that his level of exercise activity was “trying to go for a walk”.[70] Dr Chow relied on that history in forming his opinion that the respondent was totally unfit for work.
[70] Report dated 12 May 2021, ARD, pp 74–79.
Similarly, the treating doctor, Dr Singh, in a report dated 1 July 2021,[71] recorded the history that the respondent worker was depressed most days, had stopped playing music and pursuing other hobbies. Dr Singh also expressed the opinion the respondent was unfit for any form of employment.
[71] ARD, pp 80–81.
The appellant notes the contrast between the histories given to Dr Kaplan in April 2021 and September 2021 with the material shown and reported on by Dr Kaplan on 1December 2021. The appellant submits:
“However, having had the opportunity to view and consider the surveillance material Dr Kaplan noted that in contrast to that history, the it [sic] showed that the respondent worker left home regularly went to shopping centre supermarkets and auto spares shops in addition to going out for coffee and meals. He was also observed to chop wood and talk to a neighbour. On the basis of that additional evidence Dr Kaplan considered there was no restrictions on the respondent worker’s capacity to work.”[72]
[72] Appellant’s amended submissions, [54].
The appellant’s ultimate point is:
“Those examples demonstrate that the Member failed to give proper consideration to the surveillance material and to the opinion of Dr Kaplan, expressed in his report dated 1 December 2021. The Member’s failure to do so constituted an error.”[73]
[73] Appellant’s amended submissions, [55].
Respondent’s submissions
The appellant submits that the Member reached two conclusions with regard to the video surveillance, one that it was not inconsistent with the account the worker had given of himself both in his statement and in his presentation to medical practitioners that the effect of the illness is such as to prevent him from performing any work. The second conclusion reached by the Member at [214] is that the surveillance material is not inconsistent with the psychological injury with which he had been diagnosed by every medical practitioner who examined him.
The respondent submits:
“It is clear that the Member accepted a submission made by the worker’s counsel that, as the worker’s general practitioner, Dr Singh was in a particularly strong position to assess (the worker’s) capacity for employment. The Member then has provided her reasoning process for concluding that the worker has at all times to the date of the award had no capacity for work.”[74]
Ground Six: The Member erred in failing to give sufficient weight to the respondent’s financial records in relation to the issue of work capacity
[74] Respondent’s submissions, [47].
Appellant’s submissions
The appellant relied on a detailed analysis of the respondent’s financial records to support its submission that those records showed a type and level of activity that was inconsistent with the respondent’s claimed incapacity for work. The Member accepted that those records indicated that the respondent had moved around a fair distance at different times and had been to a range of shops and venues.
The appellant submits:
“the Member disregarded those records, apparently on the basis that she found they did not carry any weight, or significant weight in the issue of the respondent’s capacity for work.”[75]
[75] Appellant’s amended submissions, [56].
The only reason given for disregarding the evidence of the respondent’s level of activity as disclosed by his financial records was that the records had not been provided to Dr Kaplan or any other doctor. The appellant submits that evidence which supports a finding that the level of activity of a worker is greater than the history that he or she has given to the doctor will potentially affect the evidentiary weight to be given to the medical opinion.[76]
[76] Citing Hancock v East Coast Timber Products Pty Limited [2011] NSWCA 11, [82].
The appellant submits that disregarding the evidence of financial records showing the respondent engaging in a level of activity that was inconsistent with his claimed level of work capacity required the Member to provide proper and sufficient reasons for doing so. The Member’s comment that the material had not been considered by the doctors was not a proper basis upon which to do so and was a failure to give proper consideration and weight to the evidence of the respondent’s level of activity as disclosed by the financial records.
The appellant relies upon the reasons set out in support of Ground Five of the appeal regarding the surveillance material.
The appellant submits that in contrast to the history conveyed by the worker to the doctors, “his financial records clearly demonstrated that he was able to and did get out and engage in usual social activities, including driving, attending shops and restaurants and frequent travel to various parts of the state to name but some of those activities. The records also highlighted that the respondent worker had not been honest in his account to doctors saying that he no longer engaged in his pre-injury activities, such as working on motor vehicles. The records disclosed numerous purchases made by the respondent worker from motor vehicle accessories and spare-parts outlets, including American Auto Parts and Supercheap Auto during the same period that he had told doctors that he was no longer able to do so or did not do so, purportedly because of his psychological condition.”[77]
[77] Appellant’s amended submissions, [60].
The appellant submits that the Member failed to give the material proper consideration on the issues of credibility of the respondent worker given the inconsistencies between the history he provided and the level of activity disclosed by the records nor the effect of those records on the issue of his work capacity.
Respondent’s submissions
The respondent submits that the Member correctly noted at [133] of the reasons that Dr Kaplan had reported that the worker had no signs of exaggeration and malingering, inconsistency or [un]reliability. It is submitted that the report of Dr Kaplan of 20 September 2021 contained a typographical error and was intended to be “unreliability”.
The respondent submits:
“… the Member made a determination with regard to the investigation reports to the effect that they did not conflict with the worker’s presentation to medical practitioners. As to this, see the submissions in respect of Ground 5 above. Member Toohey also noted at [171] that the surveillance material did not cause Dr Kaplan to revise his original diagnosis. The contention of the employer under Ground 6 is not to do with the investigation reports, but is rather that there has been an error by the Member in failing to give sufficient weight to financial records.
The employer’s suggestion that the Member so failed does not gain support from a reading of her reasons. She was not persuaded that the financial records supported a finding that the worker had any capacity for employment. That he had no such capacity was from all medical practitioners other than Dr Kaplan.”[78]
[78] Respondent’s submissions, [49]–[50], citing reasons, [214].
The respondent submits that the Member’s reasoning was not limited to the fact that the bank records had not been put to Dr Kaplan or to any other medical practitioner. The Member accepted that the records demonstrated that at times the worker travelled a fair distance and that he had been to a range of shops and venues. The latter was consistent with the worker’s own evidence concerning the video surveillance. The Member found and was entitled to find that these facts were not inconsistent with an absence of capacity for employment.
The respondent submits that it was also of significance that there was, as the Member correctly observed also at [214] of the reasons, no evidence as to what earnings the worker might have achieved in suitable employment. It is clear from the last two sentences of paragraph [214] of the reasons that the Member was satisfied that the worker had no capacity for employment during the relevant period. The final sentence contains an acknowledgment that there might be room for a view clearly not shared by Member Toohey, that there was some capacity, although that acknowledgment did not extend to that capacity being more than minimal. The employer, it is said, has not demonstrated error.
Consideration (Grounds Five and Six)
It is convenient to resolve Grounds Five and Six together.
The appellant’s submissions in relation to Grounds Five and Six are really a restatement of the submission made to the Member that the material should have caused the Member to conclude that Mr Podesta had recovered his capacity for employment by 1 December 2021. However in my view the appellant has not established error.
The complaints made by the appellant are in two categories:
(a) the claimed failures to provide proper and sufficient reasons for discounting the evidence of Dr Kaplan in his report of 1 December 2021 and the surveillance material, and
(b) the failure to attach sufficient weight to the activity demonstrated by the financial records.
The Member said:
“I am not persuaded that the video surveillance material is seriously at odds with Mr Podesta’s claims or with him having an adjustment disorder or depressive disorder. The bank records do indicate that he has moved around a fair distance at different times and been to a range of shops and venues. That material has not been put to Dr Kaplan (or any other doctor) and I am not persuaded that it is evidence that he has had capacity for employment during the relevant period. If he has had any (minimal) capacity for suitable employment during that time, there is no evidence on which I could sensibly make a finding as to how much.”[79]
[79] Reasons, [214].
The Member set out at length the medical evidence from [103] to [135] of the reasons. She set out the appellant’s submissions on capacity at [154] to [156] and [162].
The Member evaluated the evidence and was cognisant of the appellant’s submissions with respect to the evidence. She repeated the substance of what was advanced by the appellant at [211] of the reasons.
The appellant submits that the findings made by the Member are unclear with respect to “the surveillance material”,[80] to which it says the Member failed to give proper weight.[81] In relation to the financial records, it submits the Member failed to recognise that “the existence of evidence that supports a finding that the level of activity of a worker is greater than the history that he or she has given to doctors about his or her level of activity will potentially affect the evidentiary weight to be given to the medical opinion”.[82] Further, the Member misunderstood the import of the financial records. The appellant submitted[83] the records showed the respondent to be engaging in a level of activity that was inconsistent with his claimed level of work capacity. The Member did not address the effect of the financial records on the issue of his work capacity.
[80] Appellant’s amended submissions, [48].
[81] Appellant’s amended submissions, [50].
[82] Appellant’s amended submissions, [57].
[83] Appellant’s amended submissions, [61].
When the Statement of Reasons is considered in its entirety, the Member had regard to all of the evidence bearing upon Mr Podesta’s capacity, including the surveillance evidence and the material from the financial records. The weight she gave to the material may not have been the same as the weight another Member might have given to the material, but that does not show error.
Furthermore, the reasons provided in the conclusory paragraph have to be considered in the context of the overall comprehensive consideration of the evidence. The final conclusory paragraph extracted above was not the entirety of the Member’s consideration of the issues of capacity and credibility.
I dismiss Grounds Five and Six of the appeal.
Ground Seven: The Member erred in refusing to grant the appellant leave to cross-examine the respondent worker
Appellant’s submissions
The appellant submits:
“… the issues in dispute included not only the factual events in the workplace prior to the respondent worker ceasing work in February 2021 as the Member stated. They also included the weight to be given to the respondent worker’s statement evidence as well as the history recorded in medical reports and other documents about his reaction to certain events between 17 November 2020 and February 2021. Those matters were relevant to the issue of the reasonableness of the appellant’s actions with respect to discipline. In refusing to permit cross-examination on the issue of credit because the relevant material the subject of the proposed cross-examination post-dated the respondent worker’s employment with the appellant the Member misconceived the relevance of the proposed cross-examination of the respondent worker on issues of credit based on the surveillance footage and the financial records. In refusing to permit cross-examination on that basis, the Member’s discretion miscarried.”[84]
[84] Appellant’s amended submissions, [66].
The appellant makes a similar submission with respect to the refusal to allow the appellant to cross-examine on the respondent worker’s material going to the issue of work capacity. The appellant submits:
“The level and nature of activity disclosed in the surveillance footage and the financial records was potentially highly relevant to that issue. However, the Member did not address the issue in her very brief reasons for refusing leave despite having earlier acknowledged that one of the bases on which the appellant sought leave to cross-examine was the issue of work capacity. The failure of the Member to address that issue in her reasons for refusing leave to cross-examine constitutes an error in the exercise of the Member’s discretion.”[85]
[85] Appellant’s amended submissions, [67].
Further, the appellant argues the Member took into account an irrelevant consideration when she stated as a reason for her refusing leave that the respondent worker’s credibility had already been put in dispute by the appellant’s witnesses. The Member did not identify any basis on which she reached that conclusion. The appellant says “presumably” the Member intended to say that there was a dispute in the statement evidence. If that is so, that is a different issue to the question of credibility of the respondent worker as a witness and its effect on the issue of reasonableness of the appellant’s actions with respect to discipline and to the issue of the respondent’s work capacity.
The appellant says:
“The Member also stated as a reason for refusing the appellant’s application for leave to cross-examine the respondent worker that the appellant could make submissions as to what we should make of this evidence. The appellant made detailed submissions at the hearing addressing the effect of the surveillance footage and reports and the financial records. However, as has already been submitted in support of grounds 5 and 6 of this appeal, the Member failed to give proper consideration to and reasons for rejecting the evidence. In the absence of the provision of such reasons, the prejudice to the appellant in the refusal of the Member to grant leave to the appellant to cross-examine the worker is significantly greater and leads inevitably to a finding of error.”[86]
[86] Appellant’s amended submissions, [69].
Respondent’s submissions
The respondent submits that the appellant was able to adduce into evidence all of the material the employer sought to tender. This included the surveillance material and the financial records.
The respondent submits:
“In its submissions under Ground 6 at [60] the employer contended that the financial records clearly demonstrated that the [worker] was able to get out and engage in usual social activities … (and) highlighted that the worker had not been honest in his account to doctors in saying that he no longer engaged in his pre-injury activities, such as working on motor vehicles. There is no basis for these assertions, which were made to the Member and rejected, as is evident from the Member’s observations at [214]. Given the lack of any inhibition on the employer’s entitlement to make whatever submissions it wished on the basis of the evidence that it had introduced, and given further that no reliance was placed on authorities such as Browne v Dunn, there is no basis for the Commission, on appeal, to grant leave, required under s 352(3A), to raise an issue concerning the Member’s interlocutory decision to deny the employer’s application for cross-examination. See Cooper v Family and Community Services [2014] NSWWCCPD 8 at [25] per [Deputy President] Roche.”[87] (emphasis in original)
[87] Respondent’s submissions, [55].
Consideration
The Member declined to give leave to cross-examine Mr Podesta because she said the events proposed to be cross-examined upon post-dated the respondent’s employment with the appellant and Mr Podesta’s credibility was already in dispute.
The parties’ dispute involves s 11A “reasonable disciplinary action” and the appellant’s capacity for employment.
The principle is that an interlocutory determination can be challenged on an appeal from the final determination provided the interlocutory determination can be said to affect the final result.[88] For the reasons that follow, in my view, the Member’s refusal to grant leave to cross-examine did not affect the final result.
[88] Gerlach, [6] and [49].
The proposed cross-examination on the surveillance and financial records went to the respondent’s credibility and capacity. Credibility is relevant on each issue. However, the respondent is correct that there was no impediment on the appellant in making submissions to the Member on Mr Podesta’s credibility or his capacity for work.
Absent cross-examination, the appellant was free to put its case at its highest and to assert Mr Podesta was an unreliable witness whose evidence could not be accepted, and furthermore, that he had fully recovered his capacity for work.
I dismiss Ground Seven of the appeal.
CONCLUSION
All of the grounds of appeal have been dismissed. The appeal fails.
DECISION
The Certificate of Determination dated 23 March 2022 is confirmed.
Geoffrey Parker SC
Acting Deputy President
9 March 2023
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