Westpac Banking Corporation v Mani - [2019] NSWWCCPD 41

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Westpac Banking Corporation v Mani [2019] NSWWCCPD 41
APPELLANT:	Westpac Banking Corporation
RESPONDENT:	Shailendra Mani
INSURER:	Self-insured
FILE NUMBER:	A1-6136/18
ARBITRATOR:	Mr P Sweeney
DATE OF ARBITRATOR’S DECISION:	22 February 2019
DATE OF APPEAL DECISION:	9 August 2019
SUBJECT MATTER OF DECISION:	Section 11A(1) of the Workers Compensation Act 1987 (the 1987 Act) – factors to be considered in an assessment of whether action with respect to discipline was reasonable; Northern NSW Local Health Network v Heggie [2013] NSWCA 255; 12 DDCR 95, Irwin v Director General of School Education (Compensation Court of NSW, Geraghty CCJ, 18 June 1998, no 14068 of 1997, unreported), Melder v Ausbowl Pty Ltd (1997) 15 NSWCCR 454, Jeffery v Lintipal Pty Ltd [2008] NSWCA 138 considered and applied; s 32A of the 1987 Act – “suitable employment” – Cronje v Leighton Contractors Pty Ltd [2015] NSWWCCPD 16 discussed, Wollongong Nursing Home Pty Ltd v Dewar [2014] NSWWCCPD 55 applied; s 37 of the 1987 Act – calculation of the ability to earn
PRESIDENTIAL MEMBER:	Deputy President Elizabeth Wood
HEARING:	On the papers
REPRESENTATION:	Appellant:	HWL Ebsworth Lawyers
Respondent:	Turner Freeman Lawyers
ORDERS MADE ON APPEAL:	1. The Certificate of Determination dated 22 February 2019 is confirmed.

INTRODUCTION

Shailendra Mani (the respondent) brought proceedings in the Commission alleging that he suffered psychological injury as a result of “bullying, harassment, mistreatment, misleading, disingenuous, and capricious conduct”[1] by his managers, culminating in psychological injury on or about 8 February 2018.
[1] Application to Resolve a Dispute (ARD), Part 4 – Injury Details.
The Westpac Banking Corporation (the appellant) accepted that the respondent suffered a psychological injury, but declined liability on the basis that the injury was wholly or predominantly caused by reasonable action taken by or on behalf of the appellant in respect of performance appraisal, discipline, or the termination of the respondent’s employment, in accordance with s 11A of the Workers Compensation Act 1987 (the 1987 Act).[2] The appellant also disputed the claim made by the respondent that he had no capacity for work.
[2] Review Decision and Notice of Dispute issued pursuant to ss 74 and 287A of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act).
The matter proceeded to arbitration. The Arbitrator determined that the respondent suffered psychological injury on 7 February 2018 and that the appellant had failed to prove that its actions were reasonable, as required by s11A of the 1987 Act. He entered an award in favour of the respondent in respect of weekly payments of compensation pursuant to ss 36 and 37 of the 1987 Act, and treatment expenses pursuant to s 60 of the 1987 Act.
The appellant appeals that decision.

BACKGROUND

The respondent was born in Fiji and was employed by the appellant in Fiji, before moving to Australia in 1993. The respondent was again employed by the appellant from 1999, ultimately working in the role of a Customer Experience Manager from about 2006. The position involved investigating customer complaints, liaising with the complainants and resolving the issues.
On 25 November 2016, the respondent underwent heart surgery and was absent from work until February 2017, when he commenced a graduated return to work.
The respondent attended a number of weekly meetings with his team leader, Ms Simone Kennedy and subsequently Mr Nathan Kent. From 29 September 2017, the respondent was also required to meet with Ms Aimee Bray, Mr Kent’s manager. How those meetings were characterised was a matter of some contention between the parties in the proceedings.
In particular, the respondent complained about meetings with Ms Bray on 22 January 2018 and with Ms Bray and Mr Kent on 7 February 2018.
At the meeting on 7 February 2018, the respondent was handed a formal performance warning letter. The respondent left work and consulted his family doctor, and thereafter made the claim for compensation which is the subject of these proceedings.

ON THE PAPERS

Section 354(6) of the 1998 Act provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Both parties are of the view that it is appropriate to determine the appeal on the papers that are before me.
I have had regard to Practice Directions Nos 1 and 6; the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents. I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.

THRESHOLD MATTERS

There is no dispute between the parties that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the 1998 Act have been met.

THE EVIDENCE

The appellant’s lay evidence

Ms Bray provided a statement dated 29 March 2018.[3]
[3] Reply to Application to Resolve a Dispute (Reply), pp 68–79.
Ms Bray said that in late 2016 or early 2017, she became aware that the respondent had issues with his performance. She said he was one of several members of the team who would benefit from coaching and skill improvement. Ms Bray implemented higher focused coaching in the form of “queue reviews” or one on one monthly meetings to address the respondent’s shortcomings.
Ms Bray reported that this seemed to go well for the respondent, until more frequent complaints about the respondent began to be made. Ms Bray indicated that in around September 2017, she took a higher interest in the respondent, noting that his quality and compliance scores were above the threshold, but did not reflect the feedback the appellant was receiving from the customers.
Ms Bray advised that this led to the respondent being given informal performance counselling, which began from 29 September 2017. According to Ms Bray, the respondent was advised at the meeting on 29 September 2017 that this performance improvement program was being put in place for three to four weeks. Ms Simone Kennedy, team leader, was present in that meeting. Ms Bray stated that the respondent’s queue reviews were increased from monthly to either weekly or fortnightly. She engaged Ms Dot Cowie, another customer manager, to work with the respondent as peer support. The respondent’s queue of complaints was reduced from 38–40 (which was not manageable) to 20.
Ms Bray asserted that the improvement program was not succeeding, and the respondent was not acting on the coaching and guidance, and his performance continued to fall below expectations. As a consequence, on 31 October 2017, the appellant reduced the respondent’s case load to zero. Ms Bray said that the performance improvement program moved into stage two, and the appellant increased the frequency of the queue reviews. Ms Bray advised that Ms Kennedy was being “phased out” of the role of team leader and Mr Kent was being brought in. Phase two of the improvement program was introduced on 1 November 2017.
Ms Bray conceded that the weekly meetings were being called “weekly catch ups” but were definitely performance reviews.
Ms Bray said that following a further customer complaint on 21 November 2017 (in which the respondent told a customer he had been on annual leave, but in fact was not), the third stage of the improvement plan was implemented in a meeting on 23 November 2017. Ms Cowie also took part in that meeting by telephone. The respondent was given back some of his responsibilities for allocations as Ms Bray wanted him to begin working under his own steam.
Ms Bray reported continued difficulties with the respondent’s ability to perform his role and briefed one of the managers, Mr Tim Dempsey, to conduct an independent review of the respondent’s past complaints files. The review disclosed that the respondent’s work was below the benchmark. On 18 January 2018, Mr Kent identified a letter from the respondent to a customer, which was well below the standard.
Ms Bray referred to the meeting on 22 January 2018, in which she said they discussed the respondent’s progress of the informal improvement program. Ms Bray indicated that she went through each of the respondent’s files, and was disappointed that he could not talk about the cases at all. Ms Bray advised that she discussed with the respondent that they would be moving from an informal program to a formal performance improvement program, and that she would consult the Human Resources Department as to the next steps that should be taken. Ms Bray said that she offered the appellant’s counselling service to the respondent.
Ms Bray said she asked the respondent for some feedback about the matters discussed. She stated that he acknowledged that there was some further effort required, but that he thought there had been some improvement. He asked Ms Bray for a one month extension of his informal performance improvement program.
Ms Bray identified further shortcomings in the respondent’s performance.
Ms Bray said that a meeting with the respondent was arranged for 2 February 2018, at which she intended to give the respondent a formal warning about his performance. She noted that the meeting date was a Friday, and rather than having to tell the respondent at the end of the week, with the respondent’s agreement, she moved the meeting to 7 February 2018.
The meeting was attended by Ms Bray, the respondent, Mr Kent, the union representative and a trainee union representative. Ms Bray said that she took notes of the meeting, which were available if needed.
Ms Bray stated that she reviewed the matters discussed at the meeting on 22 January 2018, including the progress of the informal performance improvement program, and then presented the respondent with his formal improvement program. They discussed that program and she then presented the respondent with the formal warning letter. Ms Bray said they discussed in detail the contents of the letter, which had been drafted by the Human Resources Department.
Ms Bray said that the respondent mentioned that the informal and formal improvement programs had taken him by surprise, and came as a shock to him. He complained that he had never received anything in writing, and the subject matter of the queue review meetings had never mentioned performance management. The respondent told Ms Bray that he had been with the appellant for a long time and his performance had never been questioned.
Mr Kent also provided a statement dated 23 March 2018.[4]
[4] Reply, pp 60–67.
Mr Kent stated that he was seconded into the role of Team Leader Customer Experience and Resolution in mid-November 2017, and in about February 2017 his appointment became permanent. He said that he reported to Ms Bray, and 16 staff reported directly to him, including the respondent.
Mr Kent reported that the respondent returned to work following his heart surgery on 20 February 2017, working 3 days per week, and increased to 5 days per week from 20 March 2017. Mr Kent recalled that the respondent’s performance had been an ongoing issue for some time. He said the regular one on one coaching or guiding sessions called “catch up meetings” were more frequent than for the others in the team. Mr Kent said that at the catch up meetings, the Team Leader would go through the manager’s work load and cases and discuss them and give guidance to the manager. Mr Kent said that the respondent was provided with ongoing support, including peer support.
Mr Kent said that he was aware that the respondent had raised a concern with the Head of Customer Experience, Mr Ross Yabsley in relation to Ms Bray.
Mr Kent spoke of the respondent’s excessive case load, which he said could have been attributable to the respondent not resolving complaints. According to Mr Kent, this occurred in October or early November 2017, when Ms Kennedy was the team leader and he was “shadowing” Ms Kennedy before his secondment, which allowed him insight into the respondent’s performance. Mr Kent stated that Mr Yabsley, Ms Bray and Ms Kennedy collaborated to assist the respondent and reduced his case load, at first by half the number of cases and then in about late November 2017, it was again reduced, this time to a zero case load. By about 1 December 2017, the appellant began to re-allocate non-complex cases to the respondent. Mr Kent said that he allocated two cases per day. Mr Kent reported that the respondent’s performance still continued to be an issue, and he would check on the respondent daily. The respondent did not voice any concerns to him.
Mr Kent described “queue reviews” occurring between Ms Kennedy and the respondent, at which he was present, and in which Ms Kennedy would go through the respondent’s cases and give him instructions on how to resolve them. After Mr Kent stepped into Ms Kennedy’s role, he would have queue reviews on a weekly basis. Mr Kent said that a queue review meeting was scheduled for 19 January 2018, but the respondent asked for it be postponed so that he could get on top of his work, so it was rescheduled to 22 January 2018. Mr Kent was ill that day, so Ms Bray conducted the review in his stead. Mr Kent said that he was given notes of what was discussed at the meeting by Ms Bray, which recorded that the review went longer than was usual, and that Ms Bray discussed the next steps to be taken in the respondent’s cases.
Mr Kent advised that the respondent expressed unhappiness about the meeting with Ms Bray, was surprised that she wanted to know so much detail, and was not happy he was being questioned about his cases and his performance. Mr Kent commented that the respondent was never prepared for the queue review meetings, and that he thought Ms Bray was surprised that the respondent was not prepared for the meeting and did not bring his case notes with him.
Mr Kent indicated that he did not understand why the respondent, who had been in the role for a long time, was unable to discuss his cases at the review meetings. Mr Kent said that the respondent did not like any negative feedback about his performance. Mr Kent said that in meetings with the respondent, the term “performance improvement” was used.
Mr Kent stated that the respondent was sent an email invitation dated 2 February 2018, which was headed “Performance Improvement Plan - Next Steps” and invited the respondent to meet with Ms Bray. The respondent was given the option to have a support person attend, and the respondent elected to take the union representative.
Mr Kent said that in the meeting, the respondent indicated that he was not aware that he was on a performance improvement plan. Mr Kent confirmed that at the meeting, the respondent was given a formal warning letter, and that the Human Resources Department was consulted prior to issuing the letter, to ensure that the correct process was being followed. Mr Kent felt that everything had been done that could have been done to improve the respondent’s performance.
Mr Kent stated that the respondent was surprised by the letter, and he in turn, was surprised by the respondent’s reaction. Mr Kent recalled that he did not think that there was any documentation at the beginning of the informal improvement plan, but observed that everything that had been done to support the respondent’s performance indicated that he was on a performance improvement program, and that the respondent was given tools to assist him, which he did not use. Mr Kent confirmed that arrangements had been made for the respondent to receive psychological counselling, and that the respondent availed himself of that opportunity after the meeting on 7 February 2018.

The respondent’s lay evidence

The respondent provided a statement for the appellant’s investigator dated 21 March 2018,[5] and a further statement prepared for these proceedings dated 7 November 2018.[6]
[5] Reply, pp 48–59.
[6] ARD, pp 248–253.
In his first statement, the respondent confirmed the circumstances of his employment as a Customer Experience Manager with the appellant. He referred to the various channels through which complaints were made, and said that he was required to meet a deadline of five days within which a complaint was to be resolved.
The respondent recalled having made a complaint about Ms Bray in May 2017, but said he never received an outcome. He said that the complaint involved an occasion when, after he had resolved a complaint, Ms Bray instructed him to increase the offer he had made. He did so, but then Ms Bray told him to retract the offer.
The respondent said that the appellant conducted yearly performance assessments. He advised that his most recent assessment was in October 2017, in which his performance was recorded as “not rated”. The respondent indicated that this was because of personal and work circumstances. He pointed out that he had been off work due to ill health from November 2016 until the end of February 2017. He described the difficulties under which he worked, which included the nature and high volumes of the job, and staffing issues, which he said he had reported to Mr Yabsley.
The respondent said that his understanding was that the meeting on 29 September 2017 was not a performance meeting, but was a regular catch up meeting which he would normally have with Mr Kent. He contended that he was never sent an email invitation explaining that this “normal catch up meeting” was a performance meeting. He stated that at that meeting there were never any discussions at that time about his performance, but rather the discussions were about ways he could be supported in respect of workload pressures that were building.
The respondent asserted that between November 2017 and January 2018, he was unaware that his performance was being monitored or that it warranted performance action. The respondent pointed out that there was no evidence of what specific coaching was provided or any clear, agreed expectations, delivery dates or any ramifications if he did not succeed. He said he was not provided with an informal performance plan. The respondent contended that this was a clear breach of the appellant’s performance process.
The appellant observed that the emails he received about the meetings over this time were titled “weekly meetings”, “weekly catch ups” and queue “reviews,”[7] and those meetings were not the type of meetings that would normally lead to an informal or formal performance program.
[7] Respondent’s statement dated 21 March 2018; Reply, p 54, [70].
The respondent stated that on 28 December 2017, he received an email titled “queue review,” inviting him to a normal weekly catch up. It appears that this meeting eventually occurred on 22 January 2018.
The respondent said that on 22 January 2018, Mr Kent was absent from work and Ms Bray chaired the meeting. The respondent said that at the meeting, Ms Bray indicated that the meeting was about his performance and would follow a different format. The respondent said he was not given an agenda for the meeting, and felt that he was being “set up”. Ms Bray went through his files and was asking him questions. He said he did not have his computer with him to refer to, and had he known the meeting was about his performance, he would have arranged for a union advocate to attend.
The respondent said that in hind sight he should have asked to go and get his computer, but he was feeling anxious and “frozen.” The respondent said he began to think the meeting was of a serious nature and his “career flashed before” him.[8]
[8] Respondent’s statement dated 21 March 2018; Reply, pp 56–57, [76]–[77].

The respondent said that he continued to work as usual, expecting some sort of performance plan, as Ms Bray had said she would seek guidance from the Human Resources Department. He said he received an email invitation to attend a meeting with Mr Kent and Ms Bray on 1 February 2018. He did not have time to organise a union delegate to attend, so he asked Ms Cowie to attend with him. Ms Bray asked the respondent if he wanted to change the meeting to the following week, and he responded that he was happy with it occurring on that day or the following week. Ms Bray then postponed the meeting.
The respondent stated that he then received an email on 2 February 2018 from Mr Kent, advising that he wanted to meet to discuss the respondent’s informal performance improvement plan. The respondent said that at that stage, he had not received any notification of either a formal or informal performance plan. The respondent asserted that the meeting with Ms Bray on 22 January 2018, and the change in focus of the emails to his performance caused him to experience accelerated anxiousness.
The respondent referred to the meeting on 7 February 2018, which was chaired by Ms Bray and Mr Kent was present. The respondent had arranged for the union representative to be his support person, but had little time prior to the meeting to spend with him because a clearance had to be organised for the representative to enter the building.
The respondent said that Ms Bray announced that they were meeting about a formal review of his performance, and she handed him a letter. He became fearful of what might happen, and could not read the letter. In response to the union representative enquiring from what date the performance improvement program would be effective, Ms Bray said it would be backdated to 1 February 2018, because the meeting had been rescheduled from that day at the request of the respondent. The respondent stated that he felt more stressed, as he had not requested the meeting to be rescheduled, and it gave him one less week in the process.
The respondent said that he left the meeting and attended his general practitioner, Dr David Tan. The respondent worked until 13 February 2018, when he felt ill and broke down and cried, so he left work.
In the statement dated 7 November 2018, the respondent confirmed that he had not been given any prior notice about the warning in the letter handed to him on 7 February 2018, or any prior notice that there were issues with his files. He said that being given the letter caused a significant increase in his anxiety. He said he felt overwhelmed, having been employed with the appellant for over 30 years, and having had no issues in respect of his files before. He stated he was in complete shock, and found it extremely distressing.[9]
[9] Respondent’s statement dated 7 November 2018; ARD, pp 251–252.

The formal warning letter

The formal warning letter issued by the appellant was dated 7 February 2018.[10] The document was signed by Ms Bray and was 22 pages in length.
[10] Reply, pp 13–34.
The contents of the document asserted that at the meeting on 29 September 2017, the respondent was advised that he had been placed on an informal performance improvement plan. Seven focus areas and measures for improvement were identified, which were said to have been agreed for inclusion in the informal improvement plan. The targets and measures in respect of each focus area were listed, as well as “agreed actions”. Details of the discussions undertaken at eleven meetings conducted between 1 October 2017 and 22 January 2018 (wrongly referred to as 22 December 2017) were provided. In conclusion, Ms Bray acknowledged in the formal warning letter that there had been some slight improvement in the respondent’s performance, but said that the respondent’s performance was not to the standard required by the appellant, and the letter constituted a first formal warning in respect of the respondent’s performance. The respondent was advised in the letter that a formal performance improvement plan was in place, and that if he had not achieved the required level of performance by 28 February 2018, the appellant would consider its options, which included consideration of whether to terminate the respondent’s employment.

Emails dated 10 October 2017 and 16 October 2017

Ms Kennedy sent the respondent an email on 10 October 2017, under the subject heading of “Weekly Catch up 1:1-10/10/17,” following a meeting with the respondent to discuss the respondent’s complaints queue.[11] Ms Kennedy identified numerous files which required the respondent’s attention, cases that needed to be re-opened and reviewed and areas requiring coaching and development. Ms Kennedy confirmed that she would attend to the respondent’s progress letters for one week only, and would continue to allocate two files per day to the respondent.
[11] Reply, pp 83–85.
The respondent sent an email to Mr Yabsley on 16 October 2017,[12] in which the respondent said that he had been meaning to catch up with Mr Yabsley for some time in relation to his personal work and health situation. The respondent indicated that his complaints were in no way a reflection of Ms Kennedy as a manager, who he said was being very supportive of him.
[12] Reply, pp 81–83.
The respondent complained that his “health was being stretched to the limits” and that he had experienced a recent minor emotional breakdown at work, similar to an earlier experience prior to the onset of his coronary artery symptoms. The respondent added that:
“Approximately 2 weeks ago I also had a discussion with Aimee about the situation regarding my escalating queue which at the time had around 36 items. I clarified with Aimee if the discussions were around a reflection on my performance and she pointed out that it was not the case apart from seeing how the leadership team could help to get me back on a decent playing field with weekly discussions to see how I was going.”[13]
[13] Reply, p 82.
The respondent referred to a number of issues that impacted the streamlining process which were not factored into the complaint resolution process, and said that he continued to be given new allocations while still attending to his existing portfolio. The respondent indicated that two allocations per day exceeded his target of 1.5 allocations, and he feared that the workload would negatively impact his health.
Mr Yabsley replied by email on the same date, and advised that he would speak with the respondent both by telephone and in person.[14]

The respondent’s medical evidence

[14] Reply, p 81.

Dr David Tan

A copy of the clinical notes of Doctor David Tan, general practitioner, were in evidence.[15] The notes are difficult to read and were not the subject of submissions to the Arbitrator, or relied on in the appeal. It is not necessary, therefore, to refer to the entries in those notes, other than those considered by the Arbitrator.
[15] ARD, pp 30–235.
Relevantly, the notes record that on 9 December 2016, the respondent attended Dr Tan in the context of treatment for his coronary issues. Dr Tan noted that the respondent had been at work on 25 November 2016, was feeling overloaded with work, when his blood pressure escalated. Dr Tan noted the treatment that followed, and also noted that the respondent complained of being “stressed out” at work.[16] On 9 January 2017, the respondent again attended Dr Tan, and Dr Tan recorded that the respondent was anxious in relation to his return to work.[17]
[16] ARD, p 47.
[17] ARD, p 47.
The respondent attended Dr Tan on 8 February 2018 following the meeting with Ms Bray the day before. The respondent complained to Dr Tan that at that meeting, he had been handed a formal warning letter and put straight onto a formal performance improvement plan without an informal plan being first put in place. He further complained that he had recently raised concerns about Ms Bray with her manager, and he was suffering stress from work and felt bullied.[18]
[18] ARD, p 48.
A bundle of WorkCover certificates of capacity issued by Dr Tan and annexed to an Application to Admit Late Documents (AALD) dated 8 January 2019 were admitted into evidence over the appellant’s objection. The certificates certified the respondent as having no capacity for work from 13 February 2018 until 14 January 2019.[19]
[19] AALD, pp 8–46.
Relevantly, in a certificate dated 27 February 2018, Dr Tan described the respondent’s injury as “reactive anxiety and depression due to incidents at work since June 2014 and has accelerated on the 7^th February when he received a formal letter.” Dr Tan attributed the respondent’s condition to the manner in which Ms Bray treated the respondent. Dr Tan stated the date of injury to be 8 February 2018.[20]
[20] AALD, p 8.
Dr Tan also provided a report dated 27 August 2018 directed to the respondent’s legal representatives.[21] Dr Tan reported that the respondent had attended him on 8 February 2018, and was distressed and crying and complained of insomnia and anxiety. He said the respondent reported that he felt bullied and intimidated, and had been given a formal warning without firstly having been given an informal one. Dr Tan recorded that the respondent was too fearful and anxious to return to work after Ms Bray had asked him questions in front of other staff.
[21] ARD, p 14.
Dr Tan prescribed Avanza tablets to reduce anxiety and depression, and referred the respondent for psychological counselling and review by Dr Ben Teoh, psychiatrist. Dr Tan opined that the respondent was unfit to work until the workplace issues were resolved, although he said the respondent would be fit to attend meetings targeted at resolving the issues.

Dr Ben Teoh

The respondent consulted Dr Teoh on 9 March 2018 and 6 April 2018. In his report dated 10 July 2017,[22] Dr Teoh recorded that Ms Bray had raised concerns about the respondent’s performance and in February 2015 [presumably 2018] issued the respondent with a formal warning about his performance. Dr Teoh also recorded the history that a new manager was appointed in November 2017, who regularly reviewed the respondent’s files. Dr Teoh noted that the respondent ceased work on 13 February 2018.
[22] ARD, pp 11–13.
Dr Teoh said that the respondent reported symptoms of insomnia and anxiety, and was worried about his employment and preoccupied with negative thoughts. Dr Teoh noted that the respondent had been prescribed Avanza, and referred to a psychologist for counselling.
Dr Teoh diagnosed the respondent as suffering from a chronic adjustment disorder with mixed anxious and depressed mood. Dr Teoh opined that the respondent should not return to work for a further two months, over which time he should receive counselling and mediation to resolve the work issues. Dr Teoh was of the view that the respondent’s prognosis would depend on a resolution of the workplace issues and the respondent’s employment was a substantial contributing factor to his psychiatric history.

Dr Rastogi

Dr Richa Rastogi, consultant psychiatrist, was qualified to examine the respondent and provide a forensic opinion on the respondent’s behalf. She provided a report dated 8 August 2018.[23] The Arbitrator concluded that he found it difficult to accept Dr Rastogi’s opinion on causation and incapacity, and provided his reasons for preferring other evidence. Neither the appellant nor the respondent have challenged the Arbitrator’s failure to accept that evidence. I am of the view that the Arbitrator’s comments about that evidence were appropriate and his conclusions about Dr Rastogi’s evidence were correct. Consequently, it is not necessary to discuss Dr Rastogi’s opinions in this appeal.

The appellant’s medical evidence

[23] ARD, pp 1–9.

Dr Vickery

Dr Graham Vickery, psychiatrist, was qualified by the appellant to examine the respondent and provide an opinion. He provided a report dated 8 May 2018.[24]
[24] Reply, pp 1–12.
Dr Vickery took a history of the respondent’s previous coronary artery issues that resulted in a stent being put in place. Dr Vickery recorded the events leading up to the meeting on 7 February 2018 and the respondent being handed a formal warning letter. Dr Vickery noted that the respondent reported that he felt that 7 February 2018 was the “last day in my life,”[25] consulted Dr Tan and was placed on sick leave. Dr Vickery further noted the treatment provided to the respondent, and the respondent’s continuing symptoms, which included disturbed sleep with dreams of being chased.
[25] Dr Vickery’s report, Reply, p 4.
Dr Vickery reported that the respondent continued to socialise, had a supportive family network, attended to daily tasks, enjoyed listening to music and gardening, was able to drive and had no impairment in hygiene or grooming. Dr Vickery also took the history that there had been some cognitive impairment, which was improving.
Dr Vickery diagnosed an adjustment disorder, which was resolving, and was of the opinion that the respondent’s employment with the appellant was wholly or predominantly causative of the injury which resulted from performance review and disciplinary action. Dr Vickery said that the respondent was frustrated and anxious in relation to his performance reviews since October 2017, however his psychological symptomology and incapacity commenced on 7 February 2018.
In relation to the respondent’s capacity for work, Dr Vickery was of the opinion that the respondent had the capacity to resume work in partial pre-injury duties, and could cope with other duties of a selected nature with less responsibilities.

THE ARBITRATOR’S REASONS

The Arbitrator noted that the appellant accepted that the respondent suffered from a psychological injury arising out of and in the course of his employment. The Arbitrator further noted, however, that the appellant alleged that the psychological injury was not entitled to weekly compensation or treatment expenses because the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by the appellant in respect of performance appraisal, discipline or termination of the respondent’s employment pursuant to s 11A(1) of the 1987 Act. The Arbitrator also noted that the appellant asserted that, if its defence pursuant to s 11A failed, the respondent did not suffer any incapacity for work, or was capable of earning his pre-injury earnings in suitable employment.
The Arbitrator observed that the onus in respect of the defence raised pursuant to s 11A(1) of the 1987 Act rested with the appellant. The Arbitrator turned his mind to those parts of the appellant’s evidence that were, in his view, salient to the appellant’s case. The Arbitrator provided a detailed summary of the statement evidence from Mr Kent and Ms Bray. The Arbitrator reviewed the contents of the warning letter, and its concluding expectations of the respondent through the formal improvement plan and the potential outcomes. The Arbitrator also summarised the respondent’s statement evidence.
The Arbitrator recorded a summary of the submissions by each party.
The Arbitrator extracted the passage relied upon by the appellant from the judgment of Sackville AJA in Northern NSW Local Health Network v Heggie[26] (with which Basten and Ward JJA agreed), in which Sackville AJA set out the propositions that were consistent with the statutory language and the authorities in respect of the construction of s 11A(1) of the 1987 Act.[27]
[26] [2013] NSWCA 255; 12 DDCR 95 (Heggie).
[27] Heggie, [59]
The Arbitrator noted that there was a disagreement between the parties as to what was the injury relied on by the respondent. He referred to the appellant’s submission that the injury pleaded related to an event which occurred on 7 February 2018 and not earlier events. The Arbitrator further referred to the respondent’s submission that the injury was one that occurred over time and “culminated” with the events on 7 February 2018, making the date of injury a “deemed” date, as it was the first day of incapacity for the purpose of ss 15 and 16 of the 1987 Act (the disease provisions). The Arbitrator referred to the word “culminating” as suggesting a climax or end of a series of incidents which occurred over time, and ruled that the pleadings referred to a series of events and not a specific incident that occurred on 7 February 2018.
The Arbitrator was critical of the injury description. He described the use of such disparaging language as inappropriate, and did not advance the respondent’s case. He advised that it made it more difficult for the respondent to prove his case, may cause offence and may also impede prospects of settlement. The Arbitrator noted, however, that at the arbitration hearing, the injury description was ignored by the parties and the matter proceeded on issues of the nature of the injury, its causes and whether the appellant’s actions were reasonable.
Referring to Heggie, the Arbitrator noted that the appellant must prove its actions were reasonable in both process and substance.
The Arbitrator set out his reasoning process in respect to the determination of the respondent’s injury and its causation. He referred to Dr Vickery’s consideration of the distinction between an emotional response and psychological symptomology, and quoted Dr Vickery’s opinion that the respondent:
“was frustrated and anxious in relation to his performance reviews since October 2017 however his psychological symptomatology and incapacity commenced on 7 February 2018.”[28]
[28] Dr Vickery’s report; Reply, p 11, [13(c)].
The Arbitrator compared Dr Vickery’s views to those of Dr Rastogi, who opined that:
“His psychological injury is wholly contributed to [by] bullying and harassment, rather than performance issues and the formal warning that were never discussed with him, nor was he given an opportunity to be aware of or provided support by the organisation [to] date.”[29]
[29] Dr Rastogi’s report; ARD, pp 6–7.
The Arbitrator considered that the “bullying and harassment” to which Dr Rastogi referred may have been a reference to the respondent’s complaint about Mr Bray in May 2017, the commencement of performance management without consultation or feedback, and the issue of the formal warning without adequate notice.
The Arbitrator remarked that Dr Vickery’s opinion reflected the dichotomy between mere emotional response and physiological or pathological change, which he considered a fundamental principle in workers compensation law, relying on Anderson Meat Packing Co Pty Ltd v Giacomantonio.[30]
[30] [1973] 47 WCR (NSW) 3.
The Arbitrator also referred to the clinical notes of Dr Tan, although those notes were not the subject of submissions at the arbitration and were in parts, illegible. The Arbitrator noted that Dr Tan recorded on 9 December 2016 that the respondent was suffering “stress” due to the nature of his employment, and on 9 January 2017, that the respondent was anxious about returning to work. Both of those consultations were in the context of consultations referrable to the respondent’s coronary disease. The Arbitrator further noted that the next relevant entry was not until 8 February 2018, when the respondent raised concerns about the work performance meeting on 7 February 2018, the respondent’s complaint made about Ms Bray, and the change of management in the customer experience team.
The Arbitrator took into account the description of injury recorded by Dr Tan on the WorkCover certificate of capacity dated 27 August 2018, together with Dr Tan’s observations made in his report of the same date.
The Arbitrator noted that Dr Teoh diagnosed that the respondent suffered from an adjustment disorder and required counselling and mediation before he would be able to return to work. The Arbitrator and further noted the respondent’s complaints recorded by Dr Teoh of Ms Bray’s concerns about and review of the respondent’s performance and the formal warning.
The Arbitrator observed that it was necessary for the respondent to either establish physiological change, the contraction of a disease to which his employment was a contributing factor, or the aggravation of a disease, in accordance with Austin v Director General of Education.[31] The Arbitrator said that an acceptance of the opinion of Dr Vickery would result in a finding that the respondent suffered injury on 7 February 2018, rather than a disease process.
[31] (1994) 10 NSWCCR 373.

The Arbitrator noted the appellant’s submissions that there was cogent evidence pointing to the respondent having suffered an injury “simpliciter” on 7 February 2018, which included the respondent’s initial “unequivocal” statement that his current health condition resulted from being handed the formal warning letter, which overwhelmed him.
The Arbitrator considered the evidence that pointed to potential contrary causes, which included:
(a)    the complaint made in May 2017 about Ms Bray’s conduct, which Dr Rastogi considered relevant to the development of a disease process;
(b)    the respondent complained of a heavy workload in an email to Mr Yabsley on 16 October 2017, and despite his case load being reduced, the respondent was allocated two cases per day which was beyond his capacity;
(c)    the respondent’s complaint to Mr Yabsley in the same email that his health was “stretched to the limit”, and
(d)    the respondent complained of increasing anxiety during the meeting on 22 January 2018, felt his career flashed before him and he was “frozen”.
The Arbitrator expressed doubt that the stress surrounding the complaint about Ms Bray made in May 2017 played any significant role in the respondent’s psychological condition. The Arbitrator reasoned that the nature of the incident, the absence of medical treatment and the time that had elapsed between that event and February 2018 were not consistent with the event being a cause of the psychological condition.
The Arbitrator observed that the medical evidence did not suggest that the respondent’s injury arose from excessive workload with which he had difficulty coping. The Arbitrator said that the respondent’s account of his reaction to the meeting on 22 January 2018 suggested that the respondent may have suffered symptoms of a psychological injury during and following that meeting.
The Arbitrator reasoned that Dr Tan’s suggestion in the medical certificates that the respondent’s psychological injury resulted from his employment over the previous several years was inconsistent with the lay and specialist medical evidence. The Arbitrator also considered that Dr Rastogi’s view that the respondent’s psychological injury resulted from bullying and harassment, rather than performance issues, was equally difficult to accept. The Arbitrator was of the view that in the circumstances of this case, assertions of bullying and harassment were not helpful in identifying the incidents that led to injury. He added that unless Ms Bray’s evidence was entirely rejected, it was apparent that Ms Bray had good reason to monitor the respondent’s performance, and some of the measures she adopted to assess the respondent’s performance were reasonably objective. The Arbitrator accepted that the respondent may have been upset that Ms Bray was monitoring his work, and may have felt intimidated by Ms Bray, but he was required to assess which of Ms Bray’s actions, were causative of the injury. The Arbitrator was again critical of the reference to bullying and harassment, which he called a “catch all label” and said that the use of such a label to describe “apparently courteous interaction between worker and manager only obfuscates the issue. It also leaves the distinct impression that Dr Rastogi has adopted the role of an advocate.”[32]
[32] Mani v Westpac Banking Corporation [2019] NSWWCC 77 (Reasons), [90].
The Arbitrator concluded that Dr Vickery’s opinion that the injury resulted from the events on 7 February 2018 was more probable, and that taking the evidence as a whole, there was a compelling case that the respondent’s psychological injury was predominantly caused by the meeting on 7 February 2018 and the respondent being issued with the formal warning letter, in accordance with s 11A(1) of the 1987 Act.
The Arbitrator proceeded to consider whether the meetings on 22 January 2018 and 7 February 2018 fell within the ambit of s 11A of the 1987 Act, and if so, whether the appellant’s actions were reasonable.
The Arbitrator referred to the decision of the Compensation Court in Kushwaha v Queanbeyan City Council,[33] in which Neilson CCJ discussed the meaning of “discipline” and noted that Candy ADP of the Workers Compensation Commission followed that authority in ISS Property Services Pty Ltd v Milovanovic.[34] The Arbitrator also considered the relevant authorities in relation to “performance appraisal”[35] that established that performance management and a performance improvement program do not fit within the phrase “performance appraisal” adopted in s 11A(1) of the 1987 Act.
[33] [2002] NSWCC 25; 23 NSWCCR 339 (Kushwaha).
[34] [2009] NSWWCCPD 27 (Milovanovic).
[35] Chisholm v Thakral Finance Pty Ltd t/as Novotel Brighton Beach [2011] NSWWCCPD 39; Irwin v Director General of School Education (Compensation Court of NSW, Geraghty CCJ, 18 June 1998, no 14068 of 1997, unreported) (Irwin); Dunn v Department of Education and Training (2000) 19 NSWCCR 475.
The Arbitrator said that it was necessary to go behind the label of the action and look at the substance in order to determine whether the conduct causing the injury constituted “performance appraisal.” The Arbitrator considered that it was arguable that the informal or formal plans may fall within the parameter of “performance appraisal”, but that it was not necessary to determine that issue, given his subsequent findings.
The Arbitrator rejected the submission made by the appellant that the issue of the warning letter and the meeting on 7 February 2018 were actions in relation to termination, but said that, again because of his subsequent findings, it was unnecessary for him to consider the issue further.
The Arbitrator reasoned as follows:
“It is tolerably clear that the warning notice involved chastisement and that the balance of the meeting was incidental to the issue of the letter. In other words, it was part of the process leading up to the issuing of the warning letter. It was in respect of discipline. The meeting was also intended by the [appellant] to be the first meeting with the applicant in a formal performance improvement plan. It is the [appellant’s] contention that there was an earlier informal performance improvement plan in place which commenced on 29 September 2018. The applicant disputes that he was told of this plan. While this argument is important, it must be kept in mind that section 11A(1) does not refer to performance improvement as one of the actions of the employer which can defeat a claim for compensation for a psychological injury.”[36]
[36] Reasons, [94].
The Arbitrator determined that the warning letter and the meeting held on 7 February 2018 were matters with respect to discipline, following Kushwaha and Milovanovic, and said it was therefore necessary for him to consider whether those actions were reasonable. At the arbitration, he invited the parties to provide written submissions in respect of the relevance of Pirie v Franklins Ltd,[37] a decision by Neilson CCJ. After reading the submissions of both parties and reviewing that decision, the Arbitrator formed the view that the present case was factually removed from Pirie, and accepted the appellant’s submission that Pirie should be distinguished. The Arbitrator did, however, draw assistance from the principles relating to reasonableness set out in that case.
[37] [2001] NSWCC 167 (Pirie).
The Arbitrator noted the submissions made by the appellant’s counsel about whether the matters that went before the action under consideration (the issue of the warning letter on 7 February 2018) ought to be considered. The Arbitrator quoted from those submissions as follows:
“the extensive performance management, guidance, coaching and support, is relevant in determining the reasonableness of that action but it is not a part of it. Similarly, what occurred afterwards is not relevant, particularly in light of the fact that such events were not pleaded by the Applicant.”[38]
[38] Appellant’s written submissions to the Arbitrator dated 18 January 2019, [11].
The Arbitrator accepted that the appellant’s approach was correct.
The Arbitrator summarised the respondent’s allegations as to why the appellant’s actions were unreasonable. The respondent’s arguments were that:
(a)    he was unaware that his performance was an issue before the meeting on 22 January 2018, and that there had been a performance improvement plan in place;
(b)    he was completely ambushed at that meeting, which followed a completely different format;
(c)    he was deprived of the opportunity to have a support person at that meeting, and to refer to his files or computer;
(d)    he felt set up;
(e)    the date of the meeting on 7 February 2018 was changed by Ms Bray, who backdated the commencement of the performance improvement plan to the date on which the meeting had been previously arranged;
(f)    there was insufficient time to brief the union representative before the meeting, and
(g)    he was handed the voluminous formal warning letter at the meeting, when he was incapable of reading it.
The Arbitrator observed that the employer is required to prove its actions were reasonable, but the action need not be without blemish (referring to Heggie) and there may be important countervailing matters that the employer must consider.
The Arbitrator formed the view that there was little substance to the criticism by the respondent of the meeting on 7 February 2018, noting that the respondent was aware that the meeting would be about his performance, and that Ms Bray had consulted the Human Resources Department about the matter. The respondent also had the assistance of the union representative, and it was not suggested that the union representative criticised the format of the meeting, or that he or the respondent sought to have it postponed in order to facilitate a more thorough consultation between them. The Arbitrator found it difficult to understand why the back-dating of the performance improvement plan was of significance.
The Arbitrator concluded that on balance, the appellant established reasonableness in respect of the meeting. He said, however, that he had concerns about some aspects of the appellant’s evidence in relation to the train of events that led to the meeting.
The Arbitrator noted that the respondent had been employed for many years without complaint, until Ms Bray identified him as an employee who required coaching and upskilling in late 2016 or early 2017. The Arbitrator indicated that those dates coincided with the respondent not being able to work because of his coronary artery issues and said it was unclear how a decision in relation to the respondent’s performance could have been made at that time.
The Arbitrator referred to the emails dated 10 and 16 October 2017, and said that those emails did not suggest that an informal improvement program was in place, and that it certainly appeared that the respondent was unaware of any such program. The Arbitrator considered that, on the basis of the email dated 16 October 2017, there was no reason to doubt that the respondent had a conversation with Ms Bray in which he asked whether the discussions Ms Bray was having with him were about his performance, which she said they were not. Further, there was a “no rating” on the respondent’s performance review in October 2017. The Arbitrator said that this evidence was incompatible with the respondent being on an informal improvement program.
The Arbitrator noted that Ms Bray said that the informal improvement program moved to stage 2 on 1 November 2017 and stage 3 on 23 November 2017. The Arbitrator said that the email invitations did not change in terms of the subject matter of the proposed meetings, and conveyed a sense of weekly catch-ups, rather than an improvement program. The Arbitrator considered that, on the evidence, there had to be some doubt that Ms Bray had told the respondent he was moving through the phases of an improvement plan, and that his employment turned on the outcome of that plan. The Arbitrator concluded that the absence of reference to an informal improvement plan in the emails may have been because Ms Bray was concerned that the respondent would not turn up to the meetings. The Arbitrator considered that the absence of reference to such plans in the emails tended to show that the respondent was not told about the informal performance plan or its stages.
The Arbitrator referred to the lack of evidence to show that the appellant was required to implement an informal performance improvement program before moving to a formal program, and thought it was possible that there was no such requirement. The Arbitrator said that the appellant may have had a set procedure in place for dealing with performance improvement. The use of an informal program may have been discretionary, although as it had been adopted in the formal warning letter as a basis for implementing the formal program, that seemed unlikely. The Arbitrator concluded that the evidence did not disclose whether the prior implementation of an informal improvement plan was or was not a necessary step in the procedure.
The Arbitrator further concluded that if the appellant chose to put in place an informal performance improvement plan, with the knowledge that it could lead to a formal plan which in turn may lead to an end to the respondent’s career, then the respondent should have been informed of the nature of the plan and its consequences. In the Arbitrator’s view, not to do so would amount to a failure to afford the respondent procedural fairness.
The Arbitrator determined that the appellant had not proven that it did inform the respondent of those matters. The Arbitrator said that he appreciated it may have been a difficult matter to raise with the respondent, but that not to have informed the respondent left the appellant open to the criticism that the respondent was ambushed at the meeting on 22 January 2018. Had the respondent been aware that that the meeting was the final meeting of an informal performance program, he may have had the opportunity to be better prepared.
The Arbitrator concluded that the appellant’s actions in respect of the informal performance improvement plan led directly to the formal warning letter and the formal improvement plan. The Arbitrator said that the tainted informal improvement plan infected the meeting on 7 February 2018 and the formal warning letter.
The Arbitrator also observed that the formal warning letter referred to the respondent’s breaches of the extensive steps taken in the informal process as the basis for the implementation of the formal plan and some of those breaches preceded the date the informal plan was initiated. The Arbitrator considered that it seemed unreasonable that the appellant relied upon breaches of a plan about which the respondent was not fully aware. The Arbitrator said, however, that the parties had not submitted on that evidence, and it was not necessary for him to consider that evidence further.
The Arbitrator determined that the appellant failed to prove that its actions in respect of discipline were reasonable. The Arbitrator added that such a finding was not the same as finding that the appellant’s actions were unreasonable, and nor was it a determination of the appellant’s competence.
The Arbitrator turned to a consideration of the respondent’s capacity for work.
The Arbitrator again referred to the report of Dr Rastogi, and said that Dr Rastogi’s view of the respondent’s capacity reinforced his view that Dr Rastogi had expressed her view in colourful and “possibly strident” language. The Arbitrator referred to the opinion of Dr Teoh, the treating psychiatrist, and the conditions Dr Teoh placed on any return to work. The Arbitrator said that Dr Teoh did not suggest that the respondent would remain unemployable. The Arbitrator further referred to Dr Tan’s opinion that the respondent’s issues would need to be resolved before he could return to work. The Arbitrator formed the view that it was difficult to see why the respondent would be unfit until the issues were resolved and then become fit.
The Arbitrator noted Dr Vickery’s view when he examined the respondent in May 2018, was that the respondent could return to partial pre-injury duties of a selected nature with less responsibility.
The Arbitrator concluded that Dr Vickery’s opinion did not in any significant way depart from that of Dr Teoh, and accepted Dr Vickery’s opinion. The Arbitrator determined that the respondent was incapacitated for all work up until 8 May 2018, and thereafter was fit to perform the most basic clerical work on a part time basis. The Arbitrator made an assessment of the respondent’s earnings in suitable employment by reference to the minimum wage, given that the respondent would only be likely to perform basic tasks.
The Certificate of Determination issued on 22 February 2019 records:
“The Commission determines:
1.     The applicant suffered psychological injury namely an adjustment disorder arising out of and in the course of his employment on 7 February 2018.
2.     The respondent has not established that the injury was wholly or predominantly caused by reasonable action in respect of discipline, performance appraisal or termination.
3. As a result of the injury the applicant had no current earning capacity from 8 February 2018 to 8 May 2018 and was able to perform suitable employment as that phrase is defined in section 32A of the Workers Compensation Act 1987 from 9 May 2018 to date and continuing.
4.     At all material times the applicant’s PIAWE was $1,465 in accordance with the respondent’s schedule of earnings.
5.     From 9 May 2018, the applicant was able to earn the sum of $360 per week (being one half of the minimum wage) in suitable employment.
6. Award for the applicant at the rate of $1391.75 for the period 8 February 2018 to 8 May 2018 and at the rate of $812 per week thereafter pursuant to section 37 of the Workers Compensation Act 1987.
7.     Liberty to apply in respect of the calculations and periods above.
8.     Respondent to pay the applicant’s medical and hospital expenses pursuant to section 60.”

GROUNDS OF APPEAL

The appellant brings two grounds of appeal. The grounds are poorly drafted, but can be expressed as follows:
(a) Ground one: The Arbitrator erred in fact and/ or law in his determination that the respondent’s psychological injury was not wholly or predominantly caused by reasonable action taken by the appellant with respect to performance appraisal; or discipline, and
(b) Ground two: The Arbitrator erred in fact, law or discretion in relation to his determination of the respondent’s entitlement to weekly compensation.

LEGISLATION

Section 11A(1) of the 1987 Act provides as follows:
“11A No compensation for psychological injury caused by reasonable actions of employer
(1) No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.”
Section 32A of the 1987 Act defines suitable employment as:
“suitable employment, in relation to a worker, means employment in work for which the worker is currently suited:
(a) having regard to:
(i) the nature of the worker’s incapacity and the details provided in medical information including, but not limited to, any certificate of capacity supplied by the worker (under section 44B), and
(ii) the worker’s age, education, skills and work experience, and
(iii) any plan or document prepared as part of the return to work planning process, including an injury management plan under Chapter 3 of the 1998 Act, and
(iv) any occupational rehabilitation services that are being, or have been, provided to or for the worker, and
(v) such other matters as the Workers Compensation Guidelines may specify, and
(b) regardless of:
(i) whether the work or the employment is available, and
(ii) whether the work or the employment is of a type or nature that is generally available in the employment market, and
(iii) the nature of the worker’s pre-injury employment, and
(iv) the worker’s place of residence.”

Section 35 of the 1987 Act identifies the factors to determine the rate of weekly payments, which includes:
“AWE means the worker’s pre-injury average weekly earnings.

D (or a deductible amount) means the sum of the value of each non-pecuniary benefit (if any) that is provided by the employer to a worker in respect of that week (whether or not received by the worker during the relevant period), being a non-pecuniary benefit provided by the employer for the benefit of the worker or a member of the family of the worker.

E means the amount to be taken into account as the worker’s earnings after the injury, calculated as whichever of the following is the greater amount:
(a) the amount the worker is able to earn in suitable employment,
(b) the workers current weekly earnings.”
Section 37 of the 1987 Act relevantly provides:
“The weekly payment of compensation to which an injured worker who has current work capacity and has returned to work for less than 15 hours per week (or who has not returned to work) is entitled during the second entitlement period is to be at the rate of:
(a) (AWE × 80%) − (E + D), or
(b) MAX − (E + D),
whichever is the lesser.”

SUBMISSIONS

Ground one – the appellant’s submissions

The appellant submits that there is no issue as to causation because the Arbitrator found that the meeting on 7 February 2018 was the predominant cause of the respondent’s psychological injury and the meeting was in respect of discipline. The appellant says that the Arbitrator also formed the view that the appellant had established reasonableness in respect of the meeting. The appellant contends that it would therefore follow that the appellant was not liable to pay compensation for the injury. The appellant referred to the Arbitrator’s consideration of the suggestion of psychological symptoms in the context of the meeting on 22 January 2018, and pointed out that despite that evidence, the Arbitrator made the finding that the injury resulted from the meeting on 7 February 2018.
The appellant asserts that its defence pursuant to s 11A(1) was therefore made out. The appellant says that having made those findings, the Arbitrator went beyond them by proceeding to consider the meeting two weeks earlier. The appellant submits that the Arbitrator fell into error by determining that the earlier meeting “infected” the meeting on 7 February 2018.
The appellant relies on the observations of Spigelman CJ in Department of Education and Training v Sinclair,[39] where his Honour said:
“To avoid the absurdity that arises from a literal approach, and having regard to the context of the legislative scheme and its purpose, it is necessary to understand s 11A to mean that the employer is not liable where, to the extent that the employment contributed to the injury, that contribution was wholly or predominantly caused by reasonable action taken with respect to ... discipline.”[40] (emphasis in original)
[39] [2005] NSWCA 465; 4 DDCR 206 (Sinclair).
[40] Sinclair, [58].
The appellant says that the Arbitrator did not find that the disciplinary “process” was causative of the injury and the enquiry as to reasonableness could only arise in the context of the meeting, which was found to have been reasonable.
The appellant refers to the Arbitrator’s finding that in the absence of evidence that the respondent was aware that there was an informal performance improvement plan in place, procedural fairness was not afforded to the respondent. The appellant points out that this was in the absence of any evidence to show that such a process needed to be instituted or that the respondent was required to be advised of it.
The appellant contends that the Arbitrator drew inferences that were not available to him on the evidence in relation to the nature of an informal improvement plan and the manner in which it ought to have been conducted.
The appellant says that there was a process in place since September 2017, in which there were weekly “catch ups” and regular reviews of the respondent’s work. The appellant refers to Mr Kent’s evidence that he would sit in on meetings between Ms Kennedy and the respondent where Ms Kennedy would go through the respondent’s cases and give him instructions on how to resolve cases, but that by the next meeting the respondent had not attended to those matters. The appellant submits that whether or not the respondent was advised that that process was an informal performance improvement plan, it was, nonetheless, action with respect to discipline. The appellant cites Neilson CCJ’s decision in Kushwaha, where his Honour found that the process of drawing the worker’s unsatisfactory work performance to their attention, asking them to improve, and suggesting ways in which to improve, constitutes discipline.[41]
[41] Kushwaha, [152].
The appellant further refers to Sinclair as authority to say that the course of conduct may be reasonable, even if particular steps taken in the course of the conduct were not.[42] The appellant asserts that the focus must be on the action itself, rather than the whole history of the relationship, relying on Ponce v Department of Education & Training,[43] and says that it is also necessary to consider the issue from both the employer and the employee’s perspectives, and that it is not a matter for the Commission to consider whether other actions could have been more reasonable, citing Hartley v Dux Manufacturing Pty Ltd.[44]
[42] Sinclair, [97].
[43] [2010] NSWWCCPD 77.
[44] [2008] NSWWCCPD 55.
The appellant submits that the Arbitrator has focussed only on the respondent’s “surprise” and determined that action should have been taken by the appellant to avoid the surprise. The appellant contends that the Arbitrator sought to identify conduct which he considered more reasonable, rather than objectively considering whether the conduct was reasonable.
The appellant says that it is not apparent whether the Arbitrator turned his mind to the question of the appellant’s interests and the process that had been underway for a number of months. The appellant points to the evidence of Ms Bray, who stated that at the meeting on 22 January 2018, there was a discussion about the informal improvement plan and the respondent sought to have it extended, rather than move onto a formal improvement plan. That evidence, the appellant says, is inconsistent with the respondent’s evidence, and is not addressed by the Arbitrator. The appellant contends that the failure to address that evidence discloses that the Arbitrator did not turn his mind to the interests of the appellant in his consideration of whether the relevant actions were reasonable. The appellant adds that it was apparent from the respondent’s email dated 16 October 2017 that the respondent was aware of concerns about his performance, and this evidence is contrary to the Arbitrator’s finding. The appellant says that it was clear that the respondent at some point would have been notified of a formal performance plan, and the appellant had provided him with a lengthy period of time in which to improve his performance, before the meeting took place on 7 February 2018.
The appellant concludes that the Arbitrator has made errors of fact and law in finding that the meeting on 22 January 2018 rendered the meeting on 7 February 2018 unreasonable.

Ground one – the respondent’s submissions

The respondent submits that the Arbitrator’s decision was one of fact, and the Arbitrator applied the correct test, which was as expressed by Sackville AJA in Heggie that:
“(i) A broad view is to be taken of the expression ‘action with respect to discipline’. It is capable of extending to the entire process involved in disciplinary action, including the course of an investigation.
(ii) Nonetheless, for s 11A(1) to apply, the psychological injury must be wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer.
…
(vii) If an Arbitrator does not apply a wrong test, his or her decision that an action with respect to discipline is or is not reasonable is one of fact.”[45] (emphasis in original)
[45] Heggie, [59].
The respondent referred to the Arbitrator’s findings that the injury was predominantly caused by the meeting on 7 February 2018 and that the meeting was in respect of discipline.
The respondent points out that the Arbitrator rejected many of the respondent’s submissions, such as its submission that Ms Bray’s intervention in the settlement of the complaint in May 2017 was causative of the injury.
The respondent contends that the Arbitrator was correct in reviewing the evidence of the appellant’s behaviour leading up to the meeting on 7 February 2018, and correctly arrived at his conclusion that the tainted informal improvement plan infected the meeting on 7 February 2018, leading the Arbitrator to conclude that the appellant had failed to establish its actions were reasonable.
The respondent submits that if there was any doubt as to the Arbitrator’s finding, it is sufficient to consider the formal warning letter and its contents. The respondent says that the document of its own establishes that the appellant’s conduct could not be considered reasonable.
The respondent concludes that the Arbitrator carefully reviewed the evidence before making his finding of fact, and applied the correct test. On that basis, the appeal should be dismissed.

Ground two – the appellant’s submissions

The appellant submits that the Arbitrator’s findings in respect of capacity do not properly address the concept of suitable employment as defined in s 32A of the 1987 Act.
The appellant contends that it is not clear how the Arbitrator, having accepted Dr Vickery’s view on capacity, found a restriction of the hours the respondent was capable of working. The appellant says that Dr Vickery does not express any limitations as to time and even a modification of the respondent’s pre-injury duties could not be described as “the most basic of clerical or administrative work.”
The appellant also says that Dr Teoh did not describe the appellant’s capacity in those terms.
The appellant refers to Giankosv SPC Ardmona Operations Ltd,[46] and says that the task is to identify whether there are any “real jobs” which the worker is able to do, regardless of whether those jobs are available.
[46] [2011] VSCA 121.
The appellant further refers to Cronje v Leighton Contractors Pty Ltd,[47] where it was said that in order to determine the amount a worker is able to earn in some suitable employment, regard must be had to the nature of the incapacity, the worker’s activities, and the details provided in the medical information. The appellant submits that the Arbitrator was required to have regard to the respondent’s own job, which was the reference point for both Dr Vickery and Dr Teoh, rather than the minimum wage.
[47] [2015] NSWWCCPD 16, [60]
The appellant concludes that the Arbitrator’s decision should be set aside, and in lieu a determination made that the appellant is not liable to pay compensation by operation of s 11A(1) of the 1987 Act. In the alternative, the appellant seeks a re-determination of the respondent’s entitlement to weekly compensation, in the event that the appellant’s defence pursuant to s 11A(1) of the 1987 Act fails.

Ground two – the respondent’s submissions

The respondent submits that the Arbitrator’s finding on capacity was consistent with the opinion of Dr Vickery, who opined that the respondent was fit to resume partial pre-injury duties and other duties of a selected nature with less responsibilities. The respondent submits that the Arbitrator’s finding was open to him.

DISCUSSION

Ground one

The error alleged by the appellant under this ground is that the Arbitrator determined that the employer had not discharged its onus in proving that the action in respect of discipline was reasonable.
There is no challenge in this appeal to the Arbitrator’s determination that the respondent’s psychological injury was wholly or predominantly caused by the meeting on 7 February 2018, when the respondent was advised that he was commenced on a formal performance improvement plan and was handed the formal warning letter. There is also no challenge to the Arbitrator’s finding that the appellant’s action was disciplinary action within the meaning of s 11A(1) of the 1987 Act.
The Arbitrator identified the factors that were relevant from the respondent’s perspective, which included:
(a)    the length of the respondent’s service during which his performance had not been in issue;
(b)    the decision by the employer to implement upskilling and coaching was made at a time when the respondent was either absent or had just returned to work after an extended sick leave;
(c)    the email evidence and the performance review in October 2017 indicating a “no rating” were inconsistent with there being an informal improvement plan in place;
(d)    the evidence from Ms Bray that the meetings were not referred to as performance meetings because the respondent may not have attended;
(e)    the evidence that the respondent was unaware that he was on such a plan, and
(f)    the lack of evidence that it had been communicated to the respondent that he was moving from stage to stage of an informal improvement plan which may have consequences in terms of his employment.
The Arbitrator determined that if the appellant had chosen to implement an informal performance improvement plan with such potential consequences, then the respondent ought to have been informed of the nature of the plan and those consequences. The Arbitrator’s view was that the failure to inform the respondent of those matters was procedurally unfair. He considered that such a failure led to the respondent being ambushed at the meeting on 22 January 2018, as he was unaware that it was a final meeting about his performance.
The Arbitrator’s decision that the appellant failed to discharge its onus was a factual determination. In order for the Arbitrator’s decision to be disturbed on appeal, it must be shown that the Arbitrator took into account irrelevant matters, overlooked material facts, gave too little weight to the evidence in deciding the inference to be drawn, or the available opposite inference was so preponderant that, in the views of the appellate court, the decision must be wrong.[48] Those principles are well established, and have been considered and applied frequently in Presidential decisions in the Commission, as well as in other appellate courts.
[48] Whiteley Muir & Zwanenberg Ltd v Kerr (1966) 39 ALJR 505, 506.
The appellant does not cavil with the above fact-finding process other than to submit that they were matters which the Arbitrator should not have included in his reasoning process. In other words, the appellant alleges that the Arbitrator took into account irrelevant matters.
The appellant points to the evidence of Ms Bray, who stated that at the meeting on 22 January 2018, there was a discussion about the informal improvement plan and the respondent sought to have it extended, rather than move onto a formal improvement plan. As part of its submissions, the appellant refers to the uncontested evidence from Ms Bray that at the meeting on 22 January 2018, the respondent sought an extension of the informal improvement plan, and says that this evidence is inconsistent with the respondent’s evidence. It is not. The respondent’s evidence is that he became aware that his performance was under review and that he had been on an informal improvement plan, which was to be replaced by a formal improvement plan. With that awareness, he may well have asked for a one month extension before a formal improvement plane was put in place.
The appellant also submits that the Arbitrator failed to turn his mind to the interests of the appellant. I do not accept that submission. The Arbitrator:
(a)    took great care in weighing the evidence from the respondent against that of the appellant;
(b)    found the manner in which the meeting was conducted on 7 February 2018 was reasonable;
(c)    said that he had no doubt that the respondent was aware that his performance was being monitored, and
(d)    found that it had not been proven that the appellant was required to put in place an informal performance improvement plan before implementing a formal improvement plan.
Those are all examples of how the Arbitrator considered the appellant’s interests.
The appellant maintains that the Arbitrator’s decision that the meeting on 7 February 2018 was reasonable was sufficient to discharge its onus. The appellant contends that the Arbitrator fell into error by considering the meeting on 22 January 2018 and says that, because the injury did not result from the disciplinary “process”, the question of reasonableness can only be assessed in the context of the meeting on 7 February 2018.
I do not accept that submission. It is well established through a long line of authorities that the question of reasonableness requires an objective assessment of the action.[49] As Geraghty CCJ said in Irwin:
“The question of reasonableness is one of fact, weighing all the relevant factors. The test is less demanding than the test of necessity, but more demanding than a test of convenience. The test of ‘reasonableness’ is objective, and must weigh the rights of employees against the objective of the employer. Whether an action is reasonable should be attended, in all the circumstances, by a question of fairness” (my emphasis).
[49] Jeffery v Lintipal Pty Ltd [2008] NSWCA 138 (Jeffery).
The question of reasonableness was also considered by Burke CCJ in Melder v Ausbowl Pty Ltd,[50] where his Honour said:
“The action is not merely its end result. The action is what takes place to achieve that result. In a real sense no action can be divorced from the way in which it is performed. The manner of its doing is part of the action ... What went before or after may be a guide to the reasonableness of the particular action but is not part of it.”[51]
[50] (1997) 15 NSWCCR 454 (Melder).
[51] Melder, 458D.
Both the appellant in its submissions at arbitration and the Arbitrator in his reasons referred to the following passage from Heggie, which helpfully sets out the principles to be applied in assessing the reasonableness of the employer’s conduct:
“(i)     A broad view is to be taken of the expression ‘action with respect to discipline’. It is capable of extending to the entire process involved in disciplinary action, including the course of an investigation.
(ii) Nonetheless, for s 11A(1) to apply, the psychological injury must be wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer.
(iii)     An employer bears the burden of proving that the action with respect to discipline was reasonable.
(iv)    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.
(v)     Where the psychological injury sustained by the worker is wholly or predominantly caused by action with respect to discipline taken by the employer, it is the reasonableness of that action that must be assessed. Thus, for example, if an employee is suspended on full pay and suspension causes the relevant psychological injury, it is the reasonableness of the suspension that must be assessed, not the reasonableness of other disciplinary action taken by the employer that is not causally related to the psychological injury.
(vi)    The assessment of reasonableness should take into account the rights of the employee, but the extent to which these rights are to be given weight in a particular case depends on the circumstances.
(vii)    If an Arbitrator does not apply a wrong test, his or her decision that an action with respect to discipline is or is not reasonable is one of fact.”[52] (emphasis in the original)
[52] Heggie, per Sackville AJA (with Basten and Ward JJA agreeing), [59].

Thus, it is the reasonableness of the action that caused the injury that has to be assessed. That does not mean that the consideration is isolated to what occurred on 7 February 2018. The prior events, including the meeting on 22 January 2018 had a material bearing on and were an integral part of the decision made by the appellant to place the respondent on a formal performance improvement plan and to issue the formal warning. As was observed by Basten JA in Jeffery (with Hodgson JA agreeing), the reasonableness of the action should properly be assessed by reference to the facts giving rise to, in this case, the disciplinary action.[53]
[53] Jeffery, [44].
It is the reasonableness of the disciplinary action taken by the appellant that must be assessed and, in order to make that assessment, the Arbitrator was required to consider the action in the context of what had gone before. That is, the matters that were relevant to the reasonableness of the implementation of the decision.
It was entirely appropriate for the Arbitrator to consider the circumstances from the perspective of the respondent and to look to the train of events that led to the meeting on 7 February 2018.
The Arbitrator did not conclude that there were other ways in which the appellant could have acted that were more reasonable. The Arbitrator measured the question of reasonableness by what the appellant failed to do in order to achieve fairness, the objective identified by Geraghty CCJ in Irwin. The Arbitrator did nothing more than exercise a broad evaluative judgment. Applying the principles in Heggie, such an evaluation cannot be disturbed unless the Arbitrator applied the wrong test, which for the reasons expressed above, he did not.
It follows that ground one of this appeal fails.

Ground two

This ground of the appeal challenges the Arbitrator’s determination that during the second period of entitlement to weekly compensation, the respondent was only fit for part-time work. The appellant further challenges the Arbitrator’s measurement of the respondent’s ability to earn by reference to the minimum wage rate, when it ought to have been calculated by reference to the respondent’s rate of pay. The appellant submits that the Arbitrator also erred by failing to identify a “real” job in accordance with s 32A of the 1987 Act.
The Arbitrator excluded the opinion of Dr Rastogi in respect of incapacity for the same reasons it was excluded in respect of the issue as to causation, and the Arbitrator’s decision in that regard has not been challenged on appeal.
The Arbitrator considered the balance of the medical opinions which comprised:
(a)    Dr Teoh, who did not suggest that the respondent would remain unemployable beyond the first two months;
(b)    Dr Tan, whose opinion was that the respondent was not fit to resume work until all issues were resolved, and
(c)    Dr Vickery, who examined the respondent in May 2018 and opined that the respondent could resume partial pre-injury duties of a selected nature with less responsibility.
The Arbitrator found it difficult to understand the notion that once the issues between the appellant and the respondent were resolved, the respondent would be fit for work. Given the respondent suffered from a continuing psychological condition, that observation was logical.
The appellant made submissions at the arbitration that it could provide suitable duties to the respondent, which was a matter discussed during the conciliation stage. Although the appellant’s counsel said the duties would involve retraining, guidance and coaching, the particular duties were not identified and were not the subject of medical scrutiny as to their suitability.[54]
[54] Transcript of proceedings, Mani v Westpac Banking Corporation [2019] NSWWCC 77.
The appellant’s argument that the Arbitrator ought to have identified a “real job” does not assist the appellant. The Commission has identified in a number of cases that for the purposes of s 32A of the 1987 Act, “suitable employment” encompasses the identification of an actual position that the injured worker could do, rather than a “light duty” job that the employer created that is not a real job.[55] Even if the appellant had provided evidence as to the “suitable duties” that were to be made available, the requirement that the respondent be retrained, coached and guided during that working process indicates that the particular position was not a “real job” against which the respondent’s earning capacity should be measured.
[55] Wollongong Nursing Home Pty Ltd v Dewar [2014] NSWWCCPD 55.
The Arbitrator had little to work with in terms of evidence or submissions about what the respondent could do in suitable work. He did identify suitable work that in his view the respondent could do, that is the work of a clerk at a basic level. That common sense reasoning discloses no error.
It is also clear from the medical evidence that on any view, the respondent was not fit for his pre-injury duties. Section 37 of the 1987 Act provides that, in assessing the respondent’s entitlement to weekly compensation, the amount is calculated by deducting the amount the respondent could earn in suitable employment from eighty per cent of the respondent’s pre-injury earnings. As the respondent was not fit for his former position, it cannot be argued that his ability to earn ought to be calculated on the basis of a figure derived from his pre-injury earnings.
The Arbitrator was entitled to consider that the respondent could only perform work of a basic clerical nature, given Dr Vickery’s view that the duties would be of a select nature and with less responsibility. He was further entitled to accept Dr Vickery’s opinion that the respondent was fit for “partial” pre-injury duties, and to place some restriction on the hours the respondent could work. Dr Teoh also placed a restriction on the respondent’s capacity by requiring all issues to be resolved before a return to work could be instituted. The only other medical evidence was that the respondent had no capacity.
The appellant has not made out error on the part of the Arbitrator in his determination of the respondent’s entitlement to weekly compensation and this ground of appeal also fails.

Conclusion

Neither ground of appeal raised by the appellant succeeds and on that basis the Certificate of Determination issued by the Arbitrator on 22 February 2019 is confirmed.

DECISION

The Certificate of Determination dated 22 February 2019 is confirmed.

Elizabeth Wood

DEPUTY PRESIDENT

9 August 2019