Issue 3: March 2012

In a reserved decision delivered on 24 November 2011, the Arbitrator identified the issues to be whether Mr Kumar had suffered an injury to his right shoulder under s 4 of the 1987 Act, whether employment was a substantial contributing factor to that injury, and whether the proposed surgery was reasonably necessary. He made an award for the respondent.

The issues on appeal were whether the Arbitrator erred in:

(a) considering he had to decide whether Mr Kumar suffered an injury to his right shoulder within the meaning of s 4 of the 1987 Act;

(b) considering that he had to find an injurious event that caused pathology;

(c) failing to properly consider the opinions of Dr Di Mascio and Dr Ireland that there was an aggravation when Mr Kumar was recovering from the back surgery;

(d) saying that there was no reference in the clinical notes of Dr Di Mascio as to the cause of Mr Kumar’s right shoulder symptoms;

(e) failing to consider that the onset of symptoms in May 2010 could constitute a consequential loss, and

(f) determining the matter on the basis of the opinion of Dr Wallace when Dr Wallace did not express an opinion relevant to the proper question in dispute.

Held:  Arbitrator’s decision revoked; matter referred to Registrar for assessment

Additional evidence

1. The original claim was for $3,300. As that amount did not meet the threshold in s 352(3)(a) of the 1998 Act, Mr Kumar sought leave to tender additional evidence on appeal to establish the total cost of the proposed surgery was over $5,000. He conceded that this evidence was available prior to the hearing, but submitted there would be a substantial injustice if the evidence was not admitted because, without it, the appeal could not proceed. The respondent consented to the introduction of the additional evidence [18].

2. It was accepted that, in the exceptional circumstances of the case, the refusal to allow the additional evidence to be tended would result in a substantial injustice to Mr Kumar because he would have no avenue to appeal in circumstances where he had a strongly arguable case that the Arbitrator had erred in his approach and conclusion. The additional evidence was therefore admitted [19].

Section 4 injury

3. By asking if Mr Kumar had suffered a s 4 injury to his right shoulder, the Arbitrator erred in his approach and asked the wrong question. This error affected his approach to the medical evidence and his conclusion. Mr Kumar’s claim was always, as the respondent conceded on appeal, that the right shoulder condition, and the need for surgery, resulted from the accepted back injury. It was not necessary for him to prove that he suffered a s 4 injury to his right shoulder [35].

4. The Commission has considered claims of this kind in several decisions (Cadbury Schweppes Pty Ltd v Davis [2011] NSWWCCPD 4; Vivaldo v Uniting Church in Australia t/as Lucan Care [2010] NSWWCCPD 41; Moon v Conmah Pty Ltd [2009] NSWWCCPD 134; Australian Traineeship System v Turner [2012] NSWWCCPD 4) and has consistently applied the principles in Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452 (Kooragang).Those principles applied in this case [36].

5. The question for the Arbitrator was whether, as a result of his accepted back injury, Mr Kumar developed symptoms in his right shoulder for which it is reasonably necessary that he have the surgery recommended by Dr Ireland. While the Arbitrator referred to Kooragang, and applied the commonsense test of causation, he did so by asking what did commonsense say about “this issue of injury”. There was no issue that Mr Kumar injured his back on 19 March 2009. Nor was there any issue that he had not injured his right shoulder on that day [49].

6. The Arbitrator placed little weight on the evidence of Dr Di Mascio and Dr Ireland because, while they noted a worsening of the right shoulder condition after the back surgery, they did so on a background of an acceptance of an injury to the right shoulder on 19 March 2009. The wrong history recorded by Dr Di Mascio and Dr Ireland was not a valid ground for discounting their evidence. Their incorrect view about the right shoulder symptoms starting with the incident on 19 March 2009 was, in the circumstances of this case and the context of their reports overall, irrelevant to the issue in dispute [50].

7. The doctors also recorded that Mr Kumar’s shoulder symptoms started or he aggravated his “pain complex” while mobilising and transferring following the back surgery [51]–[52].

8. As the Court of Appeal explained in Hancock v East Coast Timber Products Pty Ltd [2011] NSWCA 11; 8 DDCR 399, what is required for satisfactory compliance with the principles governing expert evidence is for the expert’s report to set out “the facts observed, the assumed facts including those garnered from other sources such as the history provided by the appellant, and information from x-rays and other tests” ([85]). Both Dr Di Mascio and Dr Ireland complied with that requirement. An error in one part of a history does not necessarily destroy the probative value of an expert’s report. That is especially so if the balance of the report is consistent with the accepted evidence and supportive of the claim made. The error in the histories recorded by Dr Di Mascio and Dr Ireland had to be read in the context of the whole of their reports and the whole of the evidence [54].

9. The Arbitrator preferred Dr Wallace’s opinion because he felt that the doctor’s history was more in keeping with Mr Kumar’s statement. In this case, the history was not determinative. Dr Wallace’s opinion that Mr Kumar’s activities after the back surgery would not be consistent with the cause of “significant right shoulder pathology” failed to address the correct issue. It was not necessary for Mr Kumar to establish that he has significant pathology in his shoulder, only that the proposed surgery was reasonably necessary as a result of the injury on 19 March 2009. Dr Wallace’s opinion may be relevant to the ultimate question of whether the shoulder surgery is reasonably necessary, but it did not determine the question of whether the right shoulder condition resulted from the back injury. His report was fundamentally flawed [55]–[56].

Held:  Arbitrator’s decision confirmed

1. The employer appealed disputing the Arbitrator’s findings on injury (s 4); that Mr Campbell’s employment was a substantial contributing factor to his injuries (s 9A); that the injury sustained was serious and permanent (s 14(2)); that Mr Campbell’s gross misconduct had not taken him outside the scope of his employment and that there were insufficient reasons provided for this finding.

2. No challenge was made to the Arbitrator’s finding that at the time of injury that which was being done by Mr Campbell was “serious and wilful misconduct and/or gross misconduct” [56].

3. Where reliance is placed upon the provisions of s 14, it must first be established that an injury satisfying s 4 has been sustained and then that s 9A has been proven, before considering s 14(2). Stojkovic v Telford Management Pty Ltd (1998) 16 NSWCCR 165 and Scharrer v The Redrock Co Pty Ltd [2010] NSWCA 365 [46], [48], [49].

Section 4 - Injury arising out of or in the course of employment

4. The words “in the course of” imply a temporal connection with employment. The injury must be sustained “while the worker is engaged in the work which he is employed to do or in something incidental to that work” (Fullager J in Kavanagh v The Commonwealth (1960) 103 CLR 547 at 559) [55].

5. In determining whether an injury arose out of or in the course of employment regard must be had to “the general nature, terms and circumstances of the employment ‘and not merely to the circumstances of the particular occasion out of which the injury to the employee has arisen’” (Hatzimanolis v ANI Corp Ltd (1992) 173 CLR 473 at 484) [58].

6. Having regard to the relevant circumstances (Mr Campbell was in the middle of his shift at the appellant’s premises; that the machine managed by Mr Campbell was in the process of manufacture; that the activity occurred during an idle time whilst awaiting the completion of that manufacture; that his behaviour was not corrected by his supervisor and his supervisor participated in the activity) O’Grady DP found that the injury occurred within the course of Mr Campbell’s employment [61], [62].

7. The appellant argued that the supervisor’s participation was not relevant to Mr Campbell’s involvement in the activity given that Mr Campbell was aware that Mr Kelleher did not have the authority to organise or permit the behaviour and if discovered, their activities could have led to dismissal.  This argument was rejected on appeal and it was noted that the supervisor’s conduct is a circumstance to be taken into account when determining whether Mr Campbell’s conduct took him outside his employment, although participation by the supervisor may not, alone, be determinative of the question [63].

8. The Arbitrator had erred by failing to expressly determine the issue of injury (s 4) and failing to provide reasons to support his apparent conclusion that an injury in terms of the Act had been sustained.

Section 9A

9. Section 9A requires that there is a real and substantial causal connection between the employment concerned and the injury. (Badawi v Nexon Asia Pacific Pty Ltd t/as Commander Australia Pty Ltd [2009] NSWCA 324 and Van Wessem v Entertainment Outlet Pty Ltd [2011] NSWCA 214) [68], [69], [70].

10. Section 9A(2) outlines a non-exhaustive list of matters to be taken into account when determining whether the employment concerned was a substantial contributing factor to the injury. Relevant matters to be considered were that the injury occurred at 2am, mid-shift, at the workplace premises (s 9A(2)(a)); that the injury occurred whilst awaiting a large pipe to be manufactured (s 9A(2)(b)) and that Mr Campbell’s supervisor was present at the time and both authorised and participated in the activity [71] – [74].

11. These factors permitted the conclusion reached by the Arbitrator that Mr Campbell’s employment was a substantial contributing factor to his injury [75]

Section 14(2)

12. Section 14(2) requires that an injury is solely attributable to the serious and wilful misconduct of the worker and that the injury results in serious and permanent disablement.  The Arbitrator erred, in respect to the latter requirement, by concluding that Mr Campbell came within the provisions of s 14(2) because his “injuries were both serious and permanent” without considering the question of disablement [79].

13. Jacobs JA in Peters Ice Cream Pty Ltd v Feeney [1970] 3 NSWLR 125 at 127 noted that ‘disablement’ does not require that “all capacity for employment had gone except for a mere chance of obtaining special employment of an unusual kind” [81].

14. The proper construction and application of s 14(2) was addressed by Burke J in Gregson v L & MR Dimasi Pty Ltd [2000] NSWCC 47; 20 NSWCCR 520 who stated at [78]:

In this matter the question becomes whether Mr Gregson suffers a serious and permanent disablement. Does he have a disability, is it serious, is it permanent, does it impinge adversely upon his capacity to work? If all questions were answered in the affirmative then he would satisfy that requirement. The basic question then presenting is the degree of the applicant’s incapacity and losses before a considered answer to those previous questions is available. [82]

15. O’Grady DP determined, based on the medical evidence available, that Mr Campbell’s injury had resulted in a serious and permanent disablement. He further determined that the Arbitrator’s error in respect of s 14(2) had not affected his decision.

Held:  Arbitrator’s decision revoked, and re-determined

1. An assessment of whether an employer’s actions were reasonable should take into account all relevant circumstances [96].

2. In determining what circumstances are relevant to an assessment of the reasonableness, consideration should be given to what went before or after the action (Melder v Ausbowl Pty Ltd (1997) 15 NSWCCR 454 at 458) and the antecedent relationship of the parties (Pirie v Franklins Ltd [2001] NSWCC 167; 22 NSWCCR 346 at [50]) [97].

3. A determination as to reasonableness is one of fact (Commissioner of Police v Minahan [2003] NSWCA 239) [103]; which weighs all the relevant factors, is objective and addresses questions of fairness (Irwin v Director General of School Education (unreported 18 June 1998)) [107].

4. The respondent argued that they were obliged to take the action they did in order to comply with a Policy Directive. The fact that protocol and guidelines may require and/or authorise certain action be taken by an employer does not, alone, render that action reasonable. Proper exercise of judgment and an assessment of relevant matters must occur before determining whether action in compliance with those protocols is required. And then, any subsequent action must, if a defence is to be made out, be reasonable [125].

5. A number of relevant matters were not taken into account by the respondent when the decision concerning disciplinary action was taken. The Arbitrator failed to take those omissions into account when determining the question of the reasonableness of such action [114]. Those factors are detailed at [116], [119] and [120]. The Arbitrator also erred in failing to consider that the consequences of the respondent’s action experienced by Mr Heggie were relevant to not only the issue of causation, but also to the question of reasonableness [123].

6. O’Grady DP found that the appellant had failed on the balance of probabilities to establish that the action taken by the employer was reasonable [127]. Further, that the Arbitrator erred by overlooking material facts when he determined that the employer’s actions were reasonable [126] and that this error had affected the Arbitrator’s decision [128].

The Arbitrator rejected the employer’s s 11A defence on the ground that the evidence did not establish that the worker’s injury was wholly or predominantly caused by reasonable action taken with respect to discipline. He felt that the onset of her psychological problems could be traced to an incident on 21 March 2009 and her suspension in the wake of that incident, which he felt was grossly unreasonable.

The issues on appeal were that the Arbitrator erred in:

(a) failing to consider the worker’s allegation of discrimination;

(b) finding that the appellant sustained injury;

(c) finding that the appellant’s conduct in relation to the events on 21 March 2009 was unfair;

(d) regarding the event on 21 March 2009 as significant;

(e) concluding that a medical certificate not in evidence certified medical attendance and treatment for psychological problems;

(f) awarding weekly compensation from 19 January 2011 at the maximum rate payable to a worker without dependants;

(g) finding that the worker’s performance deficiencies resulted from psychological injury sustained in the course of her work, and

(h) rejecting the evidence of the appellant’s psychiatrist, Dr Lee.

Held: Arbitrator’s determination confirmed

The worker’s allegations

1. The pleadings and particulars were unsatisfactory. The Application to Resolve a Dispute alleged that the worker’s psychological injury occurred “[a]s a result of ongoing workplace bullying, harassment and unfair treatment”. It did not refer to discrimination. The letter of claim of 4 August 2010 referred to “nature and conditions of employment”, which was meaningless, but added, in the alternative, that the worker pleaded her psychological injuries occurred on dates that she was bullied, intimidated and harassed throughout 2008, 2009, until her eventual termination in July 2010 [92].

2. The worker relied on a WorkCover certificate from her general practitioner, Dr Ye, dated 27 July 2010 which recorded “depression and anxiety due to discrimination at workplace”.

3. The insurer disputed liability in a s 74 notice. One of the issues relevant to the decision to dispute liability was “the factual evidence which fails to corroborate your allegation of discrimination”. As there was no allegation of discrimination in the letter of 4 August 2010, the reference in the s 74 notice to discrimination must have been a reference to Dr Ye’s certificates and handwritten report [93].

4. Applicants for compensation must properly particularise the basis of their claims. The workers pleadings were unsatisfactory. When read with the material from Dr Ye, it is clear that the insurer accepted that at least part of the claim alleged discrimination in the workplace. Whether the pleadings and particulars provided a proper basis for an allegation of sexual discrimination was doubtful but not critical [94].

5. Counsel for the worker made no submission that she had been discriminated against because of her appearance. Counsel for the employer referred to Dr Ye’s notes in which he noted that the worker was homosexual, but noted the words “she is homosexual” were in commas, thus raising a doubt about the meaning to be attributed to them. Appropriately, he took the matter no further.  He said the Arbitrator ought to approach the worker’s evidence with a degree of scepticism, but he made nothing like the submissions Mr Michael made on appeal [104]–[105].

6. The Arbitrator analysed the evidence in detail and, rather than accepting the worker’s complaints at face value, looked for corroboration. Critically, he felt that the incident on 21 March 2009 and its aftermath was the “turning point in the relationship” between the worker and the employer and the “foundations of the applicant’s psychological condition were laid in March 2009”. He found, based on the evidence from the worker, corroborated by Catherine Smith (community manager), that the “overriding main issue” for the worker related to the unfair rostering of work. He described the worker as having become consumed with a sense of grievance regarding the allocation of work to her, which was “a significant contributor to [her] decompensation” [106].

7. Dealing with the allegation of discrimination, the Arbitrator said that the worker “regarded the failure to replace her hours as ‘discrimination’ and as a means of ‘getting back at [her], directly affecting [her] wage’ because she had complained about Mr Hughes”. He noted the evidence about Mr Hughes (coordinator) using the term “dyke”, but was unable to determine if he had done so. He also noted the histories recorded by Dr Ye and Dr Akkerman about the worker being homosexual, but made no specific finding on whether the worker suffered discrimination because she was, or was thought to be, homosexual [107].

8. The Arbitrator’s approach was open to him and, given the evidence and the way the case was presented, perfectly reasonable. Having found that the incident on 21 March 2009 and the rostering issues were of critical importance, and sufficient to support the worker’s claim, it was unnecessary for the Arbitrator to deal further with the sexual discrimination “issue” [108]–[109].

9. The appellant’s arguments on appeal have sought to elevate the alleged sexual discrimination out of context and to run a case that was not presented by its counsel at the arbitration. The Arbitrator dealt with the issues presented and his analysis and conclusions disclose no error [110].

Diagnosis

10. The Arbitrator’s reasoning was not circular, as the appellant alleged. He correctly observed that the worker carried the onus of establishing that she suffered an injury in the course of her employment and that her employment was a substantial contributing factor to that injury [117].

11. While there were other potentially stressful events in the worker’s life in 2009 and 2010, the Arbitrator correctly concluded that there was no suggestion (in the contemporaneous evidence) that her distress had resulted from those events. It was of no consequence that the Arbitrator’s conclusion was expressed before his analysis of Dr Lee’s evidence. What was important was that the Arbitrator carefully considered and analysed the evidence. He gave extensive and valid reasons for rejecting Dr Lee’s evidence [119].

12. The Arbitrator’s statement that Dr Lee’s suggestion that the decline in the worker’s work performance was “possibly due to family pressures” involved “unfounded speculation” was open to him. The evidence referred to by the appellant on appeal did no more than establish there were other stressful events in the worker’s life. There was no persuasive evidence that she suffered any psychological reaction to those events and Ms Parry’s (community manager) email of 5 January 2010 suggested that the worker was “fairly reliable” despite her father’s illness [120].

13. The Arbitrator correctly observed that the period to which Dr Lee referred was “the last 12-15 months”, which, based on Catherine Smith’s statement, took the time back to approximately April 2009, when the events after the incident on 21 March 2009 were still unfolding. The decline in the worker’s performance started after that incident, not after any major domestic upheaval [121].

14. The Arbitrator correctly observed in relation to Dr Lee’s statement that there was no evidence to substantiate that the worker had been unfairly treated, as she alleged, that it was not necessary for the worker to establish she had been unfairly treated [122].

15. The Arbitrator thought it was surprising that Dr Lee had not considered the relevance of the events on and relating to 21 March 2009 as a trigger for the worker’s descent. He believed the significance of this event and the ensuing breakdown in her relationship with the employer’s management, should have been obvious to Dr Lee [123].

16. An examination of the objective chronology of events since March 2009 supported the Arbitrator’s conclusion.  There was no persuasive contemporaneous evidence that family pressures caused the worker’s psychological condition.  At its highest for the appellant, it might have been argued that the worker was a vulnerable personality. That did not advance its case: employers must take their employees as they find them (State Transit Authority of New South Wales v Chemler [2007] NSWCA 249; 5 DDCR 286) [124].

17. Dr Lee dismissed the worker’s report with regard to her symptoms as “unreliable”.  The Arbitrator correctly observed that the employer’s witnesses observed and noted the worker’s symptoms over a substantial period [125].

18. Once the “family pressures” were properly eliminated, Dr Lee failed to adequately explain why the worker’s paranoid personality traits appeared in April 2009. The only plausible explanation was that they appeared as a result of the incident on 21 March 2009 and its aftermath [126].

19. By asking if the worker had been unfairly treated and by failing to consider the effect of the 21 March 2009 incident, Dr Lee’s opinion was fundamentally flawed, and the Arbitrator was right to reject it [128].

The events of March 2009

20. The evidence overwhelmingly supported the Arbitrator’s conclusion that the foundations of the worker’s psychological condition were laid in March 2009. She had suffered no emotional or psychological problems prior to that date. Several of the appellant’s witnesses supported the conclusion that the worker suffered a significant reaction to the March 2009 incident. Ms Parry’s evidence confirmed that Mr Hughes had telephoned the worker after her shift to inquire how she was and that the worker told him that she was “not well” [140].

21. The worker saw Dr Swe in March 2009 because of her psychological problems relating to the 21 March 2009 incident. Though Dr Swe’s certificate was not in evidence, the Arbitrator’s conclusion as to the reason for the worker’s attendance was open on the evidence. That evidence included evidence from Ms Parry that the worker went off sick on a general medical certificate after the communication of 25 March 2009. The letter of 25 March 2009 confirmed that the worker was unable to attend a meeting on that date “due to [her] emotional state following an incident on 21/3/09” [141].

22. The Arbitrator was correct in finding that the appellant’s actions with respect to the 21 March 2009 incident were inappropriate. Given that the appellant suspended the worker, without a hearing, because of an alleged breach of privacy when she merely spoke to Mr Creamer to “get support” in circumstances where she felt the appellant’s procedures were defective, the Arbitrator did not err in describing the appellant’s actions as “heavy handed” [142].

23. In the circumstances, the Arbitrator did not err in concluding that the incident on 21 March 2009, and its aftermath, was significant in the overall history of the matter and onset of the worker’s psychological problems. The chronology of events showed the compelling conclusion was that there was a serious deterioration in the worker’s relationship with the appellant after 21 March 2009. It was open to the Arbitrator to accept the worker’s evidence that, among other things, she had difficulty dealing with alienation and lack of support since the March incident and that she perceived that she had been discriminated against with respect to the allocation of work, which became the “overriding main issue” [143].

24. The worker gave evidence, which the Arbitrator accepted, that she found the incident humiliating and emotionally draining due to the “gang up” mentality of the managers. She also said that she found it “too intimidating” to attend the appellant’s offices for a meeting on 4 June 2009. This evidence and the Arbitrator’s conclusions were consistent with Dr Akkerman’s history that “it started in March 2009” [144].

25. The submission that the Arbitrator drew an incorrect conclusion that the worker was the subject of unreasonable retaliation which constituted an abuse by the appellant of its authority was not supported by any reasoned argument. The reference to unreasonable retaliation by the appellant was a reference to the worker’s suspension after she had complained about the inability of the appellant’s procedures to handle the allegation of sexual assault. That conclusion was open on the evidence. Given the timing of the suspension, the Arbitrator’s conclusion was not only open but was logical and compelling [146].

Award under s 37

26. The parties agreed that the currently weekly wage rate was $381.20. Therefore the Arbitrator erred in awarding compensation at the maximum statutory rate for a worker with no dependants from 19 January 2011 to date and continuing in breach of s 37(2) and that part of the determination was revoked and a new determination was made [154].