CS Energy Limited v Q-COMP [2008] ICQ 2 (2008) 188 QGIG 6; (2008) QIC 57; (2008) ICQ 2

[Extract from Queensland Government Industrial Gazette, Dated 9 May 2008, Vol. 188, No. 2, pages 6-9] INDUSTRIAL COURT OF QUEENSLAND Workers' Compensation and Rehabilitation Act 2003 - s. 561 - appeal against decision of industrial magistrate CS Energy Limited AND Q-COMP (C/2007/65) PRESIDENT HALL 1 May 2008 DECISION By July of 2006, Mr Dharam Vir Gupta (known as David Gupta) had worked for CS Energy Limited (CS Energy) at the Swanbank Power Station for approximately 10 years. He was at the time employed in the People Services Department (the Department). The Department, amongst other things, had responsibility for workplace health and safety. His immediate supervisor was a Mr Maloney who reported to a superintendent who managed the Department, viz., Mr Pennington. The site manager, to whom Mr Pennington and the other three superintendents reported, was Mr James who reported to a corporate general manager in the Brisbane office. With the benefit of hindsight, which is a very great benefit indeed, Mr Gupta was not comfortable with his role within the safety section of the Department. He was primarily occupied in preparing monthly reports about accidents, medical treatment and lost time injuries compared to man hours worked. He considered himself not to have been adequately trained for the role to which he had been transferred in October 2005. Additionally, Mr Gupta considered his duties to be inferior to the financial services duties which he had previously performed. In fairness to Mr Gupta, it was management's view that the tasks which he performed in the safety section did not warrant the wage previously paid to Mr Gupta. He continued to be paid that wage as a "preserved wage". Mr Gupta was aware of that management view and, at the age of 59, was concerned that he would be pushed into retirement so that a younger and less expensive worker might be engaged. Whether Mr Gupta's apprehension was well based was an issue which was not resolved at first instance and which may never be resolved. Shortly after Mr Gupta moved to the Department, the cool season came to an end and the hot season descended upon the power station. Mr Gupta's air conditioner was malfunctioning. Mr Gupta had complained about the problem. A project officer within CS Energy, Mr Kevin Scarlett, was trying to have the problem repaired. He was not entirely successful. On or about Monday 10 October 2005, there was a clash between Mr Gupta and Mr Scarlett. Each gentleman had an entirely different recollection of events. The Industrial Magistrate accepted Mr Scarlett's version that Mr Gupta swore abusively and without provocation and, when Mr Scarlett protested, terminated the telephone call. In March 2006, he became involved in two incidents with a Mr Moore. On 1 March 2006, Mr Gupta approached Mr Moore to obtain some data which Mr Gupta required to prepare his end of month reports. Mr Moore was unable to provide the figures quickly. The transaction degenerated into an incident in which Mr Gupta became abusive to Mr Moore and a recently appointed (trainee) accountant working under Mr Moore's direction. There was a further incident on either 8 March 2006 (Mr Moore's version), or 14 March 2006 (Mr Gupta's version). An exchange about a request by Mr Gupta for Mr Moore to perform additional "safety walkthroughs" at designated areas, degenerated into abuse. As is often the case in such matters, Mr Moore and Mr Gupta had quite different recollections of each of the two incidents. The Industrial Magistrate preferred the version of Mr Moore. Whereas Mr Scarlett had not taken the matter further, Mr Moore complained to management. When Mr Scarlett became aware that Mr Moore had made a complaint, Mr Scarlett made a complaint of the incident of October 2005. The complaints fell into the hands of Mr Pennington. Mr Pennington spoke to each of Mr Scarlett and Mr Moore and then spoke to Mr Gupta. Mr Gupta's response to the complaints was to make complaints of his own about Mr Scarlett and Mr Moore. Mr Pennington came to the conclusion that, because of the fixed attitudes of Messrs Scarlett, Moore and Gupta, mediation would be to no avail and channelled the complaints into the formal grievance procedure. One may well understand why a departmental manager with some knowledge of the personalities involved would come to such a conclusion. However, as the Industrial Magistrate found, it was the policy of CS Energy that informal resolution by mediation and counselling was to be attempted before complaints were permitted to fall into the formal grievance procedures. Doubtless, it is the purpose of such a policy to ensure that busy and distracted departmental managers do not hasten into error. Management decided to outsource investigation of the grievances lodged by Messrs Scarlett, Moore and Gupta. An experienced industrial solicitor was appointed. In the result, the solicitor concluded that the complaints made by Mr Scarlett and by Mr Moore had been made out, whereas the complaints made by Mr Gupta had not been made out. A report including recommendations as to how each of the formal grievances should be dealt with was drafted and provided to management. Mr James, the site manager, concluded that the appropriate course was to issue Mr Gupta with a final warning and, if that outcome was not accepted by Mr Gupta, to terminate Mr Gupta's employment. It is apparent from the transcript and the exhibits at first instance that it was a matter of concern that Mr Gupta's allegations had been found to be false and without basis and to have arisen, not out of a misplaced perception that Mr Gupta has been wronged, but out of an attempt to discredit the validity of the grievances lodged by Mr Scarlett and by Mr Moore. -- 1 of 3 -- 2 Howsoever all of that may be, it is clear that the management of CS Energy used the reports from the chosen solicitor to make decisions entirely adverse to the interests of Mr Gupta in circumstances in which Mr Gupta had had no opportunity to address the findings in the reports and the factual materials on the basis of which they were made, nor the opportunity to address his superiors on the matter of mitigation. Indeed, it is not immediately apparent that it had been brought home to Mr Gupta (who over the ten years of his employment had not received a "first warning") that the process of grievance resolution had transmogrified into a disciplinary process with Mr Gupta as the potential miscreant. On 18 July 2006, CS Energy called a meeting attended by the site manager (Mr James), Mr Gupta's superintendent (Mr Pennington), Mr Gupta and Mr Gupta's chosen union representative (Mr Rod Shaw). Mr James had the conduct of the meeting. At the very outset of the meeting (of about 20 minutes), Mr James informed Mr Gupta that the matters were serious and warranted termination. Mr James then proceeded to read out the conclusions in the three reports. He refused a request to deliver to Mr Gupta a copy of each of the reports and refused a request to make available to Mr Gupta the factual matters upon which the conclusions had been reached. The (unconvincing) explanation tendered to Messrs Gupta and Shaw was that the report contained "confidential information of a personal nature". (In fairness to Mr Gupta, I should acknowledge that it emerged at first instance that, as to the attachments, Mr James gave that explanation in circumstances in which he had not read the attachments himself.) Just when it was that the "compromise" position of an accepted final warning was raised is not clear. At one stage, shortly after Mr Shaw had advanced a proposition that Mr Gupta was being discriminated against on the grounds of race, the meeting adjourned. Whether the meeting adjourned in order to enable the management team to consider a response to that allegation or, as Mr James would have it, adjourned to give Mr Gupta and Mr Shaw the opportunity to discuss matters, remains controversial. However, what is clear, is that when the "compromise position" was raised, it was raised on a "stand and deliver" basis; i.e. on the basis that if Mr Gupta did not accept the final warning (in writing) his employment would be terminated. Ultimately, the meeting came to an end. Mr Gupta was allowed to go away to consider his position. He did not return. Over the next several days, Mr Gupta decompensated. On 25 September 2006, Mr Gupta lodged an application for compensation dated 14 September 2006. The nature of the injury was given as "psychological and emotional injuries and with major depression". By a letter dated 19 February 2007, WorkCover informed CS Energy that the insurer was satisfied that Mr Gupta had sustained a personal injury, viz., a psychological condition diagnosed as "Major Depressive Disorder Sing Episode, Severe Without Psychotic Features With Melancholic Features". CS Energy was also informed that the insurer was satisfied that Mr Gupta's employment, and in particular the meeting of 18 July 2006, was a significant contributing factor to the injury. The application for compensation was accepted. By an application dated 27 February 2007, CS Energy sought a Statutory Review of WorkCover's decision. By a letter dated 12 April 2007, Q-COMP informed CS Energy that WorkCover's decision had been confirmed. As it was entitled to do, CS Energy appealed to the Industrial Magistrate at Brisbane. By a decision delivered at Brisbane on 20 November 2007 the Industrial Magistrate varied the decision of Q-COMP to the extent of finding that the injury was an injury within s. 32(3)(b) of the Workers' Compensation and Rehabilitation Act 2003 (the Act), rather than s. 32(1) of that Act, but otherwise confirmed the decision of Q-COMP. CS Energy now appeals to this Court. On the medical evidence, the Industrial Magistrate's analysis that on or about 18 July 2006, Mr Gupta suffered an aggravation of an underlying condition seems to me to be entirely correct. The witnesses were Dr Vanessa Johnson (the treating psychiatrist) and a Ms Lynda Troy (a psychologist from whom WorkCover had sought an opinion). The experts were ad idem that there were some symptoms before the meeting of 18 July 2006 and as far back as October of 2005. However, to quote Dr Johnson, there was a "marked deterioration in Mr Gupta's mental state following this meeting.". The critical issue both at first instance and on this Appeal was whether the injury within s. 32(3)(b) is withdrawn from the statutory definition of "injury" by the operation of s. 32(5) of the Act. The case made by Mr Gupta both at first instance and on the Appeal was that the decisions taken by the management of CS Energy after receipt of the industrial solicitor's reports and recommendations could not be characterised as reasonable management action and that, in any event, the decisions taken prior to the meeting of 18 July 2006, were not (at that meeting) implemented in a "reasonable way". Notwithstanding the criticisms made by Counsel for the Appellant, I consider the emphasis on the meeting of 18 July 2006 to be entirely justified. A s. 32(3)(b) "injury" by way of "aggravation" is "an injury only to the extent of the effects of the aggravation", s. 32(4). In a comparable legislative setting, it has been held by the Court of Appeal of New South Wales in Murray v Shillingsworth (2006) 68 NSWLR 451, that it follows that in working out whether the employment was "a substantial contributing factor" one has to focus upon the aggravation and not upon the underlying condition which should not be permitted to dilute the impact of the employment upon the aggravation. By parity of reasoning, it seems to me that in the application of s. 32(5) to an "injury" by way of aggravation, one should put to one side whether the underlying condition arose out of reasonable management action taken in a reasonable way and should concentrate upon whether the aggravation arose out of reasonable management action taken in a reasonable way. It is not, of course, incompatible with that proposition to insist that in the evaluation of whether a particular exercise in management action or the way in which it has been executed is "reasonable", regard must be had to the full history of management's dealings with the particular employee. Here, the Industrial Magistrate followed that course. In particular, the Industrial Magistrate reviewed Mr Pennington's -- 2 of 3 -- 3 conclusion that the fixed positions of the parties precluded resorting to mediation and counselling. Her Honour, who had the advantage of access to fully articulated statements of the position of each of Mr Scarlett and Mr Moore concluded that there was every prospect of mediation and counselling succeeding, and concluded that the failure to observe company policy was an opportunity not taken. It was against that background that Her Honour (rightly) evaluated the subsequent drift of events. I acknowledge the point taken by Counsel for the Appellant that Mr Gupta, who had some training in CS Energy's grievance procedures, pressed for the matters to be dealt with by way of the grievance procedures. Put aside that CS Energy owed an obligation of reasonable management action to each of Messrs Scarlett and Moore - and at the time, that mediation and counselling were put aside no one was aware of where the grievance process would lead - it is not invariably reasonable management action to grant an employee that which the employee seeks. I accept the criticism made by the Appellant of para [48] in the Industrial Magistrate's reasons for decision. Paragraph [48] is in the following terms: "48. President Hall revisited Kehl in Delaney v Q-COMP Review Unit [2005] QIC 11 (2 March 2005); 178 QGIG 197. He concluded that while considerations of fairness will always be relevant, there is no advantage to be had by seeking to improve on the statutory test of 'reasonableness'. Management should behalf with 'fairness' when dealing with a person known to have 'decompensated in the face of workplace pressure on a previous occasion'. Whilst Gupta had no diagnosed psychiatric disorder, his conduct on the two occasions the subject of the complaints was similar, being inappropriate abuse to work colleagues for relatively minor workplace inconveniences, the first a malfunctioning air conditioner, and the second, a delay in responding to his request for data to input in a computer application.". Each of WorkCover Queensland v Kehl (2002) 170 QGIG 93 and Delaney v Q-COMP Review Unit (2005) 178 QGIG 197, dealt with a situation in which an employer taking management action was fixed with knowledge of an earlier decompensation. Here, there was no evidence that the management of CS Energy had actual knowledge that by the meeting of 18 July 2006, Mr Gupta was already suffering the onset of a psychiatric/psychological disorder. Further, to conclude that Messrs James and Pennington and/or the investigating solicitor ought to have been aware that Mr Gupta was displaying the early symptoms of the onset of the disorder seems to me to attribute extraordinary perspicacity to those gentlemen. I do, however, accept the Industrial Magistrate's conclusion that by 18 July 2006, Mr Gupta's conduct had become "uncharacteristic" (para [47] of the Industrial Magistrate's reasons) to the point of which it must have become apparent to his work colleagues (or some of them) that Mr Gupta was "struggling" (para [20] of the Industrial Magistrate's decision). But none of that matters very much. Fundamentally, it is the denial of natural justice in the taking of the disciplinary decisions and the conduct of the meeting of 18 July 2006 as an "operation shock and awe" exercise which (rightly) led the Industrial Magistrate to the conclusion that s. 32(5) had no application. I dismiss the Appeal. I reserve all questions as to costs. Dated 1 May 2008. D.R. HALL, President. Released: 1 May 2008 Appearances: Mr P. Rashleigh, instructed by Mr J. McPherson of CLS Lawyers, for the Appellant. Mr C.J. Murdoch, directly instructed for the Respondent. Government Printer, Queensland The State of Queensland 2008. -- 3 of 3 --