Lenora Ann Peary v Australian Hearing [2009] AIRC 152; (18 February 2009)

Note: An appeal pursuant to s.120 (C2009/2329) was lodged against this decision.

[2009] AIRC 152

Workplace Relations Act 1996

s.643 - Application for relief re (Harsh, Unjust or Unreasonable) termination of employment

Jursdiction - resignation - O'Meara applied to s.642(3) - employer conduct considered in context of an employee with known medical condition

[1] Lenora Peary made an application pursuant to s.643 of the Workplace Relations Act 1996 (the Act) on the grounds that the termination of her employment as Hearing Centre Supervisor (previously known as Office Manager) with Australian Hearing Services (Australian Hearing) at its Lismore Office was harsh, unjust or unreasonable.

[2] Australian Hearing has sought dismissal of the application for want of jurisdiction on the grounds that Ms Peary had resigned her employment. Given that it was not disputed that Ms Peary resigned her employment, pursuant to s.642(4) of the Act, [1] the onus falls to her to prove that she was forced to resign because of conduct, or a course of conduct engaged in, by Australian Hearing.[2]

[3] Australian Hearing is a federal authority established under the Australian Hearing Services Act 1991. The Commission was advised that such legislation was not relevant to these proceedings. [3] Ms Peary was employed under the Australian Hearing Collective Agreement 2006 (the Agreement).

[4] The Agreement relevantly contains Part 9, which deals with Discipline. Clause 9 therein refers to Misconduct and includes 9.1 (Process) and 9.2 (Disciplinary Action), which relevantly provide:

"9.1.1 If an employee is believed to have committed misconduct they will be informed in writing of particulars by Australian Hearing and given an opportunity to respond. The response will be in writing and must be made within a reasonable time which is set by Australian Hearing having regard to the circumstances and which provides the employee with sufficient time to make their response. …

9.2.1 After considering all the information reasonably available on the matter and Australian Hearing determines that misconduct has occurred, Australian Hearing may, having regard to the degree of misconduct:

(c) Issue a direction to perform alternative duties, either on a permanent or temporary basis which may be at a lower classification and rate of pay;

[5] Whilst clause 7.15 (Extended periods of sick leave - Return to Work Assistance) was not referred to directly in these proceedings, return to work plans were. The Agreement provides:

"7.15.1 The parties to this Agreement recognise the value to both employee and Australian Hearing of appropriate and co-operative arrangements that provide for the early return to work and rehabilitation of injured or unfit employees.

7.15.2 Where it is clear that an employee will be absent from work on sick leave for more than two weeks, or that an employee's health may be affecting their work performance, Australian Hearing will assess the need for and, where appropriate, provide return to work assistance to facilitate the employee's recovery and return to work. For the purposes of this assessment, Australian Hearing in consultation with the employee may arrange for the employee to undergo a medical examination by a medical practitioner nominated by Australian Hearing. The cost of attendance shall be borne by Australian Hearing.

7.15.3 Where appropriate, an approved rehabilitation service provider will be engaged to develop, in conjunction with an employee, a formal Return to Work program at Australian Hearing expense. To achieve the mutual goals of the program, employees will be expected to co-operate with all reasonable attempts by Australian Hearing to achieve a return to work."

[6] Also, whilst Part 8 (Workplace Performance) of the Agreement was not directly referred to in the proceedings, the evidence touched on the performance management of Ms Peary. Clause 8.1 of the Agreement provides for a Australian Hearing Performance Development System (PDS) in acknowledgement of the importance of having specific, job-defined performance objectives for every role in Australian Hearing. The PDS includes staff and career development and five levels of an Overall Performance Rating which include:

No increment awarded. Action has been initiated under the formal performance improvement procedure in clause 8.2.4, with improvement goals to be met within a specified timeframe.

No increment awarded. A development/improvement plan will be implemented and increment paid only on achievement of specified improvements. Failure to meet improvement goals within an agreed timeframe will initiate action under the formal performance improvement procedure in clause 8.2.4.

[7] Clause 8.1.4 provides that the PDS' primary purpose is to encourage success and that:

'Consistent with this, PDS will not be used for disciplinary purposes.'

[8] Clause 8.1.5 provides that employees "will receive training to attain the appropriate level of competency, skill and knowledge to allow them to upskill or multiskill. These opportunities will be identified and agreed in consultation with their manager and reflected in the development plan resulting from the individual's PDS Annual Plan. This will assist in improving the employee's individual performance, skills and knowledge to a competent level and improving the organisational effectiveness of Australian Hearing."

[9] Clause 8.2 of the Agreement deals with poor or unsatisfactory performance. It states:

"8.2.1 If an individual's work performance is unsatisfactory, Australian Hearing will attempt to resolve the problem through procedures that:

(a) Protect the interests of Australian Hearing and its employees;

(c) Ensure the employee is aware of performance expectations;

(e) Aim to restore performance to an acceptable level.

8.2.2 For the purposes of this clause, 'unsatisfactory' is defined as work performance below the general standard reasonably expected by Australian Hearing for the classification level at which the employee is employed.

8.2.3 Discussion between an employee and their supervisor will occur as and when issues arise which involve poor performance. Appropriate plans and/or action, to be developed in conjunction with the employee, will be put into place to overcome identified problems.

8.2.4 The procedure for handling unsatisfactory performance will consist of the following steps:

Specific counselling of an employee by their supervisor shall occur when an issue already identified has not been resolved and is of a nature that warrants counselling.

An employee may seek the assistance of an employee representative if they wish to do so.

The employee will be given a reasonable period of time that is sufficient for the employee to overcome any problems identified.

A record of the counselling and of plans for rectification of any performance problems will be kept.

Where the issue has not been resolved at the previous step in accordance with the plans established, a first and final written warning may be issued by the manager which:

a) Gives a clear statement of expectations in terms of duties, responsibilities and performance levels,

b) Details the problems which have not been rectified in accordance with the previous counselling,

c) Confirms the standard required to achieve a satisfactory level of work performance,

d) Specifies a reasonable time frame for the employee to reach and sustain the required standard of work performance, and

e) Sets out the likely consequences if the employee does not reach and sustain the required standard of work performance.

When Australian Hearing has exhausted the process of counselling and work performance management and not achieved the desire outcome, the action taken, in normal circumstances, will be that identified as part of the final warning and may include, but is not limited to, one or more of the following:

a) Deferral of an increment for a specified period of time,

b) Reduction in level until performance is considered satisfactory,

[10] Ms Peary (who represented herself) gave evidence. She presented as a lucid and competent individual who presented her case logically and reasonably effectively. I found her evidence to be given openly and honestly. There were, however, elements of her evidence that were somewhat subjective and I have paid regard to that in deciding the evidence on which I will rely.

[11] Australian Hearing was represented by counsel and the following gave evidence on its behalf:

• John Eakin, Area Manager, Brisbane and Tweed Heads from September 2008. Previously he was:

• Acting Regional Manager, NSW - February 2008 to June 2008, during which he took 4 weeks leave in April; and

• Acting Area Manager Brisbane and Lismore - July 2008 - August 2008).

• (Prior to 1 June 2008 the title of Area Manager was known as District Manager.)

• Laurena Graham, who took over from Mr Eakin as Area Manager for Lismore, with her first visit to Lismore occurring on 27August 2008. Ms Graham referred to her occupation as an audiologist.

[12] Although they did not give oral evidence there are a number of other persons who were referred to during the proceedings. As they are referred to in this decision, for ease of reference, I will list them in alphabetical order:

• Andrews, Dr Olivia, Ms Peary's medical practitioner, Goonellabah Medical Centre

• Binns, Dr Andrew, Ms Peary's medical practitioner, Goonellabah Medical Centre, who took over from Dr Andrews after she left Lismore

• Charleston, Lynne a private psychologist. She was initially consulted by Ms Peary under Australian Hearing's Employee Assistance program and subsequently engaged directly by Ms Peary

• Douglas, Tammy, Human Resources, People and Performance, Australian Hearing

• Doyle, Jessica, OH&S Advisor, People and Performance Team, Australian Hearing

• Essery, Anna, Customer Service Officer (CSO) at Australian Hearing's Lismore Office who reported to Ms Peary as Office Manager. As a consequence of Ms Peary's temporary placement on CSO duties at Ballina, Ms Essery commenced acting as Office Manager, Lismore.

• Feldt, Stephanie, Technician, Australian Hearing, Lismore

• Fraumano, Jenny, Director, Jenny Fraumano and Associates, Industrial Relations and Change Leadership Solutions, which provides services to Australian Hearing

• Harrison, Kylie, Senior Consultant Psychologist, Davidson Trahaire Corpsych (DTC), Sydney, a national Corporate Psychology and Human Resources consulting firm engaged by Australian Hearing

• Johnson, Monica, of Catalyst (the Commission was not informed of her details or those of Catalyst)

• Mavrias, Gina, Executive Manager Operations, Australian Hearing

• Perry, Louise, Executive Manager People and Performance, Australian Hearing

• Shears, Rebecca, Branch Manager/Rehabilitation Consultant, Advanced Personnel Management (APM), a consultant occupational rehabilitation service to Australian Hearing.

• Thompson, Catharina, Audiometrist, Australian Hearing, Lismore. After Ms Peary was relieved of her role of Acting District Manager for Lismore, Ms Thompson acted in the role (as Ms Peary's direct supervisor) until Mr Eakin returned to the position around the end of June 2008. As one of the clinical staff at Lismore Ms Thompson reported to the District Manager and not the Lismore Office Manager.

• Wilmot, Dr Thomas, the consulting psychiatrist who on 21 August 2008 sent a report on Ms Peary to Comcare.

[13] After working as a Customer Service Officer (CSO), Lismore, in May 2006 Ms Peary was promoted to the position of Office Manager, Lismore - a position that was responsible for the four administrative staff of that office. [4] The office manager and the three clinical staff[5] reported to the District Manager. (At some stage the position of Office Manager became titled Hearing Centre Supervisor - but during these proceedings it was referred to as Office Manager.)

[14] In the past, Ms Peary had suffered from depression as a result of irritable bowel syndrome. [6] However according to her evidence (which was not challenged), in early 2008 she was long over it and 'for the last 18 months I'd been feeling pretty great, and it wasn't an issue. I was not on medication.'[7]

[15] In late January 2008, after the District Manager, Mr Eakin, became Acting Regional Manager, he asked Ms Peary to be the Acting District Manager for a period of 5 months, in addition to performing her usual duties as Office Manager.

[16] However after one week, Mr Eakin advised her that she was no longer required to perform the higher duties. This followed his finding that she had discussed confidential information relating to the business and site locations during a conversation with a former employee. He considered that her breach of confidentiality showed that she did not have the necessary judgement and skills required for the higher role. [8]

[17] It is curious that Australian Hearing subsequently advised Comcare that Ms Peary had provided the information to a person who was working with a competitor [9] - which would seem to represent a much more serious breach of confidentiality. However at the hearing, the Commission was advised by Mr Eakin that the person to whom Ms Peary had provided the information was not a competitor.[10]

[18] Also, it is strange that the Commission was provided with two versions of a letter to Ms Peary from Mr Eakin:

(a) One (which Australian Hearing provided to Comcare some time later) was dated 5 February 2008 [11] and gave the reason for the decision as the conversation with the former employee.

(b) The other (which was provided to Ms Peary at the time) was dated 27 February 2008, gave no reason for the decision and stated that the decision to remove her from higher duties was 'discussed and agreed'.

[19] There was no evidence to suggest that the investigation or action to remove Ms Peary from the higher duties was taken in accordance with the disciplinary provisions of clause 9 of the Agreement. However during their discussions, Mr Eakin did advise Ms Peary of the seriousness of what she'd done and that he was surprised that HR (People and Performance) hadn't gotten involved and it wouldn't have surprised him if 'people were dismissed over something like this'. [12]

[20] Ms Peary never agreed with what occurred as:

(a) she did not consider the information (which she believed involved her discussing proposed extended hours for visiting services at Ballina and Australian Hearing's plans to employ an additional clinician) to be a serious breach of confidentiality; and

(b) she considered the way the allegation (which she believed had been reported by the clinician who had overheard the conversation, Catharina Thompson) was investigated to be unjust.

[21] Ms Peary experienced difficulty in accepting what had occurred and took a week's sick leave with depression. [13]

[22] Sometime later, in a June 2008 application for workers compensation to Comcare, Ms Peary stated that 4 February 2008 was when she first noticed her condition (which Comcare was to accept as 'adjustment reaction with depressive reaction'). [14]

[23] Ms Thompson was then asked to act in the higher role of District Manager. As Office Manager, Ms Peary then reported to Ms Thompson. Unlike the previous arrangement with Ms Peary, Ms Thompson was released from her normal duties and acted in the higher position on a full-time basis.

[24] Subsequently Ms Peary commenced having difficulties with Ms Thompson and a CSO, Anna Essery, who reported to Ms Peary. Ms Peary's evidence was that Ms Thompson undermined her authority. Ms Essery bypassed her by going directly to Ms Thompson and became aggressive towards her. Ms Peary expressed her concerns about Ms Essery's behaviour to Ms Thompson on almost a daily basis.

[25] Because Mr Eakin considered that the Lismore team was having difficulties in communication with each other (a problem which he identified in late 2007) he arranged for HR to become involved. Initial meetings were held with individuals and a team workshop was conducted on 26 March 2008.

[26] At the end of the exercise Mr Eakin met with the HR team who told him that Ms Peary had a long history of depression - which was the first time he heard about it. [15] (In these proceedings there was no evidence from a medial practitioner that this was, in fact, the case.)

[27] During her meeting with Ms Thompson on 28 March 2008, Ms Peary requested that Ms Thompson call a meeting with her and Ms Essery to resolve Ms Peary's concerns about Ms Essery's behaviour towards her. However Ms Thompson did not call a meeting. This lead to Ms Peary consulting a psychologist from Australian Hearing's Employment Assistance Program (EAP) and Ms Peary consulted Dr Andrews, her general practitioner, who gave her a second week off because of depression in early April. [16]

[28] Unbeknown to Ms Peary, Ms Thompson complained to Mr Eakin about Ms Peary to the extent that she provided him with 28 bullet points about things which had occurred prior to 28 March 2008. [17] It was not explained why Ms Thompson did this, given that clause 8.2.3 of the Agreement provides that discussion between an employee and their supervisor will occur as and when issues arise that involve poor performance.

[29] Mr Eakin took no action to seek Ms Peary's comments on Ms Thompson's issues with her. [18]

[30] On 28 March 2008 Mr Eakin emailed Ms Tammy Douglas, Human Resources, People and Performance and referred to difficulties that Ms Thompson told him she was having with Ms Peary and stated his belief that Ms Peary's behaviour was disruptive to the Lismore office and that HR should have a further meeting with her. [19]

[31] Mr Eakin's evidence was that prior to that time he had been mentoring Ms Thompson about how to deal with Ms Peary and the sorts of behaviours that he included in his email to HR. [20] I found Mr Eakin's oral evidence that at no stage did Ms Thompson say that Ms Peary was the cause of the problems at Lismore[21] less than convincing.

[32] Ms Thompson's 28 points were not made known to Ms Peary prior to these Commission proceedings. [22]

[33] Under cross-examination Ms Peary stated that she thought the points were twists of the truth. She didn't doubt some of the things actually happened but not in the way Ms Thompson suggested. [23] In her evidence in chief Ms Peary referred, as an example, to one of Ms Thompson's points which was that when Ms Peary was asked to participate in a fortnightly lunch 'she claimed that she does not eat Asian food, yet she organised the Christmas function in 2006 at her favourite Chinese restaurant in Lismore.' Ms Peary's evidence was that she said that she couldn't eat it that day because her stomach was upset over the stress of everything.[24]

[34] The evidence did not satisfactorily explain why Mr Eakin failed to address his concerns about Ms Peary's performance directly with her (given the provisions of clause 8.2 of the Agreement) in addition to seeking HR's involvement. Although it seemed that Mr Eakin was escalating the matter by asking HR to become further involved, in his email to Ms Douglass Mr Eakin stated that he had not escalated the matter 'as I believe it is an ongoing issue that is already being dealt with'.

[35] It can reasonably be inferred that unbeknown to Ms Peary, the 28 points and Mr Eakin's opinion about her disruptive behaviour were taken into account in their further dealings with Ms Peary.

[36] Mr Eakin could not recall if Ms Thompson had ever mentioned that Ms Peary was having difficulty with Ms Essery, although he was sure she did. [25] He could not recall if Ms Thompson ever suggested mediation between Ms Peary and Ms Essery to try and resolve the problem between them and I find that no mediation was arranged.[26]

[37] It seems that almost immediately following his email to Ms Douglass, Mr Eakin went on four weeks leave [27] and Ms Jessica Doyle the OH&S Advisor, People and Performance contacted Ms Peary to offer assistance.[28] Ms Peary met with Ms Doyle on several occasions and discussed her concerns but Ms Doyle did not assist her in any way in managing her role.[29] Her emotionally-charged view was that:

'I continued to suffer depression and cried most days, as I was being bullied, demoralised, harassed and targeted. Australian Hearing did nothing to acknowledge my situation or help to improve my circumstances, they only aggravated it. If I had a broken leg they would have accommodated me in any which way possible, but I suffered from an illness I felt no-one understood. I thought that if I walked around with a bandage on my head that it would make others realise and be more aware. I received no assistance, help, compassion or understanding, I only received bad treatment, blame and punishment.' [30]

[38] On 11 April 2008 Australian Hearing engaged Ms Rebecca Shears, a Branch Manager/Rehabilitation Consultant with Advanced Personnel Management (APM), a consultant occupational rehabilitation service, to provide an assessment report to assist Ms Peary manage effectively in the workplace with depression. Ms Peary actively participated in the assessment by attending an interview with Ms Shears on 21 April 2008 (upon her return from a week's annual leave). Ms Shears also met with Ms Thompson to discuss 'current issues in the workplace.' [31]

[39] That assessment had not been completed when, on 2 May 2008 Ms Thompson emailed Mr Eakin an official complaint from Ms Essery about Ms Peary which referred to 13 incidents (that occurred during April 2008). [32]

[40] Ms Thompson had not sought to resolve these issues at the local level between Ms Essery and Ms Peary before forwarding the formal complaint. [33] It was not explained to the Commission why this did not occur or why the two-way breakdown between Ms Peary and Ms Essery was not regarded as a performance issue and dealt with accordingly. The Commission was left wondering if this had anything to do with Ms Thompson's own dissatisfaction with Ms Peary, as expressed in her earlier 28 points.

[41] Mr Eakin decided to deal with Ms Essery's complaints pursuant to Part 9 (Discipline) of the Agreement. [34]

[42] In his evidence Mr Eakin advised that Australian Hearing investigates all complaints lodged. [35] That may well be the case. However in this instance it was not simply a matter of Australian Hearing asking Ms Peary to respond to Ms Essery's complaints on which Australian Hearing held no view either way. Rather, clause 9.1.1 of the Agreement only operates in circumstances where: 'If an employee is believed to have committed misconduct…' (Emphasis added)

[43] Therefore it seems that in dealing with the matter in the way it did Australian Hearing had come to that belief [36] (i.e., that Ms Peary had committed misconduct) without first alerting Ms Peary to the complaints or discussing the issues with her.

[44] Prior to these Commission proceedings, Ms Peary had not been provided with Ms Essery's actual complaints which made her feel 'invisible and insignificant'. Her document covered two and a half pages and included detail such as: 'Lenora was rude to my mother. My mother knows Lenora quiet well and mum greeted her when she was shopping and Lenora grunted at her and stuck her head in the air,' which, at the least, assists explain the context in which the complaints were made.

[45] The complaints for which Australian Hearing believed that Ms Peary had committed misconduct were contained in a letter dated 5 May 2008 [37] from someone for Ms Gina Mavrias, Executive Manager Operations to Ms Peary advising her that the complaints were being investigated pursuant to Part 9 (Discipline).

[46] The complaints, which were characterised in the letter as 'inappropriate behaviour', not as Mr Eakin characterised in his written evidence as 'Lenora victimising Anna in the workplace', [38] were in relation to the following incidents:[39]

You approached Anna about the spelling of the name Irene. It is alleged that your manner in questioning Anna was inappropriate and humiliated her in front of Catharina and [name].

1. You took aids off Anna's desk. Anna told you she was working on the aids to return for credit and you responded saying you're doing it. Anna alleges that the manner in which you spoke to her was intimidating.

2. In three separate incidents, Anna asked you to show her how to transfer a client file in from another provider; details about a phone number; and requested you to assist [name] to do claiming for a client whilst Anna was counting money. Anna alleges that in all three incidents, you dismissed her by ignoring her requests.

Anna alleges that she observed you gossiping about her with [name] and that when you saw Anna, you continued in a whispering voice.

1. Anna asked you about the key to the store room and you replied that you had spoken to Catherina already so don't worry. Anna alleges that the manner in which you spoke to her was dismissive.

2. Anna alleges that you didn't acknowledge her when she greeted you after returning from doing a screening. Anna then states she asked you about a message she gave you in the morning and with that you shrugged your shoulders. Again, Anna alleges that you behaved in a dismissive behaviour.

Anna alleges that you ignored her when she greeted you in the morning. Shortly after, Anna states you questioned her in a rude tone as to why she was working early.

Anna has reported that she perceives your approach and tone of voice to be dismissive, intimidating and rude and that this behaviour has caused her distress."

[47] Mr Peary responded in writing on 12 May 2008 and concluded by stating that she found 'it very disheartening that I have to defend myself against such unfair and unreasonable allegations. I hope that you can see that they are unfounded and I welcome the opportunity to discuss this issue further and bring it to a satisfactory resolution.' [40]

[48] Also on 12 May 2008, Ms Lynne Charleston, the EAP psychologist who Ms Peary had consulted on three occasions responded to a request from Ms Shears who had been engaged by Australian Hearing (refer to paragraph 38 above). Her report [41] included the opinion that Ms Peary:

'…displays a very passive style of relating. She experiences difficulty with situations that require conflict management, and with people who have an aggressive style of relating. It was on this basis that she requested counselling.'

[49] Ms Charleston's report went on to make a number of recommendations regarding the clarification of roles, assertiveness and conflict resolution training for all staff, and for Ms Peary to receive mentoring to assist her manage difficult situations and aggressive behaviour of staff. Also, that:

'Staff are afforded natural justice in that complaints are discussed with respect and in private with the person and that person be afforded an opportunity to respond. Complaints are not held and then delivered in a bundle.'

[50] Ms Charleston's report contained nothing to suggest that Ms Peary wanted or needed to be removed from her position or her headquarters on a temporary basis.

[51] On 12 May 2008 Ms Shears submitted her assessment report to Ms Doyle. The report [42] purported to include information Ms Shears had obtained during a consultation with Ms Peary and from Ms Charleston and Dr Andrews and went on to propose certain steps. (I will come to these shortly.)

[52] On 20 May 2008, Mr Eakin (and Ms Jenny Fraumano from an external firm which specialises in industrial relations and change leadership solutions) held individual interviews with Ms Essery, Ms Thompson and the staff who reported to Ms Peary.

[53] In his evidence Mr Eakin stated that all staff interviewed had witnessed Ms Peary's behaviour towards Ms Essery and supported Ms Essery's version of events. Therefore he preferred Ms Essery's account over Ms Peary's recurring themes of: 'I'm not like that' and 'I've done nothing wrong.' He concluded that Ms Peary had 'no insight into her behaviour.' [43]

[54] During the meeting [44] Mr Eakin advised Ms Peary of advice he had received from her general practitioner (which, it seems, was what Ms Shears had said in her report about what Dr Andrews had said to her). He explored certain options with her. Ms Peary was given time off to review correspondence that Mr Eakin intended to send her confirming what was discussed.[45]

[55] Mr Eakin wrote to Ms Peary in a letter dated 26 May 2008 [46] which stated:

"I refer to our meeting on the 20th May with myself and Jenny Fraumano representing Australian Hearing. You elected not to have a representative present at the meeting.

The purpose of the meeting was to discuss allegations of misconduct made to you in correspondence dated 2nd May 2008. As you were advised interviews with the staff at Lismore largely supported the allegation made by Anna against you.

Lenora based on your response to the allegations and the considerations of the investigations and interviews with other staff we find that the complaints have been substantiated."

[56] Considering that a version of Ms Essery's complaints was investigated under Part 9 (Discipline) of the Agreement, I have inferred that the expression 'the complaints have been substantiated' is the equivalent of a determination by Australian Hearing that misconduct has occurred, as prescribed by clause 9.2.1 of the Agreement.

"We have also given consideration to the recommendations from the rehabilitation consultant and the recommendations of your medical practitioner and psychologist.

As discussed during our meeting on the 20th May 2008 your rehabilitation consultant has recommended you be given an extended break from confrontational situations and from the need for you to manage the performance of other staff. As you would be aware the management of staff is a primary function of the Office Manager (OM) position. You confirmed to us that you clearly understood the role and responsibility of the Office Manager position.

Interviews with the staff at Lismore, including yourself and Anna, have made it clear that it is not possible for yourself and Anna to work in the same office at this time without creating stress and confrontational situations. We are unable to comply with the recommendations of your rehabilitation consultant if we allow you to continue to work in the Lismore office at this time." (Emphasis added)

[58] When the letter referred to 'your rehabilitation consultant,' it was, of course, referring to Ms Shears of APM who had been engaged to report to Australian Hearing. Neither Ms Shears nor APM purported to represent Ms Peary.

[59] It seems that when the letter referred to 'the recommendations from the rehabilitation consultant and the recommendations of your medical practitioner and psychologist', what in fact was being referred to was what Ms Shears report of 12 May 2008 stated those persons had indicated to her (refer to paragraph 51 above).

[60] Whilst Australian Hearing may have given consideration to the contents of Ms Shears' report in formulating its options, it was not until Ms Peary was in the process of being cross-examined in these proceedings that she first saw the report.

[61] That is, at the time of her interview on 20 May 2008 or in considering Mr Eakin's letter dated 26 May 2008 she had no opportunity to comment on or challenge any aspect of the contents of the report upon which Australian Hearing sought to justify (at least in part) her removal from her position at the Lismore Office. [47]

[62] Australian Hearing did not submit that Ms Shears' report was obtained pursuant to clause 7.15 of the Agreement. If they had it could hardly be said that the steps therein were developed in conjunction with the employee.

[63] Ms Shears' report was tendered by Australian Hearing and the question arises as to whether, in such circumstances and in the absence of evidence from Ms Shears, I should rely on its contents.

[64] Australian Hearing submitted that the contents of the report should be accepted as matters of fact as:

(a) the Commission was not informed of Ms Shears' level of expertise (although the report indicated she had tertiary psychology qualifications);

(b) Ms Peary was an unrepresented party who does not know the rule in Browne v Dunn; [49]

(c) by receiving the report when she was under cross examination Ms Peary had no opportunity to comment on or challenge any aspect of its contents;

(d) the report contains more than the professional opinion of Ms Shears. It also purports to repeat what Dr Andrews and Ms Charleston had conveyed to Ms Shears. This raises the possibility that either could disagree with Ms Shears' representation of their view;

(e) the report purports to contain statements of Ms Peary about her work aspirations, when Ms Peary might disagree with Ms Shear's representation of what she said to Ms Shears or may have been more candid with an 'independent' consultant about her level of job satisfaction than she may have wished to convey to her employer;

(f) Ms Shears took account of the views of Ms Thompson who had made complaints about Ms Peary (without revealing these to her); and

(g) if Australian Hearing wanted to rely on the contents of Ms Shears' report it had ample opportunity to provide it to the Commission and Ms Peary in accordance with the Commission's Directions.

[66] An example of the problem in (e) above was Mr Eakin's interpretation that the report indicated that "Leonora did not like the 'people management duties' of the Office Manager's role, but felt she was capable of managing the administrative tasks." [50] In that respect it was submitted that Mr Eakin was acting on what Ms Shears had reported that Ms Peary had said to her, which included:

"Ms Peary advised that she does not believe that she is a people person. When asked if she would be keen to complete further training in this area to increase her skills and competence Ms Peary advised it was not a skill that she was keen to develop. …She would be keen to work in a business assistant's role and was considering applying for one of the positions. Ms Peary stated she would also go back to working as a customer service officer however she could not afford to do this."

[67] However in her evidence, which I accept, Ms Peary stated that what she had said was that she was not skilled in people management and she did require some training as she had not received any. It wasn't something she hated. It had not been an issue for her before Ms Essery was employed. [51]

[68] I adopt the following comments of the Full Bench of the Commission in Xiu Zhen Huang v Rheem Australia Pty Ltd [52]

"[28] The rule in Browne v. Dunn is fundamentally a rule of fairness in relation to the way in which the fact finding process ought proceed. It should not be applied in some mechanical fashion compelling a particular outcome whenever a witness is not cross-examined on aspects of his or her evidence. As Gleeson CJ in R v Birks notes [FOOTNOTE: (1990) 19 NSWLR 677 at 688] 'the central purpose of the rule [in Browne v. Dunn] is to secure fairness in the conduct of adversary proceedings. That consideration provides the best guide, both to the practical requirements of a rule in a given case, and to the consequences which may properly flow from its non-observance'.

[29] Pursuant to section 110(2)(b) the Commission is 'not bound by any rules of evidence'. Pursuant to that provision the Commission 'may inform itself on any matter in such manner as it considers just' and pursuant to section 110(2)(c) the Commission must 'act according to equity, good conscience and the substantial merits of the case'. It is fundamental to the statutory remit of s.110(2) that the Commission deal with matters before it in a manner that is fair. It is precisely because the 'rule' is fundamentally concerned with issues of fairness that the Commission will apply it in an appropriate case.

[30] Equally, the impact on the fact finding process of a failure to cross-examine a witness on aspects of his or her evidence is ultimately a matter in the discretion of the member hearing the case at first instance. A 'breach' of the 'rule' will only give rise to error on the part of the member at first instance if the member acted unreasonably in that regard resulting in factual findings that are relevantly unfair. …" [53]

[69] Given the circumstances and the dictates of fairness, I am not required to, and do not, accept the contents of Ms Shears' report as evidence in relation to Ms Peary's circumstances on which I will rely.

[70] This is, of course, not to say that I will not accept the report and statements therein as evidence of the existence of a report on which Australian Hearing may have relied.

[71] Ms Shears' 'recommendations' (which in his letter to Ms Peary Mr Eakin sought to convey the impression that he was bound to comply with) were in fact 9 steps which the report stated should be taken if Ms Peary would prefer to stay in the Office Manager position. Those steps included:

"1. Ms Peary's duties and responsibilities to be clarified.

2. Ms Peary to have the opportunity to meet with management to discuss the bullying complaint and respond accordingly. Ms Peary may request a support person including Psychologist, Ms Lynne Charleston.

3. If not already done so, all staff to undertake assertiveness and conflict resolution training.

4. Ms Peary to commence on suitable duties (temporarily) avoiding the people management tasks and duties that may cause conflict with colleagues. It is difficult to provide a timeframe for this; approximately 6 to 12 weeks depending on her rate of recovery.

5. It is anticipated that mediation may be required between Ms Peary and Ms Thompson (both parties have agreed) however upon further role clarification for Ms Peary this may no longer be necessary. Mediation may be required between Ms Peary and 'Anna'; this must be further discussed with both parties.

6. Ms Peary to meet with management on a weekly basis to review her performance for the week and to ensure she is managing effectively on suitable duties.

7. Ms Peary to receive mentoring from senior management during this time to assist her in managing difficult situations and aggressive behaviour of staff."

[72] It is trite to point out that Australian Hearing had the discretion to determine whether it would implement any or all of the steps and the means of implementing such steps - provided it had the power to do so.

[73] Mr Eakin's letter dated 26 May 2008 to Ms Peary continues:

"For these reason we would like to offer you the following options to assist in your rehabilitation.

1. We would like to offer you a full time position for a 3 month period at the Tweed Heads Hearing centre in a CSO role. We appreciate the additional travel this would require on your part and are prepared to allow you to do half of the travel in work time.

In addition to this we would be prepared to allow you to remain at your AHL3 salary for this time. The benefits of this option are that none of the stressors you are experiencing at Lismore would be present and you would not be in a supervisory role. We would of course continue to provide support to you during this time and would work with you to develop your people management skills.

If you elected to stay in Tweed for part of this time the usual TA (travel allowance)(sic) provisions would apply. Australian Hearing could also assist with relocation costs if that was a path you chose.

2. If you do not wish to take on a CSO role at Tweed Heads we can offer you a CSO role at the Ballina office for a 3 month period. As you are aware the Ballina office is a new site and there is significant work to be done in the development and promotion of this site. Again this role will remove the stressors you are currently experiencing at Lismore and you would not be in a supervisory capacity. We would continue to pay you at AHL3 over this 3 month period.

Lenora, you have expressed a desire to remain at the Lismore office in a CSO role. However you have specified that you will not work under Anna as an Office Manager. Should you take on a CSO role we would be required to advertise and invite applications. The appointment of the acting Office Manager Position would be on merit, therefore any consideration of the options should not make any assumptions as to who will be or will not be the Office Manager.

Your financial situation was mentioned as a stressor in the rehabilitation consultants report. In light of this and the fact that you may decide to move into a CSO role on a permanent basis we would like to offer you some financial assistance to get financial planning advice. Upon production of a receipt or invoice Australian Hearing will refund up to $500.00 towards the cost of the advice.

Lenora it is important that this matter is resolved quickly, therefore could I ask you to advise us of your preferred option by Thursday 29th May 2008."

[74] Whilst step 4 may have provided for Ms Peary to be temporarily removed from her people management duties and supervision of Ms Essery for 6-12 weeks, it did not necessarily provide for her removal from her normal workplace at Lismore, as Mr Eakin's letter would seem to indicate, or that Ms Peary or Ms Anna Essery should not work in the same office.

[75] In his written evidence Mr Eakin sought to justify the removal of Ms Peary from Lismore by asserting that her general practitioner had recommended that she 'avoid tasks that require people management' [54].

[76] I do not accept that evidence because Ms Shears' report indicates that Dr Andrews had told Ms Shears that Ms Peary must 'avoid managing difficult colleagues'. That only referred to Ms Essery as there is no evidence that Ms Peary's behaviour towards other staff was causing difficulties for Ms Peary.

[77] I cannot accept that Ms Peary's purported specification that she could not work under Ms Essery was justification for Ms Peary not remaining at Lismore for such a short and temporary period. For example, Mr Eakin could have complied with Ms Shears' steps by Ms Peary performing CSO duties at the Lismore Office, with that arrangement being revised if Ms Essery had won the opportunity to act as Office Manager or by Ms Peary not reporting directly to Ms Essery if, in fact, she was to undertake the acting role.

[78] If Mr Eakin had felt obliged to comply with Ms Shears' steps, why then did he not place Ms Peary on light duties at the Lismore office for a period of 6-12 weeks during which time he could have arranged for the role clarification, training, mediation, performance management and mentoring that were also contained in Ms Shears' steps?

[79] In his response to a question from the Commission, Mr Eakin clarified why he had not considered proposing other options:

'Well, you know, if Anna had lived in Ballina that might have been something we considered, but Anna lived in Lismore, same as Lenora. If we had decided to send Anna to Ballina we would have been punishing the person who made the complaint which was upheld and that, it just didn't seem right. So that was why we didn't send Anna to Ballina. We, it's a small office. The two desks that we're talking about sit opposite each other.

In Ballina?---In Lismore. If I had said okay, Lenora, you stay where you are. Anna, you report directly to me, it wouldn't have removed the problem. They still had to work together, they would have still had to get on with each other. We also, we couldn't have an office manager who only did parts of her job. Part of the office manager role was to manage the staff in the front office. The medical reports said that they recommended against that. Lenora said that she didn't want to do that, so we were trying to find a solution that met all the requirements.' [55] (Emphasis added)

[80] It appears that Mr Eakin was intent on removing the problem rather than dealing with it in the workplace. In doing so, it was Ms Peary who should bear any inconvenience as her punishment.

[81] It is relevant to establish the basis of the options that Australian Hearing put to Ms Peary.

[82] Australian Hearing did not submit that the options were part of a return to work plan pursuant to clause 7.15.3. In any event such a proposition may be problematic as at the time of Mr Eakin's letter of 26 May 2008:

(a) There was no return to work program in existence - only Ms Shear's steps.

(b) Ms Peary was not absent on sick leave - so there was no return to work involved. In fact, she had only twice taken one week's sick leave since the February 2008 incident - the second period being around the end of March. Mr Eakin confirmed that the options were for full-time work. [56]

(c) As already stated, it could hardly be said that the steps were developed in conjunction with Ms Peary, who had not seen them.

[83] There was nothing in Mr Eakin's letter to suggest that the options were voluntary, such as inviting Ms Peary to decline them, respond with an alternative option or suggest variations thereto. There was no evidence that at the time they were put to her by Mr Eakin and Ms Fraumano, Ms Peary was advised that she could decline them. Ms Peary gave evidence that she left the meeting feeling that she had no choice. [57] She was asked to respond with her preferred option.

[84] I find that even though they were described as 'offers' the options were imposed on Ms Peary. Ms Peary's only choice was to nominate which of the two 'medicines' she preferred, when her stated desire was to remain at Lismore.

[85] Given all of the evidence, I draw the inference that the options were imposed under the disciplinary provisions of clause 9.2.1 of the Agreement without the need for a mutually agreed alteration to her contract of employment. [58]

[86] The options were in most part in response to the finding of misconduct against Ms Peary (which was referred to in the second and third paragraphs of Mr Eakins letter of 26 May 2008, as contained in paragraph 55 above) in respect of her conduct towards Ms Essery and because Mr Eakin, and not Ms Shears, considered that it would be too difficult for Ms Peary to work in the same office as Ms Essery. This is not, of course, to say that Australian Hearing did not take the contents of Ms Shears' report into account in developing its options.

[87] My finding is consistent with a statement, which was contained in the Form R28 which was lodged on behalf of Australian Hearing with the Commission, against item 13 ('In summary form specify the facts on which the respondent relies …'), namely:

'The outcome of the misconduct investigation resulted in the Applicant being transferred without reduction to her conditions of employment.'

[88] It is clear that each of the imposed options were for a period of 3 months.

[89] On Wednesday 28 May 2008 Ms Peary consulted Dr Andrews and obtained a medical certificate for major depression which stated that she was unfit for work until 28 June 2008. [59]

[90] In an email dated Friday 30 May 2008 to Ms Peary, Ms Douglass clarified that a Ballina Hearing Centre (HC) would be established [60] and staffed by her five days a week. (Australian Hearing had moved on this initiative earlier than intended in order to provide this option.[61]) She would have standard CSO duties on the 2-3 days a week when the clinician was in attendance and for the remaining days work would be diverted from the Lismore office with duties to include 'any task currently done at Lismore HC that could be done at Ballina HC.' Also it was confirmed that the option was only for 3 months.[62]

[91] In her email reply to Ms Douglass dated Monday 2 June 2008, Ms Peary advised:

'I don't have any choice but to take the Ballina option, as Tweed is really not an option for me.

Transport is still a problem for me as my husband was taking me to work and picking me up before and that would not be possible if I am working in Ballina. …' [63]

[92] Ms Peary explained that Tweed Heads was too far away and it was not practical to travel there daily. She did not believe that she could have declined both options. [64]

[93] When she worked in Lismore Ms Peary's husband would take her to work as they lived less than 5 minutes from the office. [65] Ballina is 32 kilometres from Lismore and Mr Eakin considered offering to pay Ms Peary an allowance for her use of a private vehicle or to provide her with the Lismore office 'pool' car or a hire car. However when Ms Thompson advised him that Ms Peary had advised her that her sister who lives in Lismore and works in Ballina would give her a lift to Ballina, Mr Eakin did not consider such offers necessary.[66]

[94] Australian Hearing did not write to Ms Peary confirming the arrangements that were to apply. [67]

[95] There was no indication that the terms of the Ballina arrangements that had been contained in Mr Eakin's letter of 26 May 2008 and clarified by Ms Douglas had been varied at the time of Ms Peary's email of 2 June 2008, as a consequence of her commencing a month's sick leave with major depression on 28 May 2008.

[96] Comcare received a workers compensation claim from Ms Peary dated 3 June 2008.

[97] Ms Peary was contacted by Ms Doyle, who accompanied her when Ms Peary consulted Dr Andrews. As a consequence the earlier medical certificate dated 28 May 2008 was replaced by an amended certificate dated 17 June 2008 which, whilst continuing to certify Ms Peary as unfit for work until 28 June 2008, included additions to the management plan therein which had been sought by Ms Doyle, [68] namely:

'active discussion with work place to discuss gradual re-introduction of work, mentoring, mediation, up-skilling, training courses.' [69]

[98] A return to work plan (with target start and end dates of 30 June 2008 and 18 August 2008 respectively) was prepared. The plan, which Ms Peary agreed to, provided for a final goal of:

'Ms Peary to return to work 4 days at the Australian Hearing Office in Ballina as a Customer Service Officer. Pending conflict at the Lismore Office being resolved, Ms Peary to commence reintegration back into the Lismore Office.'

[99] Whilst that plan included an interim goal, I have not relied on this because of my lack of confidence in its detail. This is because the plan that was tendered by Australian Hearing appeared to be a photocopy of a document in which words in the interim goal have been whited-out and the reason for this was not explained to the Commission.

[100] Under that plan the responsibilities of Ms Peary, her supervisor, the case manager and the approved rehabilitation provider were as follows:

• Ms Peary to commence graduated RTW at the Ballina Office, gradually increasing hours as medically approved.

• Ms Peary to participate in conflict resolution to address current issues at the Lismore Office.

• Ms Peary to participate in people management training.

• Ms Peary to reintegrate back into Lismore Office following mediation and as medically approved.

• Ms Peary to continue treatment as medically recommended.

• To provide Ms Peary with advice and support as required.

• To assist in organising mentoring and additional training for Ms Peary.

Case manager (Ms Doyle, as the internal return to work coordinator)

• To organise conflict resolution services for all parties at the Lismore Office.

Approved rehabilitation provider (APM - represented by Ms Shears)

• APM to ensure Ms Peary obtains the upgrade from NTD on 27/6 to return to work on 1/7.

• Liaise with Ms Doyle re organising the conflict resolution.

• Maintain contact with Ms Peary to ensure she is coping effectively.

• To ensure Ms Peary is provided the mentoring and training required to return to her role as Office Manager.

• Attend medical reviews with Ms Peary and NTD to facilitate RTW process.

• Liaise with Lynne Charleston (Psych) to obtain regular updates on Ms Peary's progress.

• Ensure all parties are kept up-to-date with Ms Peary's progress (inc monthly reporting).

[101] Australian Hearing tendered a 'Proposed suitable duties plan No:1' (Plan No:1) [70] which was consistent with the return to work plan but, more specifically, included:

• Ms Peary to work 2 days a week at Ballina from 1 July 2008 and until she resumed from annual leave on 18 July 2008.

• Ms Peary to then work 3 days a week at Ballina until 31 July 2008.

• From 4 August 2008 until the target end date of 18 August 2008, in addition to working 3 days a week at Ballina, Ms Peary to work at Lismore for 4 hours on Mondays.

[102] The Plan No:1 was signed by Ms Doyle and Ms Shears but not by Mr Eakin. No reason for this was offered. Curiously, similar to the situation with the interim goal in the return to work program the Plan No: 1 that was tendered appeared to be a photocopy of a document that had whited-out entries where Ms Peary's signature and date thereof would have been.

[103] I accept Ms Peary's evidence that the original plan with which she agreed provided for her working at Lismore for half a day a week but this was not agreed to and replaced by a plan that excluded the half day in Lismore. [71] (This could explain the apparent whiting-out of the interim goal in the return to work program and the absence of Mr Eakin's signature on the Plan No.1 but it is not necessary for the Commission to make findings in that regard and I draw no such inferences.)

[104] In accordance with the return to work plan and Plan No:1, Ms Peary commenced working at Ballina on two days a week and after a few weeks increased this to three days a week after she obtained a supporting medical certificate from her general practitioner [72] - although she did not resume full-time until 2 September 2008. As Mr Eakin had returned to the position of Acting Area Manager, Lismore at the end of June[73] he resumed as Ms Peary's direct supervisor (and remained so until the end of August).

[105] On 25 July 2008 Ms Peary was psychologically assessed by Monica Johnson of Catalyst. The Commission was lead to believe that this assessment was made available to Australian Hearing in mid-August 2008 (refer to paragraph 119 below).

[106] Although Ballina was still attached to the Lismore office, Mr Eakin advised Ms Peary that she was to report directly to him as District Manager. Mr Eakin introduced lines of communication whereby Ms Peary was not to send emails to the Acting Office Manager (at some stage Ms Essery commenced acting in Ms Peary's substantive position) or phone the office, although she could email the Technician. Rather she was to go through Mr Eakin. [74] She did not participate in Lismore team meetings or training.[75]

[107] This limited communication with colleagues made Ms Peary feel isolated and made it difficult for her to do her work. [76]

[108] Mr Eakin stated that the arrangement was introduced because it had become apparent that if Ms Peary and Ms Essery communicated directly with each other simple requests from either were blown out of proportion and exaggerated and an insult was taken from the simplest requests. Ms Peary saw things that weren't there and sometimes Ms Essery did the same.

[109] According to Mr Eakin he 'resolved' the problem by becoming the conduit between Lismore and Ballina so that if Ms Peary or Ms Essery needed to talk to each other they would do it through him. His initial arrangement was to simply forwarded-on emails back and forward between Ms Peary and Ms Essery. However this caused trouble because the original message was still there and so 'Leonora and Anna continued to take offence or see things that weren't there.' He removed the problem by not forwarding-on emails but either making a phone call or sending his own email 'to remove that spark, if you like; remove that source of the problems.' [77]

[110] Mr Eakin's evidence about the duties he allocated to Ms Peary was vague and inconsistent. Initially, he had not known what Ms Peary was to do beyond the two days that the clinician was present and during his time in the position (up until the end of August) he did not need to decide what Ms Peary would do for the other three days because she was only working part-time. He stated:

'I wouldn't have left you there for (the other)(sic) three days on your own. … I didn't have an immediate solution. I would've found one but it never became necessary for me to find one …' [78]

[111] According to Mr Eakin, because the office had not been established full-time, the tasks at Ballina were limited and there were duties that had to be performed at Lismore. However 'whenever the opportunity would present, we would send work to Ballina' and he tried to shift some reports to Ballina. When Ms Peary commenced working three days a week he intended that she was going to be doing marketing in the area on the additional day - but 'it just never got done' and 'we certainly weren't going to be adding any more if we couldn't get the work we were trying to get done, done.' [79]

[112] That evidence did not sit well with Mr Eakin's other evidence that he often stopped off in Ballina to see how Ms Peary was going and that she appeared to be getting on top of her work and improving at a functional level. [80]

[113] I find that during the period that Ms Peary worked at Ballina under Mr Eakin her duties were limited and not clearly defined or documented.

[114] During Mr Eakin's period there was no evidence to suggest that action (as referred to in Ms Shears' 9 steps or the return to work program) was taken to arrange for Ms Peary's gradual re-introduction to the Lismore office or her participation in mediation or for any staff to participate in assertiveness or conflict resolution training. Mr Eakin was not providing the mentoring 'to assist her manage difficult situations and aggressive behaviour of staff' or having weekly meetings with her 'to review her performance for the week (and) to ensure she is managing effectively on suitable duties.'

[115] Mr Eakin's explanation seemed to be that he could only progress things if Ms Peary accepted his finding that the complaints against her had been substantiated and put what had occurred behind her. However Ms Peary refused to accept what she saw as an injustice. [81]

[116] According to Mr Eakin, mediation was not undertaken because of difficulties with Ms Essery and with Ms Peary. Whilst Ms Essery was quite emotional about it, she indicated that she could enter into mediation, although 'sometimes she felt she couldn't.' [82] Ms Peary was still making negative comments about the circumstances surrounding her removal from her position and wasn't ready to move forward. This was based on what he saw and his intuition.[83] Up until the time he left there had been no improvement in the interaction between them.[84]

[117] When Ms Peary's sister went on six weeks leave Mr Eakin arranged for her to have a hire car to travel to Ballina. [85] It seems that these arrangements then continued. Ms Peary's evidence was that transportation with her sister had not been practicable as her sister did not work everyday 'as she is sometimes away on business and she may take flex days, sick days or holidays.'[86] On some days she had taken her husband's car - which caused some difficulties because of her son's medical condition (asthma).[87]

[118] Whilst little to nothing occurred on the ground during July/August towards Ms Peary's reintegration to the Lismore office, at some stage Australian Hearing received a psychological assessment on Ms Peary from Monica Johnson of Catalyst who undertook the assessment on 25 July 2008.

[119] Ms Johnson's assessment was referred to in an internal email from Ms Doyle dated 14 August 2008 to her supervisor (Ms Douglass) which contained a table of:

(a) what were purported to be [88] 9 recommendations made by Catalyst about the management of Ms Peary (not to be confused with the 9 steps of Ms Shears); and

(b) the 'action' being taken by Australian Hearing on each.

[120] Ms Doyle advised Ms Douglass that the 'report explains why we are holding off on the conflict resolution services at present.' [89]

[121] Ms Peary has never seen the Catalyst report and it was not tendered by Australian Hearing during these proceedings.

[122] As a result of these proceedings, Ms Peary has received the internal email which purports to contain the Catalyst recommendations. This enabled her to learn of the actions that were being taken by Australian Hearing. [90]

[123] Therefore, during her employment Ms Peary never had opportunity to challenge the Catalyst recommendations or the actions that had been adopted by Australian Hearing.

[124] Whilst Ms Doyle's email sought approval to provide Ms Charleston and Ms Shears with a copy of the Catalyst report, the Commission was not advised if this had occurred.

[125] My summary of the table in Ms Doyle's email is outlined below. Some of the purported recommendations are queries or observations and some of the 'actions' do not fit that description.

(a) Ms Peary should receive treatment from her psychologist for 8-12 weeks.

Ms Peary and Ms Charleston state they cannot afford the cost.

(b) Ms Peary should be trained in performance management, management of difficult people and conflict resolution.

Cannot be actioned until the results of the proposed executive functioning test of Ms Peary are known.

(c) Mediation commence in 8-12 weeks, depending on Ms Peary's progress with treatment.

8-12 weeks time would be 19 September to 17 October.

(d) Query if it would be possible for Ms Shears to discuss management strategies for severe stress with Ms Peary and Dr Andrews.

Approval sought to provide Ms Shears with a copy of Catalyst report.

This had been raised by Ms Johnson with Mr Eakin. It will be important to brief the new Area Manager.

(f) Query if training will create permanent change in Ms Peary's management abilities.

(g) Conflict resolution would not be successful if implemented at this stage.

(h) An opinion that Ms Peary is defensive and unable to see anyone's perspective at the moment. A hope that counselling will enable her to foster insight on how her reactions and behaviours contribute to the conflict with others.

[126] A further return to work plan, [91] with target start and end dates of 13 August 2008 and 24 September 2008 respectively (the target end date of the previous plan being 18 August 2008) provided:

'Ms Peary to upgrade to her pre-injury hours of nine days per fortnight, remaining at the Ballina Office (pending resolution of conflict at the Lismore Office) � 8.30am - 5.10pm;' and

"Ms Peary to participate in the psychological development assessment in Sydney to identify training requirements.'

[127] That plan was signed by Ms Peary and Ms Shears on 13 August 2008 and Ms Graham (who became her supervisor from the end of August) and Ms Doyle on 10 September. The plan was much the same as the previous plan, but with the following differences:

(a) It added Ms Peary's participation in a psychological development assessment in Sydney to identify her 'training requirements.' This was to be organised by Ms Doyle.

(b) The responsibility of Ms Doyle to organise the conflict resolution services for all parties at the Lismore Office was omitted - as was the responsibility of Ms Shears to liaise with Ms Doyle re organising the conflict resolution.

(c) The responsibility of Ms Shears to ensure Ms Peary was provided the mentoring and training required to return to her role as Office Manager was omitted.

[128] On 21 August 2008, in response to a request from Comcare, Dr Thomas Wilmot, a consultant psychiatrist provided it with a psychiatric assessment and report [92] which included the following:

b. an incapacity to engage in work at the same level at which she was engaged by the Commonwealth in that work or any other work immediately before her condition occurred.

c. In your opinion, if Peary remains unfit for work please advise of her unfitness for work; period of incapacity, including what you consider to be the duration of the incapacity.

d. Are there any other factors causing incapacity for work or work restrictions? If so, please advise.

There are no other factors causing incapacity for work. Ms Peary would prefer not to be in employment with the particular staff member who originally caused her difficulties. However, this is a preference and not a work restriction.

14. If Peary has a capacity to engage in some work, please identify the type of duties she could undertake or specify the duties that should be avoided, in particular address:

a. the type of work Peary should be able to perform

b. the number of hours per week Peary should be able perform, and

Ms Peary should be able to return to her former employment without difficulty.

15. If not fit to return to any work, when do you believe that Peary would be able to undertake a return to work?

16. Is Peary capable of undertaking a rehabilitation program?

17. If fit enough to undergo a return to work program, please advise of the following:

a. Should the program be graduated? If so, please provide a schedule of weekly working hours;

c. A time frame in which a return to normal working hours could be achieved.

[129] It might be noted from the above that the consulting psychiatrist considered that:

• Ms Peary should be able to return to her former employment without difficulty;

• Ms Peary did not require a rehabilitation program;

• Whilst Ms Peary had a preference not to be in employment with a particular employee that was only a preference.

[130] On 1 September 2008 Dr Binns, who had taken over as Ms Peary's general practitioner certified Ms Peary as fit for her return to pre-injury duties from 2 September 2008 and she commenced working full-time on that date.

[131] On 8 September 2008 Ms Peary travelled to Sydney to be examined by Davidson Trahaire Corpsych (DTC) for the purpose of preparing an individual development report to identify her training needs.

[132] The DTC report dated 8 September 2008 [93] showed the 'Report Recipient' as Ms Peary. It stated that it was written to her 'to give you some insights into your areas of strength and development.' According to its preamble it 'should not be shown nor released to other people' and 'should not be used in other contexts.' Its contents included some of the key strengths highlighted by the assessment results and some of the developmental areas suggested by the results. It went on to list developmental tips and strategies.

[133] I accept Ms Graham's opinion that the report indicated that Ms Peary did not have natural leadership skills. Also I accept Ms Peary's evidence that: '… this does not mean I am incapable of having them. It is something that I could learn and develop skills in.' [94]

[134] Before the report was provided to Ms Peary, it's results were discussed by DTC with HR (People and Performance) and Ms Graham via video tele-link. [95]

[135] Ms Peary again visited DTC to obtain the results (and receive a copy of the report) during which the DTC consultant may have encouraged her to leave Australian Hearing and find work elsewhere. [96]

[136] There was no evidence of any training being organised for Ms Peary as a consequence of the DTC report, or indeed any training. Although Ms Graham accepted that she had to follow up the Catalyst recommendations that were subject to the DTC report being obtained, [97] there was no evidence of such action being undertaken or any action being implemented.

[137] I accept Ms Peary's evidence that after she was cleared on 2 September 2008 to resume full-time on her pre-injury duties, she was eager to return to Lismore and sought to discuss this with Ms Graham. She stated:

'I was keen to get back into things and made inquiries about what was happening in helping me return to the Lismore office as Office Manager, as it had been over 3 months since I was forced out and had received no assistance as promised or any indication whatsoever as to when I would be returning to Lismore as Office Manager'. [98]

[138] I accept that Ms Graham did not engage in any meaningful conversation with Ms Peary on the subject. [99] This is supported by what follows.

[139] In her evidence Ms Graham gave no indication of any progress towards Ms Peary returning to her substantive position. Certainly Ms Graham was not committed to a period of 3 months because:

'I guess the three months to me was always a rough timeframe. It wasn't an exact timeframe. That was what I was led to believe from HR. I know that Lenora did always ask me about the three months and I thought I was being quite plain in letting her know that the exact timeframes might not exist, that it might take four months or it might take five months or slightly longer to be able to get to a point, to take her to mediation and get her back in Lismore.' [100]

[140] Whilst Ms Graham was aware that 'at some point when she (Ms Peary) was due to come back to Lismore … we would have to go through mediation …. it never got to that point where she was, I guess, well enough and in the right frame of mind and the right position to be coming back to Lismore.' [101]

[141] This was because Ms Graham 'did not think she really had accepted yet what had happened in regards to the charges. She'd had a bullying investigation with her and she still wasn't acknowledging that that was the case.' [102] Ms Graham thought that Ms Peary wanted to 'sort of gloss over it and forget that it was a serious charge and that it would be upsetting for the staff, including Anna, to just walk back into the hearing centre again.'[103]

[142] I accept that Ms Graham advised Ms Peary that she could not participate in a mediation process until she completed more than six sessions with a psychologist … which Australian Hearing would not pay for. [104] Ms Shears told her this also.[105] That is consistent with one of the purported recommendations of Catalyst and the corresponding 'action'.[106] I also accept that Ms Graham advised Ms Peary that it was open to her to make her own arrangements for training.[107]

[143] In her written evidence Ms Graham stated that on 11 September 2008, during her meeting with Ms Peary and Ms Shears, Ms Peary indicated that she was keen to stay at Ballina. This conflicted with Ms Peary's evidence under cross-examination that during the meeting she said that she was considering staying at Ballina. However by that afternoon she had advised Ms Shears: 'that's not what I wanted.' [108] In her subsequent oral evidence Ms Graham acknowledged that a day or so later Ms Peary had indicated that she had changed her mind and was looking to get back to Lismore.[109]

[144] Ms Graham's evidence also went to matters of:

(a) Ms Peary's capacity to perform in a management position; and

[145] Whilst the DTC report was supposed to identify Ms Peary's training requirements for the position of Office Manager, Lismore, [110] Ms Graham intended to use the DTC report to ascertain 'whether Lenora had the skills to undertake a Management position.'[111] This seems consistent with an action in Ms Doyle's email which indicated that Australian Hearing intended to use the report to assess whether: 'Would training provided be able to create the expected permanent change in her management abilities.'[112]

[146] Ms Graham's evidence was that according to the DTC report 'Lenora's profile indicated that she was not interested in a management role and strongly not interested in leadership.'

[147] After reading the DTC report I do not accept such a finding - particularly in the context of Ms Peary holding the relatively junior position of Office Manager, Lismore office which is in charge of a handful of staff. I found nothing in the report about Ms Peary's lack of interest, only a general statement that she is 'unlikely to be oriented towards a leadership role.' In this respect I find Ms Graham's evidence to be unreliable.

[148] Ms Graham's evidence was that Ms Peary was constantly sending emails to her about things she could have actioned herself from Ballina. It appeared to her that Ms Peary spent considerable time in trying to find fault with the Lismore staff and gave as an example an email dated 25 September 2008. [113] She encouraged Ms Peary to problem solve as much as possible and to send any issues together in one email. This was disputed by Ms Peary and I prefer Ms Peary's evidence. Ms Graham's views were not supported by evidence.

[149] There was no evidence that Ms Graham had changed the lines of communication between the Lismore and Ballina offices that she had inherited from Mr Eakin and which involved the District Manager being a conduit for most communication. Ms Peary was complying with his arrangement.

[150] The email dated 25 September 2008 listed 6 incomplete orders and 6 open orders past the required date. I cannot see how this is an example of not sending many issues in the one email. Ms Graham did not refer to other examples, even though they may have been deleted.

[151] Ms Peary's evidence explained why the matters in the email of 25 September 2008 could not be resolved by her in Ballina where she did not have access to the files which were held in Lismore. [114] Whilst Ms Graham's gave contrary evidence,[115] her knowledge of the issue was vague. I prefer Ms Peary's evidence on this issue.

[152] Ms Graham was asked why she hadn't approached Ms Peary about her concern that she wasn't making decisions on things, as this would have allowed Ms Peary to explain the reason. In response Ms Graham stated that at some point she advised Ms Peary that 'wherever possible you should be actioning these things', which she thought was during a phone conversation when she was in Sydney. [116]

[153] I find Ms Graham's evidence that the email dated 25 September 2008 was an example of Ms Peary sending emails about a single issue and finding fault with staff at Lismore to be unreliable. Further, given the limitations of the Ballina office, there is insufficient evidence to support a finding that Ms Peary was not doing things within her authority.

[154] Similar to the situation that occurred under Mr Eakin, I find that little to nothing occurred on the ground from September onwards (under Ms Graham) towards Ms Peary's reintegration to the Lismore office. Indeed there was no evidence to suggest that Mr Graham was providing mentoring to assist her manage difficult situations and aggressive behaviour or having weekly meetings with her to review her performance for the week (and) to ensure she is managing effectively on suitable duties. It seems that things were just left to roll along.

[155] Even after she commenced working full-time the duties performed by Ms Peary at Ballina were not as responsible as those of her substantive position. Ms Peary (who had once been a CSO at the Lismore office) stated that as Ballina was only open to the public two days a week this involved less customer relations work than a CSO would perform in Lismore (which was open to the public for five days a week). Apart from marketing the service in Ballina (which was limited), [117] she spent much time sitting at her computer:[118]

(a) calling up old clients whose hearing aids were over 4 years old and trying to get them to make an appointment for a new test;

(b) phoning people who didn't pay their yearly fee;

(c) looking through the appointment book to fix up any issues;

[156] On 29 September 2008 Australian Hearing was advised by Comcare that Ms Peary's claim for compensation was rejected. [120] Whilst Comcare found that she had suffered an injury pursuant to the relevant legislation and her condition was significantly contributed to by her employment, Comcare was satisfied that her condition was the result of reasonable administrative action taken on the part of Australian Hearing.[121]

[157] On 16 October 2008 Ms Peary sent an email to the Technician at Lismore in the following terms:

'I really miss working with you, […5 given names …]. I am so lonely here and days like today I get a bit sad about it. I am still suffering depression but improving most days at least here there are no 'triggers' if you know what I mean. I am going to do a course to help me with dealing with conflict and difficult people, also some assertiveness training.

Is [another given name] still there? I bet she has been pulling out her hair. Does she smoke … if she didn't she probably does now!! @#$@#%$@% lol. I can just imagine the mess she has had to clean up as I see it from here!!!"

[158] The Technician showed the email to Ms Essery and forwarded it to Ms Graham with a request that Ms Peary be allowed to order inventory items herself instead of her emailing the Technician who placed the orders and then sent the items to Ballina.

[159] Ms Graham considered that the email was an attempt to undermine and put down Ms Essery as the Acting Office Manager [122] 'who (she)(sic) previously had a bullying claim against and so forwarded it to HR, thinking it inappropriate.'[123] Ms Peary needed to be aware those types of emails were inappropriate.[124]

[160] In response to a question from the Commission as to why Ms Graham saw the need to esculate it to the formal disciplinary process, she stated that she considered the email in the context of Ms Peary's other emails that she had been receiving pointing out Ms Essery's mistakes and that Ms Peary was not accepting that Ms Essery 'was there to do her job and was learning the role.' [125]

[161] After Ms Graham reported the matter to HR, on 16 October 2008 Ms Louise Perry, Executive Manager, People and Performance wrote to Ms Peary concerning an allegation of inappropriate behaviour. It was alleged that her comments in the email were disrespectful and undermined the Technician's direct supervisor Ms Essery. Australian Hearing considered the allegation to be serious and would be investigating the matter under Part 9 (Discipline) of the Agreement. She was requested to respond in writing by 23 October 2008.

[162] On 16 October 2008 Ms Graham spoke to Ms Peary and advised her of the development.

[163] During that conversation Ms Graham advised Ms Peary that she would be reviewing the existing hire car arrangement (which had been made prior to her time in the position). Her evidence was that when she had checked back she found that Ms Peary was not entitled to still have the hire car and it had been understood that her sister was driving her to and from Ballina. [126] I accept Ms Peary's evidence that Ms Graham advised her that the hire car was only provided whilst her sister had been on leave.[127]

[164] Ms Peary then went on sick leave, furnishing a medical certificate that she was suffering from a medical condition and was unfit for work from 17 October 2008 to 17 November 2008. [128] On 20 October 2008 Ms Peary emailed Ms Graham requesting her to advise the appropriate employee that she would respond to the allegation when she was cleared to return to work.[129]

[165] On 22 October 2008 Ms Graham called on Ms Peary at her home to collected the key to the Ballina Office which was needed for the next day. Whatever Ms Graham's other intentions may have been, she was unable to speak to Ms Peary and did not leave a message.

[166] In a letter dated 12 November 2008 to Ms Peary, Ms Perry, after expressing great concern about her medical condition, requested she respond to the allegation on the completion of her medical certificate, which was due by COB on Monday 17 November 2008. [130] That is, notwithstanding Ms Peary's anticipated absence on a month's sick leave and the nature of her medical condition,[131] her written response to what her employer had described as a serious allegation had to be submitted on her first day back.

[167] On 13 November 2008 Ms Peary emailed Ms Graham stating:

'Hi Laurena, I wanted to call you but could not find your mobile number.

Please be advised that I will not be returning to work for Australian Hearing as stated in the attached Dr's letter. …' [132]

[168] The attached certificate from Dr Binns stated:

'In my opinion, Leona A Peary is suffering from a medical condition and will be unable to return to her current workplace.' (Emphasis added)

[169] On 13 November 2008 Ms Graham responded by email:

'Hi Lenora I'm a little confused. Does this mean you are resigning?

My mobile is below if you want to give me a call.' [133]

[170] Within five minutes, Ms Peary responded by email:

'Hi Laurena, Yes that is correct, due to the high level of stress I am experiencing at work and under the current circumstances, I am unable to continue working for Australian Hearing.

Please accept this as my resignation. …' [134]

[171] There was no evidence of any further contact with Ms Peary prior to Australia Hearing acting on her resignation. In an email dated 26 November 2008 Ms Douglass acknowledged the resignation and 'as per your request' confirmed it was effective immediately. She stated: 'It is regrettable that you did not avail yourself of the opportunity to meet with us to resolve the matter of misconduct as was originally planned in our letter dated 16 October 2008.' [135]

[172] In response to a question from the Commission on what Ms Peary had meant when she sent her first email of 13 November 2008, Ms Peary stated:

'Well, when this last incident happened and I went to see my doctor, I was again upset and crying. This was the third or fourth time I'd gone to the doctor in tears and my health was deteriorating so badly that he said that I should not go back to work for Australian Hearing and put myself back in that situation.' [136]

[173] There was no evidence of other factors giving rise to the resignation.

[174] The certificate of service issued by Australian Hearing to Ms Peary stated that the position she occupied at her cessation was: 'Hearing Centre Supervisor (Lismore Hearing Centre, NSW). [137]

[175] Section 642(4) of the Act provides as follows:

"(4) For the purposes of this Division, the resignation of an employee is taken to constitute the termination of the employment of that employee at the initiative of the employer if the employee can prove, on the balance of probabilities, that the employee did not resign voluntarily but was forced to do so because of conduct, or a course of conduct, engaged in by the employer."

[176] Section 642(4) was introduced by operation of the Workplace Relations Amendment (Work Choices) Act 2005 (Work Choices). The Supplementary Explanatory Memorandum to the Workplace Relations Amendment (Work Choices) Bill 2005 [138] reads:

"295 Proposed subsection 170CD(1C) would provide that, for the purposes of the termination of employment provisions, an employee's resignation is taken to constitute a termination at the initiative of the employer only if the employee can prove, on the balance of probabilities, that he or she did not resign voluntarily, but that he or she was forced to resign because of the conduct (or a course of conduct) engaged in by the employer.

296 Subsection 170CD(1C) is intended to reflect the common law doctrine of 'constructive dismissal', reinforcing that the onus of proof in a case of alleged constructive dismissal rests upon the employee to demonstrate that there was a termination at the initiative of the employer."

[177] Prior to the commencement of Work Choices there was no predecessor to s.642(4) and the focus of case law was on the meaning of the expression 'termination of employment at the initiative of the employer' as used in the unfair and unlawful termination of employment provisions of the Workplace Relations Act 1996. The focus was not on whether the employee was constructively dismissed because, as stated by the Full Court of the Federal Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd [139] (Mohazab), it could not be assumed that decisions concerning other legislative formulations or cases concerning constructive dismissal were to be applied without qualification when considering such provisions.[140]

[178] Prior to Work Choices there had been some inconsistency in the case law on the test to be applied to satisfy the requirement that a termination was at the initiative of the employer.

[179] An example of the use of a wider scope of the term is Tamayo v Alsco Linen Service Pty Ltd [141] where, in granting leave to appeal, a Full Bench of the Commission found that the member may have made a legal error in a case which contained no element of force or coercion in directing attention to the question of whether or not the applicant had no effective or real choice but to resign. The Full Bench considered that, applying Mohazab, the more correct question was 'whether the act of the employer [resulted] directly or consequentially in the termination of employment.'

[180] Such a short formulation of Mohazab was the subject of comment by the more recent and prominent authority of P O'Meara and Stanley Works Pty Ltd [142] (O'Meara). Although the Full Bench decision in O'Meara was issued after s.642(4) became operative, it did not deal with s.642(4) as the application was lodged prior to the subsection becoming operative.

[181] After considering a number of authorities the Full Bench in O'Meara stated:

"23] In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there (sic) be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether 'the act of the employer [resulted] directly or consequentially in the termination of the employment.' [FOOTNOTE: Mohazab at page 205] Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer's conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign."

[182] It seems to me that in O'Meara, in applying the correct formulation in Mohazab, the Full Bench was, in effect, applying the test as expressed in s.642(2). I can see so reason to conclude that the legislature intended anything different.

[183] In my opinion the use of the word 'forced' should derive its meaning from the phrase 'forced to resign'. For many years the term 'forced to resign' has been a commonly used expression which has a particular meaning. For instance, in Mohazab the Full Court used the expression '… the employee did not resign willingly and, in effect, was forced to do so by the conduct of the employee.' [143] In another prominent authority in the NSW jurisdiction, namely Allison v Bega Valley Council,[144] a Full Bench of the State Commission referred to the term 'forced resignation.'[145]

[184] I think that it would be wrong to attempt to apply a literal interpretation to the word 'forced' in search of a new and unnecessary notion for the expression 'forced to resign.' Phrases are not the mere collection of words. [146] If the legislature had been intending to introduce some different concept it is likely this would have been elaborated on in the Explanatory Memorandum.

[185] The question of whether the resignation is taken to constitute the termination of employment of the employee at the initiative of the employer is a jurisdictional fact. This is not a discretionary decision. It is a question of law and requires a finding of fact, based on the evidence before the Commission, on whether the employee did not resign voluntarily but was forced to do so because of conduct, or a course of conduct, engaged in by the employer

[186] This is different to a determination by the Commission under the Act as to whether a termination of employment was harsh, unjust or unreasonable. In making such a determination the Commission exercises a discretion by forming an opinion, based on the evidence before it and having regard to the matters prescribed in s.652(3) of the Act. That is not the issue that is before the Commission in these proceedings. (Of course that is not to say that there might not be factual overlap between the two issues, i.e., the conduct that forced an employee to resign might also be conduct that might be persuasive in determining whether the termination was harsh, unjust or unreasonable.)

[187] Clearly, s.642(2) requires that the onus of proving the jurisdictional fact rests with the applicant and the question is to be determined by the Commission on the balance of probabilities.

[188] The question of whether the conduct of Australian Hearing was such as to indicate that it no longer intended to be bound by one or more of the essential terms of Ms Peary's contract of employment and this entitled Ms Peary to treat herself as discharged from any further performance [147] was not raised during the proceedings. For that reason I have not considered whether Australian Hearing initiated the termination of Ms Peary's employment on that basis. If such conduct existed, it is reasonable to assume that it would involve conduct that would be considered under s.642(4).

[189] The question of whether or not Ms Peary's medical condition was such that it prevented her from performing the inherent requirements of her position did not arise in these proceedings.

[190] The grounds advanced by Ms Peary in support of her claim that she was forced to resign might be summarised as:

(a) Because of the actions and conduct of her employer she had no effective or real option but to resign.

(b) Ms Peary continued to be on the receiving end of unreasonable criticism and treatment. Australian Hearing had failed to address concerns about her in a fair and respectful manner before escalating them via Discipline and Misconduct procedures.

(c) Ms Peary had been treated unfairly and pushed to the point that left her no option except to resign or stay in a situation that was harmful and detrimental to her health.

(d) Comcare had found that Ms Peary's employment with Australian Hearing had contributed to her medical disorder to a significant degree. Her general practitioner had advised her not to go back to Australian Hearing.

(e) Australian Hearing knew that she had been suffering from depression. However its action in dealing with her email dated 10 October 2008, including asking her to respond to a charge of serious misconduct on the day she returned from 4 weeks sick leave, was unreasonable and didn't show compassion or understanding of her medical condition.

(f) Australian Hearing's actions were disproportionate to the degree of misconduct which it determined had occurred.

(g) Australian Hearing had significantly changed the terms of her employment from that of Office Manager, Lismore, including the location of her employment from Lismore to Ballina and allocating her lower CSO level work.

(h) Although her relocation was to be for a temporary period it had become apparent from what she was told (and she was never kept informed of progress about her return to her substantive position) that there was no prospect of her returning to her substantive position of Office Manager, Lismore.

(i) Australian Hearing did not honour the terms of the agreed return to work program. Whilst Australian Hearing obtained various reports about her, nothing of substance occurred to enable her to return to her substantive position.

(j) Australian Hearing had lead Ms Peary to believe that she would be provided with mediation, training and mentoring. This was not provided. In the absence of this, any return to her substantive position would have been to an uncomfortable and stressful environment.

(k) Her physical and mental health was suffering severely, which also affected her family relations.

(l) Up until February 2008 Ms Peary had been successful in her position. She did not do any wrong doing and did not deserve to be treated the way she was (still at Ballina).

[191] Australian Hearing's submissions might be summarised as:

(a) The decision of Senior Deputy President Richards in Annette Megna v No 1 Riverside Quay (SEQ) Pty. Ltd. [148] provides a helpful analysis of s.642(4).

(b) The Commission should apply the test in s.642(2) objectively, rather than relying on the perceptions and subjective views of Ms Peary.

(c) In determining the jurisdictional issue, the Commission should not apply an egg shell skull-type rule. [149] Australian Health should not be liable for the way its reasonable actions affected Ms Peary's medical condition.

(d) The fact that Ms Peary had some reasons for not returning to the workplace does not satisfy the requirements that there has been a termination forced by the employer.

(e) The circumstances surrounding Ms Peary's submission of her resignation in her email dated 13 November 2008 does not support a finding that the resignation was forced. The language does not indicate any compulsion or attempt to constrain or oblige.

(f) At the time of her resignation, the issue of misconduct which was the subject of correspondence between Ms Peary and Ms Graham was in abeyance.

(g) There is no evidence that the conduct of Australian Hearing in dealing with Ms Peary's behaviours and illness were such as to force a resignation.

(h) Ms Peary's move to Ballina could not have forced her to resign or contributed to a chain that had that effect as:

• Australian Hearing had acted according to expert report dated 12 May 2008 from the rehabilitation consultant which included advice that had been communicated by Ms Peary and her general practitioner and the EAP psychologist.

• After considering the report Australian Hearing had formulated a plan whereby she went either to Tweed Heads or Ballina. Ms Peary then agreed to one the options, namely Ballina. She expressed her agreement in her response to the two options and by signing the return to work plan. In doing so she may not have wanted to go to Ballina.

• Ms Peary could not have stayed at Lismore as she was absent on sick leave and could not have returned there because she found it too stressful.

• The move to Ballina was not punishment/disciplinary action for Ms Peary's misconduct.

(i) Australian Hearing sought to assist Ms Peary through agreed return to work plans and arranging various assessments to assist her through her problems. Even if the Commission was of opinion that Australian Hearing could have taken more steps to assist Ms Peary this does not result in a finding that she was forced to resign.

(j) Whilst Ms Peary wanted to return to her position at Lismore, there was no evidence that anyone from Australian Hearing had told her that she could never return.

(k) Whilst Ms Peary disagreed that the contents of her email dated 10 October 2008 amounted to misconduct she could have responded accordingly. If she needed more time to respond she could have sought an extension.

(l) There was no evidence that Ms Graham was trying to get rid of Ms Peary. Ms Graham's query to Ms Peary 'Does this mean you are resigning', even if the Commission was of opinion that some other course might have been more appropriate, did not force the resignation in Ms Peary's response.

(m) Even though Ms Peary had a medical certificate saying that she was unable to return to her current workplace there was always the option of Ms Peary remaining in her employment. [150]

(n) The Commission is not in a position to determine whether the complaints of Ms Essery were properly founded or that the investigation thereof was properly conducted as all of the material in relation thereto is not before the Commission.

[192] Ms Peary resigned because her health had deteriorated to an extent that Dr Binns gave her a medical certificate which stated that she was unable to return to her current workplace. She was advised by him that her condition was such that she should not to go back to work for Australian Hearing. Comcare accepted that her employment had significantly contributed to her condition which had been diagnosed as 'Adjustment Disorder, depressive mood'.

[193] Whilst at one level it might be said that if Ms Peary was forced to resign it was because of her medical condition, because on the inextricable link between her health and her employment, the proximate reason for any such forced resignation was her employment.

[194] Therefore this is a case where the question seems to be whether the cumulative effect of conduct on the part of Australian Hearing over a period (from February 2008 onwards), when considered objectively, was such that Ms Peary's resignation was the probable result of its conduct and she had no effective or real choice but to resign.

[195] In that context conduct can include an act or omission.

[196] In considering Australian Hearing's conduct objectively I will not, of course, be reliant on Ms Peary's subjective opinion on whether such conduct forced her to resign. However in making an objective analysis of whether its conduct would force an employee who acts reasonably to resign I will allow for the employee to be someone with a medical condition similar to that of Ms Peary.

[197] Because this is not a case of a forced resignation that involves a single incident, I will, firstly, identify only critical conduct [151] on the part of Australian Hearing that might contribute to a forced resignation (some more than others) and, secondly, assess whether the sum total and seriousness of such conduct is sufficient to satisfy s.642(4).

[198] Probably the most significant conduct was Australian Hearing's failure to return Ms Peary to the position for which she was employed, namely Office Manager, Lismore at the end of the three month period (which she sought [152]) and requiring her to continue in temporary arrangements it imposed under its disciplinary powers. Whilst there might be some argument that Ms Peary acquiesced to the continuation of those temporary arrangements under the two return to work plans for the periods therein, in any event, up until the date of her resignation Australian Hearing had failed to return Ms Peary to her position - which was well after:

(a) 21 August 2008 when Dr Wilmot considered her fit for that work and that no rehabilitation program was required.

(b) Dr Binns certified her as fit to return to pre-injury duties from 2 September 2008.

(c) The target end date of 24 September 2008 in the final return to work plan signed by her.

[199] Further, Australian Hearing required her to remain in Ballina for an indeterminate period at its discretion. At the date of her resignation there was no prospect of her returning to her position as Australian Hearing had determined that this could not occur until she undertook mediation with Ms Essery (which Ms Peary had sought [153]). This was unreasonable as there were little to no prospects of mediation occurring because:

(a) Australian Hearing had determined that a necessary pre-requisite was that Ms Peary receive treatment from a psychologist at her own expense.

(b) Even if Ms Peary did receive treatment, according to a Catalyst recommendation the commencement of mediation was dependent on Australian hearing's consideration of her progress with treatment.

(c) According to an Australian Hearing 'action' to another Catalyst recommendation, it was aware that Ms Peary could not afford the treatment from Ms Charleston.

(d) Although Ms Peary was punished for her misconduct, similar to Mr Eakin, Ms Graham would not consider her return to Lismore so long as she asserted that she had not been guilty as charged.

(e) Mediation was dependent on Ms Essery's agreeing to participate.

[200] Australian Hearing required Ms Peary to accept working arrangements at Ballina which were less than satisfactory on an extended basis, particularly for someone with a medical condition similar to hers. These included:

(a) She was isolated from fellow colleagues at Lismore in accordance with the conduit arrangements implemented by Mr Eakin and continued under Ms Graham. She did not attend any staff meetings.

(b) Even though Mr Eakin stated that under the short-term arrangements he would not have left Ms Peary remain at Ballina on a full time basis, that is exactly what occurred from 2 September 2008 onwards on an indeterminate basis.

(c) Her work was made more difficult than necessary because of the conduit lines of communication.

(d) She was performing a lesser role that her position of Office Manager with lower level duties. Some were CSO duties, her marketing function was not adequately defined and she spent much time sitting at her computer performing routine functions. I accept her evidence that:

'I went from being an Office Manager in a very busy office with a lot of responsibility working with 8 other staff and living less than 5 minutes away. I ended up working in Ballina, which is up to 45 minutes away in a small room, by myself most of the time doing unstimulating tasks.' [154]

(e) She was required to incur the inconvenience of working in another town and travelling to and from Ballina which is 32 kilometres from Lismore.

[201] Australian Hearing had led Ms Peary to believe that she was to receive training to assist her in her role of Office Manager. At the time of her resignation, she had received no training and none was planned. Although Ms Peary attended on DTC in order to assess her training needs, nothing had eventuated.

[202] Similarly, Australian Hearing had led Ms Peary to believe that she was to receive mentoring from senior management to assist her in her role of Office Manager. There was no evidence of mentoring (in the true meaning of the term) having occurred.

[203] Senior officers of Australian Hearing who considered aspects of Ms Peary's performance less than satisfactory failed to discuss these with her. Examples are:

(a) Ms Thompson's 28 points that she discussed with Mr Eakin.

(b) Mr Eakin's advice to HR that he considered Ms Peary's behaviour disruptive to the Lismore Office.

(c) Ms Graham's failure to adequately addressed with Ms Peary the performance issues that Ms Graham raised in these proceedings.

(If (a) and (b) had been addressed with Ms Peary at the time, Ms Essery's complaint may not have occurred.)

[204] Ms Peary participated in the DTC program to assess her training needs. Australian Hearing was inappropriately using that report to question Ms Peary's management abilities in a position to which she was already appointed. If Ms Peary's performance in her position was considered poor or unsatisfactory, Australian Hearing was obliged to comply with clause 8.2 of the Agreement.

[205] Unfairly, Australian Hearing were making decisions on Ms Peary's future without keeping her adequately informed or giving her the opportunity to challenge premises upon which decisions affecting her were being made. This failure would contribute to an employee's feeling of alienation. Examples were:

(a) Ms Shears' report, including the 9 steps therein;

(b) The Catalyst report, including the recommendations therein. Also actions that Australian Hearing was taking in response to each.

[206] Australia Hearing's response to Ms Peary's request for more time to respond to the latest allegations was unreasonable. Considering that she was absent on a month's sick leave, the insistence from high authority that she provide her written response to such an important matter immediately on her return would have the effect of creating unnecessary stress, particularly for someone with a medical condition similar to that of Ms Peary. (Clause 9.1.1 of the Agreement provides that: the written response 'must be made within a reasonable time which is set by Australian Hearing having regard to the circumstances and which provides the employee with sufficient time to make their response …')

[207] Ms Graham's action in raising with Ms Peary the possibility that her means of daily transport to and from Ballina might be removed during the same conversation in which Ms Graham advised her of the complaint of misconduct that Ms Graham had made against her could reasonably give an impression that Ms Peary was to be punished for her email, even though the disciplinary process had not been finalised. [155] [I find on the evidence that it was more likely than not that Ms Graham intended to withdraw the hire care which had been provided.]

[208] I make no finding on the conduct of Australian Hearing in relation to Ms Peary's removal from higher duties in February 2008 and its investigation of Ms Essery's complaints as there was insufficient evidence before the Commission to enable me to do so. [I noted that in their oral evidence Mr Eakin and Ms Graham sought to sensationalise or exaggerate the conduct by describing it as 'bullying' when no such finding had been made. If that were the case each would have reasonably used the term in their written statements as would Australian Hearing have done in their formal letter.] Also I am not in a position to pass judgement on whether Ms Peary's 'punishment fitted the crime' in respect of the misconduct which occurred towards Ms Essery but note that clause 9.2.1 of the Agreement provides that the action to be taken shall have regard to the degree of misconduct.

[209] In the Full Bench decision of ABB Engineering Construction Pty Ltd v Doumit [156] it was said:

"Often it will only be a narrow line that distinguishes conduct that leaves an employee no real choice but to resign employment, from conduct that cannot be held to cause a resultant resignation to be a termination at the initiative of the employer. But narrow though it be, it is important that that line be closely drawn and rigorously observed. Otherwise, the remedy against unfair termination of employment at the initiative of the employer may be too readily invoked in circumstances where it is the discretion of a resigning employee, rather than that of the employer, that gives rise to the termination."

[210] I find that the cumulative effect of Australian Hearing's conduct had made Ms Peary's situation so insufferable as to make her continued employment untenable. Therefore I find that Ms Peary's resignation was the probable result of its conduct and she had no effective or real choice but to resign.

[211] Further I find that Ms Peary's resignation was not entirely voluntary. The circumstances were:

(a) Ms Peary was absent on a month's sick leave for a medical condition that was well known to Australian Hearing.

(b) Ms Peary submitted an email stating that she would not be returning to work for Australian Hearing as stated in the attached medical certificate, in which her general practitioner stated that 'she will be unable to return to her current workplace.'

(c) That was all that Ms Peary knew. There was no evidence to suggest that between the time that Ms Peary consulted her general practitioner she had received legal advice of how her rights could be affected by how her inability to return was presented to her employer.

(d) Ms Graham then initiated the discussion of a resignation and Ms Peary immediately positively responded to the way of managing her predicament in accordance with the 'suggestion' raised by her immediate supervisor.

(e) It is reasonable to allow an employee who is considering resignation some time to determine his or her rights and how the employee's future may be affected by a resignation, e.g., superannuation entitlements.

[212] Under normal circumstances a supervisor's suggestion that a subordinate consider resigning would not be sufficient to conclude that if the employee did resign if would not be done voluntarily. Further, the circumstances that I have outlined are far from a situation where a supervisor types up a draft resignation and taunts the employee to sign.

[213] However weight must be given to the diminished capacity of Ms Peary at the time of responding to Ms Graham. Also in the exchange there was no doubt that Ms Graham was the stronger party and Ms Peary was the party without power. At the time Ms Peary's condition was such that, at best she was very vulnerable and, at worst, a person of special disadvantage and Ms Graham was aware or ought to have been aware of her general medical condition.

[214] If, as submitted on behalf of Australian Hearing in these proceedings, Ms Peary had other options that resigning, [157] it was not explained why Ms Graham initiated discussion on only a possible resignation by Ms Peary. Ms Peary's workers compensation claim had been rejected and she had much to lose by resigning as she had been the sole income earner in a family that now lives on unemployment benefits.

[215] I find that, on the balance of probabilities that Ms Peary did not resign voluntarily but was forced to do so because of conduct, or a course of conduct, engaged in by the employer. This is based on the cumulative conduct of Australian Hearing and the circumstances in which Ms Peary submitted her resignation. True it is that the reason given for resigning was her poor health. However, viewed objectively, it is safe to conclude that, as Ms Peary's 'condition was significantly contributed to by [her](sic) employment' and her employment included the significant conduct referred to in this decision, such conduct contributed to the deterioration of Ms Peary's health such that the resignation may properly be viewed as a direct result of that conduct.

[216] The jurisdictional objection is dismissed and I order accordingly.

[217] Ms Peary's application will now proceed to conciliation in accordance with s.650 of the Act.

[2] Refer to s.642(4) of the Act.

[4] Evidence of Mr Eakin at PN959.

[5] Evidence of Mr Eakin at PN960.

[6] Evidence of Ms Peary - Exhibit P2, paragraph 3.

[8] Exhibit M4, paragraph 6 and Attachment JE; Exhibit P1, Attachments E and U.

[9] Exhibit P1, Attachment U - which is a document that Comcare provided to Ms Peary.

[11] Which Comcare gave to Ms Peary.

[12] Evidence of Ms Peary - Exhibit P1, subparagraph 9(h) and PN613 as confirmed by Mr Eakin at PN811..

[13] Exhibit P1, Attachment G and paragraph 10.

[16] Exhibit P1, Attachment G and subparagraph 11(e).

[18] Evidence of Mr Eakin at PN942.

[22] Evidence of Ms Peary at PN305.

[33] Evidence of Ms Peary at PN91.

[34] Refer to his letter dated 5 May 2008 to Ms Peary - Exhibit M4, Attachment JE6.

[36] This appeared to be conceded by Mr Eakin who stated that he had relied on HR for those sorts of things (PN951).

[39] The letter also referred to 2 client complaints. However I have not included these as Mr Eakin did not recall what happened to them and they did not effect the results of the investigation (PN1018).

[43] Exhibit M4, paragraphs 16-17 and PN840-PN841 and PN1017.

[47] Submission of Mr McNab for Australian Hearing at PN322 and PN339. It was explained that this was because the report was to Australian Hearing.

[51] Exhibit P2, paragraph 9. PN319 and PN346-PN347.

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