Northern NSW Local Health Network v Heggie

Court of Appeal (NSW)|2013-05-27|Before: Basten JA, Ward JA, Mr P, In J

Relevant legal principles 10Two legal principles were central to a consideration of the arbitrator's reasons. First, the reasonableness of the action taken by the employer was to be established objectively: the actual reasons of the decision-maker were not critical. 11The Deputy President took into account the fact that the general manager was not called to give evidence. (She was no longer employed by the appellant at the time of the proceedings in the Commission.) However, her evidence would, in broad terms, have potentially covered two areas. She could have spoken to the material available to her when she made her decision and she could have spoken of her reasons for making the decision. The available material was an important factor, but it was largely documentary (in the form of statements from witnesses to the incident) and was otherwise available. Her reasons for making the decision could have been relevant in a negative sense, if, for example, it were established that she was actuated by malice or other irrelevant factors. There was, however, no suggestion to that effect. Given the need to assess the reasonableness of the action objectively, her actual reasons for the decision were of little significance. 12The second issue concerned the material upon which such an assessment was to be undertaken and was the more complex. There is no doubt that the principal material on which the reasonableness of the employer's action was to be assessed was the information available to the general manager at the time the action was taken. One important consideration was that serious allegations had been made, which needed to be investigated. If established to be sound, some form of disciplinary action was likely to be taken against the respondent. On the other hand, he may have had a good answer to the complaints. The mere fact of uncertainty was an important factor in assessing the reasonableness of the suspension pending investigation. On that basis, anything that happened after the action was taken was arguably irrelevant. This was not a case analogous to a contractual election which could later be justified on the basis of grounds which were not in fact relied upon at the time the impugned election was made: cf Shepherd v Felt and Textiles of Australia Ltd [1931] HCA 21; 45 CLR 359. 13What happened after 13 August 2009 may have been relevant in so far as it cast doubt upon the proposition that the depression and anxiety suffered by the respondent was caused by action of the employer, as distinct from action of third parties, including the police. Otherwise, it had no bearing on the reasonableness of the employer's conduct. Furthermore, there was a real risk that reference to subsequent events could lead to arguments at to what was foreseeable and what possibilities the general manager should have taken into account at the time the decision was made. Such considerations may be permissible, but should not be influenced by knowledge achieved with hindsight. 14There may be cases in which action taken is reasonable, based on events which preceded the action but which were not known to the decision-maker. That issue does not arise in the present case and it need not be considered further. In short, in assessing the reasonableness of the action taken by the general manager, the relevant material was that in existence at or prior to the time when the decision was made and communicated to the respondent.

Approach of Deputy President 15The Deputy President found error on the part of the Arbitrator in failing to consider the following matters: (a) events involving the same patient on the previous evening; (b) the failure to inquire further before taking action; (c) the dire consequences which attended the disciplinary action, and (d) the absence of evidence of reasons of the general manager.

(a) failure to consider earlier events 16The background to the incident on 4 June 2009 was addressed by the Arbitrator in considering the respondent's state of mind when confronted with the same patient and the likelihood that he had become anxious and traumatised by the earlier incident: at [24] and [25]. He stated at [30]: "It is quite clear that the [respondent] had been involved with a patient whose behaviour had been extremely difficult and which required very careful and skilled treatment. It is quite plausible that the [respondent] would feel anxious seeing this patient in a general ward after having experienced the behaviour described on the previous evening in the mental health unit and appreciating the type of behaviour that the patient was capable of exhibiting. This was reinforced when the patient became violent again and had to be subdued." 17Although the Arbitrator did not refer to the earlier incident as one of the factors affecting the assessment of the reasonableness of the conduct of the general manager in suspending the respondent, it could not be said that he was mistaken as to the facts. The proper inference is that he treated that matter as not significant in assessing the reasonableness of the subsequent action by the general manager. Although the Deputy President identified as an error the failure to take this matter into account in determining reasonableness, he did not explain how it might be thought to affect the decision to suspend, as to distinct from being a factor to be considered in the course of the ongoing investigation. On one view, it might have been thought that the respondent's prior encounter with the patient might have forewarned him as to the difficulties he might face and have allowed him to consider in advance what strategy was likely to be effective. 18No error was demonstrated by the Deputy President in the failure of the Arbitrator to place weight upon this factor.

(b) further inquiry before suspension 19The Deputy President stated at [119]: "I also conclude that there were deficiencies in the conduct of the inquiry which should have been, but were not, taken into account by the Arbitrator. There is no evidence to suggest that the [employer] at any time during the conduct of the investigation had considered the relevance or otherwise of information that [the respondent] believed could be provided by [two other members of staff]." 20This statement is confusing: in the previous paragraph, the Deputy President had identified the material time as 5 June 2009, and noted the unavailability of witness statements at that time. It is difficult to believe that in the passage set out above he intended to refer to the subsequent investigation, which he had just dismissed as irrelevant. If he did, he was in error. If he did not, he must have intended to identify some further inquiry to be conducted by the general manager before she made the decision to suspend pending the proposed investigation. However, if the respondent could not reasonably have been suspended until a fuller investigation had been undertaken, there should have been some explanation as to what further investigation or inquiry was necessary before suspension would be reasonable. That was not provided. Nor was the reasoning of the Deputy President supported on this basis on the appeal.

(c) dire consequences for respondent 21The Deputy President noted, as had the Arbitrator, the "dire" consequences resulting from the action of the employer: at [123]. These were: "(a) loss of his security licence; (b) termination of his employment and a blemish on his employment record with the Health Service; (c) a ban preventing his registration as a qualified nurse until acquittal; (d) prosecution by the police which became protracted for 22 months which proceedings occupied three days before the court and concluded with an acquittal, and (e) his incurring very substantial legal costs." 22The basis on which the Arbitrator should have taken these matters into account was not explained. None of these things had occurred by 13 August 2009 (although the police had told him on 11 August that he would be charged) and most of them were not the immediate consequence of the conduct of the employer. There was no evidence that they were the kind of factors which should have been foreseen or, if foreseen, should have informed a decision as to whether the incident required further investigation and whether the respondent should be suspended pending that investigation. The suspension was undoubtedly adverse to his interests, although his interests were partly protected by him continuing on full pay. 23Again, as the Deputy President noted, the Arbitrator had himself noted the potential of those events to aggravate or exacerbate his psychological injury. The Arbitrator did not mistake the facts, but was entitled to put them to one side in considering the reasonableness of the employer's action. The Deputy President gave no reason for considering that to be an error on the part of the Arbitrator.

(d) actual reasons for suspension 24The Deputy President placed significant weight on the absence of evidence from the general manager and the absence of material indicating her reasons for suspending the respondent. 25After referring to particular matters which he considered relevant, the Deputy President noted that "[i]n the absence of evidence from her it is not known what matters were, in fact, taken into account by her at the time suspension and investigation was decided upon": at [117]. He also noted that it was not known whether she "had spoken to any person who had witnessed the event, including the patient, before the relevant action was initiated": at [118]. He then concluded that as the onus was on the employer to establish the reasonableness of its actions, the absence of evidence from the general manager left "many questions unanswered concerning what, if any, consideration was given to matters which I have concluded should have been taken into account before institution of the disciplinary action": at [121]. 26Once it is understood that the test of reasonableness was objective, subject to the limited qualifications noted above, which are not engaged in the present case, the actual reasons for the decision of the general manager were not significant. The Deputy President was in error in considering they were.

(a) taking subsequent events into account 27As noted above, there appears to have been some ambivalence on the part of the Deputy President as to whether events which occurred after the time of the decision were to be taken into account. In considering matters of principle, the Deputy President referred to the judgment of Hodgson JA in Jeffery v Lintipal Pty Ltd [2008] NSWCA 138. The Deputy President stated at [96]: "Whilst Hodgson JA did state, as submitted, 'the assessment of reasonableness is an objective one for the Commission', there is nothing there stated by his Honour that supports the [employer's] submission that the assessment should determine the question of reasonableness by reference to the circumstances at the time the action was taken (emphasis added). The authorities make it clear that the assessment should take into account all relevant circumstances." 28For the reasons explained above, that statement is erroneous. It may suggest (contrary to the assumption drawn earlier) that the later reference to "deficiencies in the conduct of the inquiry" was a reference to the subsequent investigation; thus the Deputy President may in fact have applied the erroneous principle in reaching his conclusion. On the other hand, if that were the case, he could not consistently have complained that it was wrong for the Arbitrator to refer to witness statements which had not come into existence until after the decision to suspend. (The apparent inconsistency may be explained by the alleged need to take into account the subjective concerns of the general manager.) 29At least in relation to the consequences for the respondent, the Deputy President took into account material which arose after the date of the decision, and was in error in so doing. As Sackville AJA notes, it is possible that the Arbitrator also took into account subsequent events, but to the extent that he did so, it was a course favourable to the respondent, and thus not challenged on appeal.

(b) failure to apply objective test 30The Deputy President placed weight on the subjective decision-making of the employer, rather than limiting his consideration, in the circumstances of the case, to an objective consideration of the reasonableness of the decision, based on information available at the time the decision was taken. That approach involved an error in point of law.

(c) nature of errors of Arbitrator 31The Deputy President correctly identified the matters for determination as being limited to whether the decision of the Arbitrator was affected by "any error of fact, law or discretion" and to "the correction of any such error": Workplace Injury Act, s 352(5). No error of law was identified nor did any question arise as to the exercise of a discretion. The criticisms made by the Deputy President of the Arbitrator's reasons were restricted to questions of fact and, in particular, factors which he said should have been taken into account but were not. For reasons given above, these matters did not constitute relevant "errors" for the purpose of s 352(5). Accordingly, there was no basis for the Deputy President to intervene. That he may have taken a different view of some facts to that of the Arbitrator did not relevantly demonstrate "error" for the purposes of s 352(5). The Deputy President therefore took an unduly expansive view of the scope of the appeal and in that respect erred in point of law.

Orders 32It follows that the appeal should be allowed and the decision of the Deputy President set aside. The remaining question is whether the appeal from the Arbitrator should be remitted to the Commission or whether it is appropriate for this Court to "make such other order in relation to the appeal as the Court thinks fit": Workplace Injury Act, s 353(2). 33For the reasons set out above, and more fully analysed by Sackville AJA, the Deputy President failed to identify error on the part of the Arbitrator. It is not contended that in some respect he failed to consider arguments which were raised before him. In those circumstances, it is neither necessary nor appropriate to remit the appeal from the Arbitrator for further hearing, so as to give the respondent a further opportunity to raise possible errors which had not been raised at the earlier hearing. Accordingly, the Court should, as proposed by Sackville AJA, dispose of the proceedings by substituting for the order of the Deputy President orders dismissing the appeal from the Arbitrator. 34WARD JA: I agree with the reasons of Sackville AJA and Basten JA and with the orders proposed by Sackville AJA. 35SACKVILLE AJA: This is an appeal under s 353(1) of the Workplace Injury Management and Workers Compensation Act 1998 ("WIM Act") against a decision made on 28 February 2012 by the Workers Compensation Commission ("Commission") constituted by a Presidential member (O'Grady DP): Heggie v Northern New South Wales Local Health Network [2012] NSWWCCPD 9. The Deputy President revoked a determination made on 13 September 2011 by the Commission constituted by an Arbitrator. 36The appellant ("Health Network") was the employer of the respondent ("Mr Heggie"). Mr Heggie claimed weekly benefits and payment of medical expenses in consequence of an injury suffered in the course of his employment. On 19 April 2011, Mr Heggie filed an application with the Commission pursuant to s 288(1) of the WIM Act. The matter was referred to an Arbitrator who determined that:

Mr Heggie sustained a psychological injury in the course of his employment;
the injury was wholly or predominantly caused by reasonable action taken with respect to discipline by the Health Network, within the meaning of s 11A(1) of the Workers Compensation Act 1987 ("WC Act"); and
an award should be made in favour of the Health Network on Mr Heggie's claim for weekly benefits and medical expenses. 37The Deputy President, on appeal by Mr Heggie pursuant to s 352(1) of the WIM Act, concluded that the Arbitrator was wrong in finding that the Health Network's actions were reasonable. Accordingly, the Presidential member found that Mr Heggie was entitled to an award of weekly compensation and to payment of his medical expenses. 38In its appeal to this Court, the Health Network says that the Deputy President's decision was erroneous in point of law. The Health Network submits that this Court should set aside the orders made by the Deputy President and in their stead order that the appeal from the Arbitrator's decision be dismissed.

Workers Compensation Act 39The WC Act, s 9(1) provides that a worker who has received an injury is to receive compensation from his or her employer in accordance with the Act. Section 9A(1) at the relevant time stated that: No compensation is payable under this Act in respect of an injury unless the employment concerned was a substantial contributing factor to the injury. 40Section 11A(1) of the WC Act qualifies the entitlement of a worker to compensation in respect of a "psychological injury": (1) No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers. ... (3) A psychological injury is an injury (as defined in section 4) that is a psychological or psychiatric disorder. The term extends to include the physiological effect of such a disorder on the nervous system.

WIM Act 41The Commission is established by s 366(1) of the WIM Act. Its members include the President, Deputy Presidents and Arbitrators: s 368(1),(2). Except as otherwise provided, the Commission is constituted by an Arbitrator: s 375(1). For the purposes of any proceedings on an appeal against a decision of the Commission constituted by an Arbitrator, the Commission is to be constituted by a Presidential member: s 375(3). 42Any party to a dispute about a claim for compensation may refer the dispute to the Registrar for determination by the Commission: s 288(1). If a dispute is determined by the Commission, it must issue the parties with a certificate as to the determination: s 294(1). A brief statement is to be attached to the certificate setting out the Commission's reasons for the determination: s 294(2). 43Section 352 of the WIM Act as amended by the Workers Compensation Legislation Amendment Act 2010 ("2010 Act"), provides as follows: (1) A party to a dispute in connection with a claim for compensation may appeal to the Commission constituted by a Presidential member against a decision in respect of the dispute by the Commission constituted by an Arbitrator. ... (5) An appeal under this section is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of any such error. The appeal is not a review or new hearing. (6) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission. The Commission is not to grant leave unless satisfied that the evidence concerned was not available to the party, and could not reasonably have been obtained by the party, before the proceedings concerned or that failure to grant leave would cause substantial injustice in the case. (7) On appeal, the decision may be confirmed or may be revoked and a new decision made in its place. Alternatively, the matter may be remitted back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions of the Commission. 44Prior to the 2010 Act coming into force on 1 February 2011, s 352(5) of the WIM Act read as follows: An appeal under this section is to be by way of review of the decision appealed against. The amendments to s 352(5) of the WIM Act by the 2010 Act do not apply to an appeal from a decision of an Arbitrator where the Arbitrator's decision was made before the commencement of the 2010 Act: 2010 Act, Sch 1 [25]. The Arbitrator's decision in this case was made after the commencement of the 2010 Act. 45The Second Reading Speech to the Workers Compensation Legislation Amendment Bill 2010 explained the amendment to s 352(5) as follows: The bill also addresses recent case law, which has extended the grounds of appeals against the decisions of arbiters and approved medical specialists. This has resulted in delays and increased costs without generating any benefit for injured workers or employers. The bill includes an amendment to make it clear that an appeal against a decision of an arbiter is not a full review of the arbiter's decision and is limited to a determination as to whether the decision appealed against was affected by error. (NSW Parl Deb, Legislative Council, 9 November 2010, at 27267.) 46The reference in the Second Reading Speech to "recent case law" appears to be to State Transit Authority of New South Wales v Chemler [2007] NSWCA 249; 5 DDCR 286, where it was held that s 352(5) of the WIM Act in its unamended form provided for an "internal merits review" requiring the Presidential Member to decide which is "the true and correct view": at [22], [30], per Spigelman CJ; at [63]-[66], per Basten JA; see also Workers Compensation Nominal Insurer v Al Othmani [2012] NSWCA 45; 10 DDCR 290, at [47]-[57], per Bathurst CJ (with whom McColl JA agreed). 47Section 353 of the WIM Act provides for appeals to this Court against decisions of the Commission constituted by a Presidential Member. Section 353 relevantly provides as follows: (1) If a party to any proceedings before the Commission constituted by a Presidential member is aggrieved by a decision of the Presidential member in point of law, the party may appeal to the Court of Appeal. (2) The Court of Appeal may, on the hearing of any appeal under this section, remit the matter to the Commission constituted by a Presidential member for determination by the Commission in accordance with any decision of the Court and may make such other order in relation to the appeal as the Court thinks fit. (3) A decision of the Court of Appeal on an appeal under this section is binding on the Commission and on all the parties to the proceedings in respect of which the appeal was made. 48Section 354 of the WIM Act makes provision for the procedures to be followed by the Commission. The section relevantly provides as follows: (1) Proceedings in any matter before the Commission are to be conducted with as little formality and technicality as the proper consideration of the matter permits. (2) The Commission is not bound by the rules of evidence but may inform itself on any matter in such manner as the Commission thinks appropriate and as the proper consideration of the matter before the Commission permits. (3) The Commission is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.

Construction of the Statutory Standards 49As the outline of the statutory framework demonstrates, the WC Act and the WIM Act provide for different standards to be applied at each level of the decision-making process. It is convenient to say something about the statutory standards.

Section 11A(1) of the WC Act 50Section 11A(1) of the WC Act was introduced in 1995 and was amended to its present form by the WorkCover Legislation Amendment Act 1996, Sch 1, cl 1.2[2]. The brief legislative history was traced by Spigelman CJ (with whom Hodgson and Bryson JJA agreed) in Department of Education and Training v Sinclair [2005] NSWCA 465; 4 DDCR 206, at [53]-[56]. 51In its current form, s 11A(1) required the Arbitrator in the present case to determine whether: Mr Heggie sustained psychological injury to which his employment was a substantial contributing factor (see WC Act, s 9A(1)); Mr Heggie's psychological injury was wholly or predominantly caused by action taken or proposed to be taken by the Health Network; the action taken by the Health Network was with respect to discipline; and the action taken by the Health Network with respect to discipline was reasonable. 52A broad view has been taken of the expression "action with respect to discipline". In Department of Education and Training v Sinclair, Spigelman CJ observed (at [35]) that the formulation in s 11A "extends to the entire process involved in ... 'discipline' including the course of an investigation". His Honour also noted (at [96]) that actions with respect to discipline usually involve a series of steps which cumulatively can have psychological effects: More often than not it will not be possible to isolate the effect of a single step. In such a context the "whole or predominant cause" is the entirety of the conduct with respect to ... discipline. 53In Jeffery v Lintipal Pty Ltd [2008] NSWCA 138, this Court held that the test of reasonableness is objective: see at [4], per Hodgson JA; at [44], per Basten JA; at [81], per Rein J. This decision establishes that an employer's action with respect to discipline is not necessarily reasonable simply because the action (in this case the transfer of a cleaner from a school) is taken in compliance with a contractual obligation owed to a third party: at [44], [47], per Basten JA; at [81], per Rein J. However, Basten JA also observed (at [44]) that the reasonableness of the employer's action in transferring the cleaner had to be "assessed by reference to the facts giving rise to the transfer". 54The parties to the appeal accepted that the onus of establishing the matters identified in s 11A(1) of the WC Act, including the reasonableness of the action taken by the Health Network, rested on the Health Network as the employer: Commissioner of Police v Minahan [2003] NSWCA 239, at [25], per Foster AJA (with whom Sheller and Santow JJA agreed); Department of Education and Training v Sinclair, at [18]. 55In his reasons, the Arbitrator quoted a passage which Foster AJA cited with apparent approval in Commissioner of Police v Minahan, at [27]. In that passage, drawn from an unreported judgment of the Compensation Court (Irwin v Director-General of School Education (Geraghty CCJ, 18 June 1998)), it was said that the question of reasonableness is one of fact and that the test of reasonableness is objective, requiring the rights of employees to be assessed against the objectives of the employer. This passage has to be understood in the context of the facts of Commissioner of Police v Minahan. 56In that case, serious allegations had been made against a police officer. Another officer conducted a preliminary enquiry with a view to determining whether the complaint required a full investigation to be undertaken. The preliminary enquiry determined that the complaint was "ridiculous" and that no further action should be taken. Nonetheless the police officer subject to the complaint was told that the matter would be referred to a corruption prevention unit for "intelligence purposes". The officer's request that a formal investigation be carried out so that he would have the opportunity to clear his name completely was rejected. The referral to the corruption prevention unit caused the officer great distress and led to him sustaining psychological injury. 57In these circumstances the Compensation Court found that the employer had not discharged the onus under s 11A(1) of the WC Act. Specifically, the Commissioner had not taken the interests of the officer into account in determining whether further resources should have been expended on an investigation into the complaint. The Court of Appeal dismissed an appeal by the Commissioner on the ground that the Compensation Court had not erred in law. 58The action of the employer that caused psychological injury to the police officer was not the "modest preliminary investigative step", but the referral of an apparently groundless complaint to the corruption prevention unit. The Commissioner referred the matter to the unit without undertaking obvious enquiries that were likely to have confirmed that the complaint was baseless and thus definitively cleared the police officer's name: see at [4], per Santow JA; at [29], per Foster AJA. The critical features of the case were that the investigating officer knew that the complaint was "ridiculous" and also was well aware that referral of the matter to the corruption unit would have a major psychological impact on the police officer concerned. The case is therefore not authority for the proposition that disciplinary action, short of dismissal of an employee or a finding of misconduct, is reasonable only if the decision is based on a consideration of all the circumstances bearing on the truth or otherwise of allegations made against the employee. 59The following propositions are consistent both with the statutory language and the authorities that have construed s 11A(1) of the WC Act: (i) A broad view is to be taken of the expression "action with respect to discipline". It is capable of extending to the entire process involved in disciplinary action, including the course of an investigation. (ii) Nonetheless, for s 11A(1) to apply, the psychological injury must be wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer. (iii) An employer bears the burden of proving that the action with respect to discipline was reasonable. (iv) The test of reasonableness is objective. It is not enough that the employer believed in good faith that the action with respect to discipline that caused psychological injury was reasonable. Nor is it necessarily enough that the employer believed that it was compelled to act as it did in the interests of discipline. (v) Where the psychological injury sustained by the worker is wholly or predominantly caused by action with respect to discipline taken by the employer, it is the reasonableness of that action that must be assessed. Thus, for example, if an employee is suspended on full pay and suspension causes the relevant psychological injury, it is the reasonableness of the suspension that must be assessed, not the reasonableness of other disciplinary action taken by the employer that is not causally related to the psychological injury. (vi) The assessment of reasonableness should take into account the rights of the employee, but the extent to which these rights are to be given weight in a particular case depends on the circumstances. (vii) If an Arbitrator does not apply a wrong test, his or her decision that an action with respect to discipline is or is not reasonable is one of fact. 60Section 11A(1) of the WC Act gives rise to a further question of construction which was not addressed in the parties' written submissions, but was raised in argument before this Court. The question is whether the reasonableness of disciplinary action is to be assessed exclusively by reference to circumstances that were known or should have been known to the employer at the time the action was taken. Mr Morris SC, who appeared with Mr Perry for the Health Network, contended that facts that come to light after the employer has initiated the relevant disciplinary action can and perhaps must be taken into account on the issue of reasonableness. Mr Hale SC, who appeared with Mr Hanrahan for Mr Heggie, submitted that reasonableness is ordinarily to be determined by reference to circumstances known to the employer at the time of the action with respect to discipline, or that should have been known at that time had reasonable inquiries been undertaken. He appeared to contemplate, however, that this would not necessarily be a universal rule, although he did not specify when it might be departed from. 61In my opinion, the better view is that the reasonableness of an employer's action for the purposes of s 11A(1) of the WC Act is to be determined by the facts that were known to the employer at the time or that could have been ascertained by reasonably diligent inquiries. The statutory language directs attention to whether the psychological injury was caused by reasonable disciplinary action taken or proposed to be taken by the employer. Ordinarily, the reasonableness of a person's actions is assessed by reference to the circumstances known to that person at the time, taking into account relevant information that the person could have obtained had he or she made reasonable inquiries or exercised reasonable care. The language does not readily lend itself to an interpretation which would allow disciplinary action (or action of any other kind identified in s 11A(1)) to be characterised as not reasonable because of circumstances or events that could not have been known at the time the employer took the action with respect to discipline. 62Such a construction would open the way to an inquiry that shifts the focus from the reasonableness of what the employer actually did at the time, to a hypothetical analysis of what action should have been taken in the light of circumstances that could not have been known to the employer when the decision was made. Many actions with respect to discipline, such as suspension on full pay while serious complaints are investigated, are necessarily taken without the employer having the opportunity to establish the full facts. Particularly is this so where an employer has to take into account the safety and well-being of staff, as required by one of the Policy Directives in the present case (New South Wales Policy Directive "Criminal Allegations, Charges and Convictions Against Employees" ("PD 2006-026")). 63A test that assesses reasonableness by reference to facts that could not have been known at the time the critical step is taken invites an extensive factual inquiry potentially far removed from the fairness or integrity of the actual decision-making process. A fortiori, action with respect, for example, to the transfer, performance appraisal or retrenchment of workers may be perfectly reasonable when taken. Yet in the light of subsequent, unforeseeable developments the action might turn out to have been mistaken and therefore retrospectively vulnerable to being characterised as unreasonable. 64This does not mean that evidence of events that post-date the relevant action can never be material to the question of reasonableness. Reports prepared or correspondence created after the event may shed light on the facts known to the employer at the time the action was taken or that could have been ascertained had reasonably diligent inquiries been undertaken. But I think it is unlikely that facts or circumstances that were neither known nor ascertainable when the employer took the action could have a material bearing on the reasonableness of that action. If it were otherwise, the evidence of a witness who comes forward long after the employer has taken the action with respect to discipline could be determinative on the issue of reasonableness. This would be so even if the decision-maker could not possibly have been aware of the witness's existence and even if, on the available material, the employer had no practicable option but to initiate disciplinary action.

Section 352 of the WIM Act 65Section 352(5) of the WIM Act, in its amended form provides that an appeal to the Commission constituted by a Presidential Member is no longer a review, as it was under the repealed sub-section. Nor is the appeal a new hearing. The appeal is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion and to the correction of any such error. 66Section 352(6) permits the Commission to grant leave to adduce fresh or additional evidence if satisfied of the conditions specified in the sub-section. Having regard to the limited nature of the appeal under s 352(5), the basic purpose of the power in s 352(6) is to allow the Commission to admit further additional evidence which, if accepted, would be likely to demonstrate that the decision appealed against was erroneous: CDJ v VAJ [1998] HCA 67; 197 CLR 172, at [109], per McHugh, Gummow and Callinan JJ. The power to admit additional evidence indicates that the appeal under s 352(5) is not an appeal in the strict sense, where a court is limited to determining "whether the decision in question was right or wrong on the evidence and the law as it stood when that decision was given": Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission[2000] HCA 47; 203 CLR 194, at [12], per Gleeson CJ, Gaudron and Hayne JJ. 67In Allesch v Maunz [2000] HCA 40; 203 CLR 172, the High Court distinguished (at [23], per Gaudron, McHugh, Gummow and Hayne JJ) between an appeal by way of rehearing and a hearing de novo. In the former: the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error. 68By contrast, in an appeal by a hearing de novo, the appellate court can exercise its powers regardless of error. See also Coal and Allied, at [14]. As has been seen (at [46] above) the appeal by way of review under the repealed s 352(5) was interpreted to require a fresh consideration of the merits of the claim and was not confined to the correction of error. 69In Coal and Allied, the plurality observed (at [11]) that the nature of an appeal ultimately depends on the terms of the statute conferring the right. Thus there is: no definitive classification of appeals, merely descriptive phrases by which an appeal to one body may sometimes be conveniently distinguished from an appeal to another. 70Although s 352(5) states that the appeal "is not a review or new hearing", it does not incorporate a descriptive phrase to accommodate its positive characteristics. What is clear from the statutory language is that the Commission is not entitled to overturn a decision of an Arbitrator unless the decision was affected by an error of fact, law or discretion. A statutory right of appeal in this form may or may not be of precisely the same scope as an appeal by way of rehearing under s 75A(5) of the Supreme Court Act 1970. For example, in Warren v Coombes [1979] HCA 9; 142 CLR 531, the majority of the High Court stated (at 551) that in general an appellate court is in as good a position as the trial judge to decide on the proper inferences to be drawn from undisputed or established facts. There may be a question as to whether the principle in Warren v Coombes applies to an appeal under s 352(5) of the WIM Act as it does to an appeal to this Court under s 75A(5) of the SC Act: Branir Pty Ltd v Owston Nominees (No 2) [2001] FCA 1833; 117 FCR 424, at [28]; Whiteley Muir & Zwanenberg Ltd v Kerr (1966) 39 ALJR 505, at 506, per Barwick CJ. 71It is not necessary in this case to explore the precise limits of an appeal under s 352(5) of the WIM Act seeking to challenge findings of fact. However, as Roche DP pointed out in Raulston v Toll Pty Ltd [2011] NSWWCCPD 25, at [20], the observations of Allsop J in Branir Pty Ltd v Owston Nominees (No 2) need to be borne in mind, particularly (I would add) where the challenge is to an evaluative judgment such as the reasonableness of actions by an employer with respect to discipline. Allsop J said, in relation to the application of the principle in Warren v Coombes, (at [28]) that: in [the] process of considering the facts for itself and giving weight to the views of, and advantages held by, the trial judge, if a choice arises between conclusions equally open and finely balanced and where there is, or can be, no preponderance of view, the conclusion of error is not necessarily arrived at merely because of a preference of view of the appeal court for some fact or facts contrary to the view reached by the trial judge. 72A fortiori, if a statutory right of appeal requires a demonstration that the decision appealed against was affected by error, the appellate tribunal is not entitled to interfere with the decision on the ground that it thinks that a different outcome is preferable: see Norbis v Norbis [1986] HCA 17; 161 CLR 513, at 518-519, per Mason and Deane JJ.

Section 353(1) of the WIM Act 73Both parties accepted that Basten JA in Watson v Qantas Airways Ltd [2009] NSWCA 322; 75 NSWLR 539, correctly analysed the nature of an appeal to this Court under s 353(1). His Honour's observations on the nature of such an appeal included the following (at [104]-[109]): [104] The first principle is that a provision in this form identifies as the subject matter of the appeal to this court "a decision of the Presidential member in point of law". The relevant "decision" may not have been separately identified by the Presidential member for determination, but must be at least implicit in the ultimate decision arrived at in the Commission. Whether identified in express terms or not, there will almost certainly be a decision as to the relevant legal principles to be applied in determining the matter before the Commission. ... [106] Thirdly, because subs (4) envisages that there may be appeals from interlocutory decisions, it is apparent that the decision in point of law could arise at an earlier stage of the proceedings than the final determination. The provision differs from statutory appeal provisions which permit an appeal from an interlocutory decision to admit or reject evidence, no doubt because the Commission is not bound by the rules of evidence: s 354(2). [107] Fourthly, because the decision is one by which the appellant must be "aggrieved" it may be inferred that the decision must be material to an outcome unfavourable, or less favourable than might otherwise have been the case, to the appellant. Further, the appellant must, in order to obtain the intervention of this Court, demonstrate that the decision was erroneous. [108] Fifthly, there is no reason, in a textual sense, to treat the reference to a decision in point of law as different in kind from a decision on a matter of law or a decision on a question of law. [109] Sixthly, the true meaning of the provision will be determined by reading it not merely by reference to surrounding provisions, but having regard to the purpose, scope and subject matter of the statute. (The plurality in Watson v Qantas did not consider the scope of an appeal under s 353(1) of the WIM Act.) 74In Onesteel Reinforcing Pty Ltd v Sutton [2012] NSWCA 282, Basten JA (with whom Allsop P and McColl JA agreed) noted (at [87]) that the effect of s 353(1) of the WIM Act was generally to preclude review directed to the assessment of evidence which does not otherwise demonstrate legal error. Thus if there is material before the Presidential Member capable of supporting factual inferences drawn by him or her, in the absence of any legal error the decision will not be erroneous in point of law: cf Onesteel v Sutton, at [2], per Allsop P. 75In Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; 241 CLR 390, the plurality warned (at [89]) against attempting a taxonomy of the various statutes creating rights of appeal on or in relation to questions of law. Their Honours stressed that it is the language of the statute that is the starting point. In my view, Basten JA's analysis in Watson v Qantas and his Honour's observations in Onesteel v Sutton are consistent with the High Court's admonition.

Background 76Mr Heggie commenced employment with the Health Network (formerly the North Coast Area Health Service) in 2001. From 2006, he was employed as a full time security officer at the Tweed Hospital. 77On 4 June 2009, an incident took place involving a female patient who had arrived at the Emergency Department of the Tweed Hospital the previous day (3 June 2009) in the company of two police officers. It appears that the patient had been transferred from a public hospital, where a mental health certificate had been issued pursuant to s 19 of the Mental Health Act 2007 in relation to her detention. 78During the evening of the patient's transfer (3 June 2009), Mr Heggie and a colleague, Mr Carlson, took action to restrain the patient. According to Mr Heggie's account, he sought assistance because the patient was "extremely combative" and a number of other staff members were called to control the patient. Subsequently Mr Heggie and Mr Carlson had to remove the patient from the shower, a procedure that made Mr Heggie feel uncomfortable because the patient was naked. The patient, according to Mr Heggie, continued to act in a violent manner until at last she settled. Mr Carlson prepared an incident report about the event. 79At about 7.30 pm on 4 June 2009, Mr Heggie was again called to assist with the same patient. A written complaint made by a nurse (Nurse Taylor) later that evening stated as follows: ONE SECURITY OFFICER CONTACTED TO ASSIST WITH MENTAL HEALTH PATIENT IN ROOM 5 ON MED ONE. FIVE NURSES, INCLUDING MENTAL HEALTH RN, WERE IN ATTENDANCE ATTEMPTING TO SETTLE AND RESTRAIN PT WHO WAS TRYING TO CLIMB OUT OF BED. OFFICER BOTH VERBALLY AND PHYSICALLY AGGRESSIVE TOWARDS PT PUSHING HER FIST INTO HER MOUTH CAUSING IT TO BLEED. PT ATTEMPTED TO BITE OFFICER DEMANDING HE LET GO OF HER, OFFICER CONTINUED TO PUSH HER FIST INTO HER MOUTH. OFFICER ASKED TO LEAVE BY NURSING SUPERVISOR. PT EXTREMELY DISTRESSED AND SETTLED IMMEDIATELY ONCE THIS OCCURRED. 80Mr Heggie submitted a report concerning the same incident, apparently also during the evening of 4 June 2009. His security incident report indicated that the patient had attempted to bite him and that the patient had struggled as he and other staff attempted to control her. 81At about 5.45 am on 5 June 2009, the Nurse Manager, Nurse Clark, spoke to the Security Manager, Mr Button. According to a report prepared by Mr Button on 11 June 2009, Nurse Clark advised him on 5 June 2009 that a security officer had been involved in an incident and that allegations of assault had been made. Mr Button's report stated that at about 6.10 am on 5 June 2009, he had proceeded to the intensive care unit (ICU) and spoken with Nurse Dicker who "gave [him] a version of the events ... similar to that of Nurse Clark". Mr Button's report provided no further details of the alleged assault. 82At 9.15 am on 5 June 2009, Mr Button telephoned Mr Heggie and inquired about the injury that Mr Heggie had sustained. In this conversation, Mr Heggie apparently repeated the substance of the account in his security incident report. 83Two police officers attended the hospital at 11 am on 5 June 2009 in response to a report of an assault the previous evening. The officers obtained a list of witnesses to the alleged assault, all of whom were subsequently interviewed. 84At 1.30 pm on 5 June 2009, Ms Podbury, the General Manager of the Hospital, approached Mr Button and inquired whether he would be agreeable to handing Mr Heggie a letter on his return to work on Sunday, 7 June 2009. In a letter written on 17 December 2009 (referred to below), Ms Podbury recorded that she had made a decision on 5 June 2009 to take action to formally investigate the alleged aggressive incident and to stand down Mr Heggie pending completion of the investigation. 85On 7 June 2009 at 6.45 am, Mr Button handed Mr Heggie a letter signed by Ms Podbury. Strangely enough, the letter was not in evidence. However, it is common ground that the letter informed Mr Heggie that serious allegations had been made against him and that he had been suspended on full pay. 86On 11 June 2009, Nurse Taylor, who witnessed the incident on 4 June 2009, signed a statement setting out her account of events. She stated, among other things, that Mr Heggie had forced the patient's fists into her mouth and that he had also hit the patient. Nurse Taylor recorded that she observed that the patient's mouth was bleeding as a result of Mr Heggie's actions. A statement to similar effect was signed by Nurse Cason on 11 June 2009. Nurse Cason had also been present when the incident occurred. 87On 11 June 2009, Mr Heggie sent a letter to Ms Podbury disputing the allegation that he had been verbally and physically aggressive towards the patient. Mr Heggie stated that the patient had acted in a physically aggressive manner and had verbally abused him. Mr Heggie said that the patient had bitten him and that he had attempted to restrain her using the techniques he had been trained to employ in such circumstances. 88On 17 June 2009, both Nurse Clark and Nurse Dicker made formal statements to the police concerning the alleged assault by Mr Heggie. They were witnesses to the events of 4 June 2009. 89On 11 August 2009, Mr Heggie was informed by a police officer at the Tweed Heads Police Station that he was to be charged with assault occasioning actual bodily harm to the patient. 90On 13 August 2009, Ms Podbury informed Mr Heggie in writing that due to the reporting obligations imposed by Policy Directive PD 2006-026, the incident had to be reported to the police. The letter further advised that an internal investigation was not able to proceed until the police had completed their own investigation. Once the police investigation had concluded, "an investigation will be completed in accordance with NCAHS [North Coast Area Health Service] ... processes". 91On 17 August 2009, a psychiatrist reported that Mr Heggie was suffering marked symptoms of anxiety and depression "in the context of what he believed was unreasonable disciplinary action by his employer". 92On 2 September 2009, Ms Podbury appointed an officer to undertake an investigation into the allegations against Mr Heggie. The investigator reported on 2 October 2009, upholding allegations that Mr Heggie had:

been verbally and physically aggressive towards the patient; and
pushed the patient's fist into her mouth causing her to bleed. Each of these matters was found to be a contravention of the NSW/NCAHS Code of Conduct. 93The investigator's conclusions were communicated to Mr Heggie on 17 November 2009. He was invited to provide a formal response and did so on 23 November 2009. 94On 3 December 2009, Ms Podbury wrote to Mr Heggie confirming the conclusions of the investigation and advising him that his actions constituted misconduct. In the light of these findings and Mr Heggie's employment history, Ms Podbury gave Mr Heggie five working days in which to show cause why he should not be dismissed. Mr Heggie responded to the show cause letter on 10 December 2009. 95Ms Podbury's letter was in evidence before the Arbitrator. The letter contained the following passage: I do not support your claim that a past incident involving this patient within the Emergency Department of The Tweed Hospital has direct relevance to the investigation process and outcomes determined regarding the incident which occurred on the 4th June 2009 in the Medical Ward of The Tweed Hospital. 96On 17 December 2009, Ms Podbury sent a four page letter to Mr Crawford, the Chief Executive Officer of the Health Network. The letter set out the allegations against Mr Heggie and noted that they involved possible breaches of the NSW Health/NCAHS Code of Conduct. The letter summarised the findings and recommendations made by the investigators. It also summarised Mr Heggie's response to the investigators' report, the show cause letter and Mr Heggie's response to that letter. Ms Podbury stated that Mr Heggie's conduct amounted to misconduct and that she recommended that disciplinary action be taken against him. 97On 23 December 2009, Mr Crawford informed Mr Heggie that his conduct justified summary dismissal and that, accordingly, his employment was terminated immediately. 98On 5 April 2011, the charges against Mr Heggie were dismissed by the Tweed Local Court. 99On 19 April 2011, Mr Heggie filed an Application to Resolve a Dispute pursuant to s 288(1) of the WIM Act. The Application claimed that Mr Heggie had suffered post-traumatic stress syndrome due to being assaulted while attempting to restrain a patient.

Arbitrator's Determination 100The Arbitrator recorded that Mr Heggie claimed to have suffered psychological injury as a result of the incident on 4 June 2009. The Health Network defended the claim on the ground that any psychological injury sustained by Mr Heggie was wholly or predominantly caused by the reasonable actions of the employer within the meaning of s 11A(1) of the WC Act. 101The Arbitrator noted (at [30]) that Mr Heggie: had been involved with a patient whose behaviour had been extremely difficult and which required very careful and skilled treatment. It is quite plausible that [Mr Heggie] would feel anxious seeing this patient in the general ward after having experienced the behaviour described on the previous evening in the mental health unit and appreciating the type of behaviour that the patient was capable of exhibiting. This was reinforced when the patient became violent again and had to be subdued. 102Nonetheless, the Arbitrator rejected (at [31]) Mr Heggie's assertion that he had suffered post-traumatic stress disorder as a result of the violent altercation with the patient on 4 June 2009. The medical evidence demonstrated that Mr Heggie suffered anxiety and depression in consequence of his suspension and the subsequent investigations following the incident of 4 June 2009 (at [32]). The Arbitrator did not explain, however, why the investigation by the police, to which he subsequently referred (at [37], [43]), was relevant to the question posed by s 11A(1), given that the section is concerned with action with respect to discipline taken or proposed to be taken by or on behalf of an employer. 103The Arbitrator next considered whether Mr Heggie's psychological injury was wholly or predominantly caused by the reasonable actions of the employer with respect to discipline. The Arbitrator quoted (at [35]) a passage from Irwin v Director-General, cited with approval by Foster AJA in Commissioner of Police v Minahan, at [27], as follows: The question of reasonableness is one of fact, weighing all the relevant factors. The test is less demanding than the test of necessity, but more demanding than a test of convenience. The test of "reasonableness" is objective, and must weigh the rights of employees against the objective of the employer. Whether an action is reasonable should be [attended], in all the circumstances, by a question of fairness. 104The Arbitrator accepted (at [37]) the medical evidence that: the psychological injuries suffered by [Mr Heggie] were as a result of the procedures that were implemented following the incident on 4 June 2009. These were the suspension from duty, the reporting of the matter to police, the police investigation and the subsequent investigation by the employer. 105The Arbitrator accepted (at [39]) that the dismissal of Mr Heggie and other matters such as having his registration as a nurse delayed and his security licence revoked may have exacerbated Mr Heggie's injury. However, the evidence showed that Mr Heggie suffered "a significant and debilitating psychological injury immediately following his suspension from duties". 106In the Arbitrator's view (at [42]), Mr Heggie's psychological injury was quite clearly the result of actions taken by his employer with respect to discipline. The actions which caused the injury were wholly and predominantly Mr Heggie's suspension and the instigation of an investigation by the Health Network and then by the police after the matter had been referred to them (at [43]). The Arbitrator pointed out that he did not need to consider the Health Network's actions in dismissing Mr Heggie, nor was it relevant that the criminal charges against Mr Heggie were ultimately dismissed (at [43], [56]). 107The Arbitrator accepted (at [45]) that the onus was on the Health Network to establish that its actions were reasonable. He then recounted the allegations concerning the incident on 4 June 2009 and the subsequent events, including the statements made by the nurses who were present at the time of the alleged assault. 108The Arbitrator noted (at [49]) that in Ms Podbury's letter to Mr Heggie of 13 August 2009 she had stated that because of the nature of the alleged incident, the reporting obligations imposed by PD 2006-026 required the matter to be referred to the NSW Police. He also noted (at [50]) that the evidence upon which the Health Network determined to suspend Mr Heggie and carry out an investigation was primarily contained in statements of other nurses and security officers employed at the hospital at the time. These people were either present during the incident or present shortly afterwards. 109The Arbitrator continued as follows: 56 The allegations of the applicant's conduct were extremely serious. The incident as described by the nurses who were present is one which would clearly warrant investigation. It is immaterial to my deliberations whether the charges laid by the police were ultimately dismissed or not. They were with respect to criminal proceedings and the burden of proof is completely different. 57 It is not relevant whether the dismissal was proper or based on a reasonable or thorough assessment of all evidence. 58 The injury was wholly or predominantly caused by the actions of the employer in suspending [Mr Heggie] and instituting an enquiry. These actions occurred between 7 June 2009 and 13 August 2009. 110It should be noted that at [58], the Arbitrator identified the relevant actions by the Health Network with respect to discipline to be the suspension of Mr Heggie and the initiation of an inquiry into the allegations against him. In contrast to his observations at [42], the Arbitrator in this section of the reasons did not refer to the impact on Mr Heggie of the police investigation (which was not carried out by or on behalf of the Health Network), nor to the investigation actually carried out by the Health Network. 111The Arbitrator said (at [60]) that the factors relevant to the question of reasonableness were as follows : (a) There was a serious and violent incident involving [Mr Heggie] and a patient. (b) The patient sustained injury. (c) A number of complaints were made by nursing staff about [Mr Heggie's] conduct, which if proven would establish serious misconduct. (d) [Mr Heggie] was suspended on full pay pending an investigation. (e) Due to the nature of the allegations the employer was obliged to report the incident to the police for investigation. (f) The employer deferred investigation until after the police investigation had concluded. (g) [Mr Heggie] was advised about the process and informed about the course of action being taken by the employers. 112The Arbitrator stated his conclusions as follows: 61 In circumstances where nursing staff were extremely distressed and made complaints suggesting inappropriate conduct including that a patient was assaulted or inappropriately restrained in a matter which caused physical injury to the patient, it was entirely appropriate and reasonable for the employer to commence an investigation and for the employer to suspend [Mr Heggie] pending the outcome of that investigation. 62 Having regard to the seriousness of the allegations and the protocols set out by Ms Podbury it was reasonable that the incident be reported to the police. It was quite proper and reasonable for [the employer] to await the outcome of the police investigation before continuing their internal investigation.

Policy Directive 2006-026 113The protocols to which the Arbitrator referred included PD 2006-026. This document contained the following instructions under the heading "Assessing the risk to patients, clients and staff": Upon receipt of the allegation or charge against an employee, the Chief Executive must ensure that the allegation or charge is assessed in terms of the ongoing risk to patients, clients, employees or the Health Service's operations. The process of risk assessment should continue throughout the investigation of an allegation or charge and at the conclusion of the process when a decision is made concerning any disciplinary action against the employee. ... If at any point in the assessment or investigation of an allegation there is a reasonable belief that conduct may have occurred that constitutes a serious sex or violence offence, the employee should be suspended immediately pending finalisation of the investigation and a decision concerning any disciplinary action to be taken. A decision to take administrative action or make administrative changes in relation to the employee based on the risk assessment process is in no way an indication of the final disciplinary decision which will be based on the final investigation report. All decisions in relation to suspension should be reviewed at least every 30 days. The protection of a Health Service's patients, clients and employees for which it is responsible is to be paramount. Appropriate counselling and medical services must be arranged immediately for the victim or any employee as appropriate. At the stage of initial risk assessment, it is not appropriate to inform the employee of the full details of the allegation, as this may compromise criminal investigations or expose any victim or witness to additional risk. In deciding when and what to inform the employee, due consideration must be given to the potential ongoing risk to patients/clients and to ensuring the employee is accorded procedural fairness. If the employee is to be placed on alternate or restricted duties, or is to be suspended, then the employee should be informed that an allegation has been made against them (without going into detail) and provided with an explanation about the process to be followed by the Health Service. (Emphasis in original.)

The Deputy President's Decision 114Mr Heggie's appeal to the Commission constituted by a Presidential member relied on the following grounds: 1. Failure to take into account relevant considerations. 2. Taking into account irrelevant considerations and or inaccurate factual characterisations. 3. Failure to preperly [sic] weigh up the competing factors in evidence concerning "reasonable action". 4. Failure to consider the whole of the evidence concerning the totality of the actions of the [Health Network] in a proper context. 5. Failing to deal with the obligations of the [Health Network] towards [Mr Heggie] having regard to the circumstances existing prior to the event relied upon to justify the series of increasingly severe disciplinary measures taken leading to the eventual termination of [Mr Heggie's] employment. 115The Deputy President identified (at [17]) the issue in the appeal as: whether the Arbitrator erred in finding that the action taken by the [Health Network] in respect of discipline was reasonable action within the meaning of s 11A of the [WC Act]. 116The Deputy President acceded (at [21]-[27]) to an application by Mr Heggie to adduce additional evidence on the appeal pursuant to s 352(6) of the WIM Act. The evidence comprised an extract from the Health Network's General Manual setting out "Duress Alarm Procedures". 117The Deputy President recorded at [52] that the Health Network had relied on a number of documents relating to conduct and discipline. These included:

the NSW Health Code of Conduct, addressing subjects such as harassment, violence and reporting obligations of staff;
Policy Directive 2005-225: "A Framework for Managing the Disciplinary Process"; and
PD 2006-026 ... 118The Deputy President also referred at [53] to a "Facilitator's Manual" entitled "Prevention and Management of Violence and Aggression" ("PMVA"). It appears that the manual was prepared by the PMVA unit of the Hunter New England Area Health Service and was used on the first day of a four day training course in PMVA. 119The Deputy President summarised (at [74]-[82]) the Arbitrator's reasons. The summary quoted the different formulations of the Health Network's actions with respect to discipline recorded at [42] and [58] of the Arbitrator's reasons. However, the Deputy President did not comment on the apparent disparity between the two formulations. 120The Deputy President noted (at [85]) that there was no challenge on the appeal to the Arbitrator's finding that Mr Heggie's suspension on 7 June 2009 and the subsequent investigation were actions taken by the Health Network with respect to discipline. The Deputy President did not explicitly identify which investigations he had in mind and whether they included the police investigations. 121The Deputy President rejected (at [91]) a contention by the Health Network that Mr Heggie's psychological injury was caused by the suspension from duty alone. The Deputy President interpreted the Arbitrator's findings to mean that the actions of the Health Network that were relevant extended not only to the suspension but also to the "subsequent investigation". Later (at [100]) he observed that the Arbitrator had determined that the suspension was the first step in the action relevant to causation of the subject injury and that the subsequent inquiry was also causative. 122The Deputy President recorded at [95] a submission by the Health Network that the statutory test required the Commission to consider the employer's actions at the time they were taken and to determine whether, in the circumstances prevailing at that time, the actions were reasonable. The Deputy President rejected this submission on the ground that the authorities made it clear that all relevant circumstances had to be considered. 123The Deputy President stated (at [101]) that: The fundamental decisions concerning the action to be taken in response to the reported assault were made by Ms Podbury within a period of hours on 5 June 2009. He observed that Ms Podbury, who was no longer employed by the Health Network, had not given evidence before the Commission, although letters she had written had been tendered. 124The Deputy President cited Whiteley Muir v Kerr for the proposition that factual findings may be disturbed on appeal if error is established. He quoted the observation of Barwick CJ in that case (at 506) that error may be established by showing that: material facts have been overlooked, or given undue or too little weight in deciding the inference to be drawn: or the available inference in the opposite sense to that chosen by the trial judge is so preponderant in the opinion of the appellate court that the trial judge's decision is wrong. 125The Deputy President considered (at [114]) that the Health Network had failed to take into account a number of relevant matters when making the decisions with respect to disciplinary action. He also considered that the Arbitrator had erred in failing to take those matters into account on the issue of reasonableness. 126The Deputy President stated (at [116]) that a proper assessment of the events of 4 June 2009 required careful and objective analysis of all the prevailing circumstances. These included: (a) the known violent propensity of the patient; (b) her history of violent behaviour; (c) the extreme and distressing circumstances created by the patient's conduct at the time of admission on 3 June 2009 and thereafter; (d) the difficulties encountered and injuries received by Mr Matheson [another security officer] when managing the patient before Mr Heggie presented at work on 4 June 2009; (e) that Mr Heggie was summoned to the medical ward without explanation or warning concerning the circumstances; (f) failure in those circumstances to ensure that relevant security protocols were observed; and (g) failure to comply with procedures concerning the activation of duress alarms at the time it was perceived by staff that security assistance with the patient was required. 127In the absence of evidence from Ms Podbury, it was not known what matters she took into account in determining on 5 June 2009 that suspension of Mr Heggie and further investigation into his conduct were appropriate (at [117]). The Deputy President rejected (at [118]) the Health Network's submission that reliance had been or could be placed on the witness statements, since these did not come into existence until after 5 June 2009. 128In the Deputy President's view (at [119]), there were deficiencies in the conduct of the inquiry that should have been taken into account by the Arbitrator. No consideration had been given to evidence that might have been provided by Mr Carlson, a security officer who would have been able to describe the patient's behaviour on 3 June 2009, the evening before the incident itself (at [119]). Similarly, no consideration had been given to evidence that might have been proffered by Ms Cooper, a mental health emergency care nurse, who had dealings with the patient on 3 and 4 June 2009. 129The Deputy President concluded (at [120]) that these matters should have been taken into account by the Health Network and its investigators given the "plain statement" in the PMVA Facilitator's Manual that: at times a staff member's duty of care to a client may justify the use of detainment, restraint or sedation for the client's own safety or the safety of others. The Deputy President noted that it was Mr Heggie's assertion that he had been attempting to restrain the patient for her own protection and that of staff. 130According to the Deputy President (at [121]) the onus was on the Health Network to establish the reasonableness of its actions. The absence of evidence from Ms Podbury left many questions unanswered concerning what, if any, consideration had been given to matters that should have been taken into account before the institution of disciplinary action. 131The Arbitrator had also failed to take into account the consequences of the Health Network's decision on the question of reasonableness, notwithstanding that the consequences for Mr Heggie were dire (at [122]). These consequences included the following: (a) loss of his security licence; (b) termination of his employment and a blemish on his employment record with health service; (c) a ban preventing his registration as a qualified nurse until acquittal; (d) prosecution by the police which became protracted for 22 months which proceedings occupied three days before the Court and concluded with an acquittal, and (e) his incurring very substantial legal costs. 132The Deputy President noted (at [124]) that the Health Network had argued that the principal reason for its actions was that it was obliged to act as it did. According to the Deputy President, this submission was based on PD 2005-225. Under the heading "Allegations/incidents patient/client abuse", PD 2005-225 stated that allegations of patient abuse "are to be reported to" a number of agencies including the NSW Police Service and the Staff Records Management Unit of the Department of Health. 133The Deputy President said (at [125]) that there could be no doubt that: in clear and unequivocal circumstances of an assault upon a patient there should be immediate compliance with the Policy Directive. The circumstances of Ms Clarke's assertion made to Mr Button that there had been an assault required a proper exercise of judgment and assessment of facts and circumstances to be made by Ms Podbury before the actions of suspension and investigation were instituted. As I have had occasion to observe in circumstances similar to the present (The Greater Southern Area Health Service v Walsh [2010] NSWWCCPD 98), the fact that protocol and guidelines may require and/or authorise certain action does not, alone, render action as being reasonable. Proper exercise of judgment and assessment of relevant matters must be made by those responsible to determine the threshold question as to whether such action is required. Any subsequent action must, if a defence is to be made out, be reasonable. The Arbitrator has not, when determining the question of reasonableness, addressed the shortcomings which I have attempted to summarise. Having considered all of the evidence, the Deputy President concluded (at [126]) that the Arbitrator's "conclusion that the actions of the [Health Network] were reasonable" was wrong. 134The Deputy President continued as follows: 127 My view is that, in the absence of Ms Podbury's evidence the [Health Network] has failed to establish on the probabilities that the action taken was reasonable. I have also taken into account those matters which have been raised in argument concerning the investigation process itself. The report by Mr Barron [one of the investigating officers] does not in any manner reveal the reasoning process which led him, and presumably Ms Bernard [another investigating officer], to the conclusion that the charges against Mr Heggie had been substantiated. The report does no more than recite those matters taken into account. Nothing found in that report or its appendices demonstrates the manner of evaluation of the material said to have been considered. Whilst it is correct as recorded in the report that Mr Heggie did not, on advice, participate in an interview, the investigators had Mr Heggie's correspondence and the patient's clinical record. Nowhere in that report is there any reasoning disclosed as to the relevance of that record or the probity of matters stated by Mr Heggie. 128 For the reasons which I have attempted to summarise above I conclude that the Arbitrator's error in determining the factual issue of reasonableness of the [Health Network's] action has affected his decision and his determination must be revoked on this appeal. 129 In the circumstances I consider it appropriate, and in accordance with legislative intent, to make a new decision in place of that of the Arbitrator. 135The Deputy President made an award of weekly compensation from 24 December 2009 to 14 April 2011, the latter date being the last day before Mr Heggie was able to resume employment as a nurse. The Deputy President also ordered the Health Network to pay Mr Heggie's medical expenses.

Health Network's Submissions in Chief 136The Health Network's submissions changed somewhat in the course of the appeal. Its written submissions in chief addressed the grounds in the Notice of Appeal.

Ground 1 137Ground 1 of the Notice of Appeal contends that the Deputy President erred in law by misdirecting himself that there was no evidence from Ms Podbury. The Health Network pointed out that Ms Podbury's letter of 17 December 2009 had been tendered in the proceedings determined by the Arbitrator. This letter constituted, so it was argued, evidence as to the basis for Ms Podbury's decision to suspend Mr Heggie and to instigate an inquiry into his conduct. These were the actions "with respect to ... discipline" that were found by the Arbitrator to be the cause of Mr Heggie's psychological injury. No further evidence could have been material to the issues between the parties. 138It was further submitted that the actions taken by Ms Podbury were considered by the Arbitrator and were found by him to be reasonable. There was no deficiency in the evidence adduced on behalf of the Health Network on these issues. Accordingly there was no basis for the Deputy President to overturn the Arbitrator's finding.

Grounds 2 and 3 139Grounds 2 and 3 in the Notice of Appeal contend that the Deputy President erred in law by conducting a review of factual findings in contravention of s 352(5) of the WIM Act, in that he failed to identify any error of fact, law or discretion on the part of the Arbitrator. 140The Health Network submitted that the Deputy President had identified a number of matters (at [116]) that might have been relevant in assessing the reasonableness of the Health Network's investigations, but were irrelevant in determining whether the Arbitrator had made an error of fact, law or discretion. This was because, on the Arbitrator's findings, Mr Heggie's psychological injury was unrelated to the conduct or outcome of the investigations. The issue before the Arbitrator was the reasonableness of the Health Network's decisions to instigate an investigation and to suspend Mr Heggie pending the outcome of that investigation. The events preceding 4 June 2009, in particular the incident involving the patient that occurred the previous evening, could have no bearing on the Health Network's decisions that caused the psychological injury to Mr Heggie. Thus, neither the Health Network nor the Arbitrator had to take into account the matters identified by the Deputy President.

Grounds 4 - 8 141No separate submissions of any substance were put forward in support of these grounds.

Health Network's Submissions in Reply 142Mr Heggie's written submissions asserted that the Health Network had done no more than identify what arguably was an error of fact by the Deputy President and thus had not established any error in "point of law", as required by s 353(1) of the WIM Act. Those submissions apparently prompted the Health Network to reformulate its argument. Its written submissions in "reply" identified four errors in point of law committed by the Deputy President: (a) The Presidential Member exceeded the statutory task required of him under s 352(5) [of the WIM Act] by revoking the decision of the Arbitrator and substituting his own decision without first identifying an error of fact or law and correcting that error of fact or law. (b) The Presidential Member exceeded the statutory task required of him by impermissibly conducting an evaluative review of the decision of the Arbitrator as to reasonableness, thereby exceeding his jurisdiction pursuant to s 352(5) and acting contrary to the express limitations in s 352(5). (c) The Presidential Member misdirected himself as to the matters necessary to be taken into account when determining the reasonableness of disciplinary action taken by the appellant in his consideration of the application of s 11A [of the WC Act]. (d) In consequence, the Presidential Member asked himself the wrong question when determining the reasonableness of that action. The Presidential Member appears to have regarded reasonableness as turning upon a subjective question as to what was in the mind of Ms Podbury at the time of her decision. But in law, the reasonableness of the action was an objective question and should have been addressed as such. 143Mr Morris argued that the Deputy President had in essence simply disagreed with the Arbitrator on the evaluative question of "reasonableness". The Presidential Member had not identified a factual error. He had merely found that he was not satisfied as to the Arbitrator's ultimate finding without an explanation as to whether the Arbitrator had taken into account the events preceding the altercation of 4 June 2005. In short, the Deputy President had made his own determination, rather than finding and correcting error as s 353(1) of the WIM Act requires. 144The Deputy President had also wrongly concluded that the Arbitrator's decision was liable to be set aside because he (the Arbitrator) failed to take into account factual material that bore on the reasonableness of the decision to suspend Mr Heggie. Insofar as the Deputy President found that the Arbitrator should have considered the significance of the events preceding the alleged assaults on 4 June 2009, so Mr Morris submitted, the Deputy President incorrectly assumed that the Arbitrator was bound to take these matters into account. Mr Morris submitted that this was an error of law by the Deputy President and not merely an error of fact. Thus this Court could set aside the Deputy President's decision.

Mr Heggie's Submissions 145Mr Hale submitted that the Deputy President recognised that under the amended s 352(5) of the WIM Act he could set aside the Arbitrator's decision only if that decision was affected by error. It was for this reason that the Presidential Member had cited the observations of Barwick CJ in Whiteley Muir v Kerr, at 506. It was open to the Presidential Member to conclude that the Arbitrator had overlooked material facts in determining that the decisions to suspend Mr Heggie and report the incident to the police were reasonable. 146Mr Hale argued that, even if the Presidential Member had erred, he had committed only an error of fact. There was no power on an appeal to this Court to correct such an error since s 353(1) of the WIM Act limits appeals to a party aggrieved by a decision of a Presidential Member in point of law. 147Mr Hale submitted that, in any event, the Deputy President had not committed any error, either of fact or law. The events preceding the incident of 4 June 2009 were capable of bearing on the decisions to suspend Mr Heggie and refer the allegations to the police. If, for example, the patient had been violent the day before the incident, that fact would be relevant to the question of whether Mr Heggie had used reasonable force in restraining the patient.

The Issues Before the Deputy President 148There was no dispute before the Deputy President that, as the Arbitrator found (at [42], [43]), the main or principal cause of Mr Heggie's psychological injury was action taken by the Health Network with respect to discipline. There was also no dispute before the Deputy President as to a number of other matters:

the Arbitrator had correctly identified that the test of reasonableness was that approved by this Court in Commissioner of Police v Minahan (see above at [103]);
the onus was on the Health Network to prove that its actions had been reasonable; and
the Arbitrator's finding that the disciplinary action taken by the Health Network had been reasonable was a finding of fact. 149As has been seen, the Deputy President concluded that the finding of reasonableness made by the Arbitrator was erroneous in the sense described by Barwick CJ in Whiteley Muir v Kerr, because the Arbitrator had not taken into account matters relevant to the question of reasonableness. He identified these matters in his reasons (at [116], [123]).

Difficulties with the Approach Taken by the Deputy President 150There are a number of difficulties with the approach taken by the Deputy President, although some of the difficulties are attributable to shifts in the position of each party and others to ambiguities in the Arbitrator's reasons. Furthermore, whether any of the difficulties constitutes an error "in point of law" warranting the intervention of this Court is a separate question to which I shall turn later (at [169]-[186]). 151First, the Deputy President did not advert to the internal inconsistency in the Arbitrator's reasons as to the action which caused Mr Heggie's psychological injury. The Deputy President proceeded on the basis (at [91], [100]) that it was not only the suspension and the initiation of an inquiry that was causative, but also the "subsequent inquiry". It is not entirely clear which inquiry the Deputy President had in mind, although his references to deficiencies in the inquiry conducted by the Health Network (at [119], [127]) suggest that he intended to refer to that inquiry (as distinct from the police investigation into Mr Heggie's conduct). 152The Deputy President's analysis is consistent with some of the Arbitrator's reasons (particularly at [37]), but inconsistent with others (particularly at [58]). Although it is not easy to reconcile the inconsistencies in the Arbitrator's reasons, I think that his ultimate finding as to the action by the Health Network that caused Mr Heggie's psychological injury is that stated at [58] - that is, Mr Heggie's psychological injury was wholly or predominantly caused by the actions of the Health Network in suspending him and in initiating an inquiry into the allegations. 153This conclusion is supported by the Arbitrator's finding (at [39]) that Mr Heggie "suffered a significant and debilitating psychological injury immediately following his suspension from duties" (my emphasis). In addition, when identifying the actions that he had to consider (at [43]) the Arbitrator referred to the suspension of Mr Heggie, the instigation of an investigation by the Health Network and an investigation by the police. He did not refer to the conduct by the Health Network of its own investigation as causally related to Mr Heggie's psychological injury. 154The Arbitrator's findings as to reasonableness are also significant. His findings (at [60]-[62]) were directed to the reasonableness of the Health Network's actions in suspending Mr Heggie and commencing an investigation (at [61]) and in reporting the matter to the police (at [62]). Had the Arbitrator intended to find that the Health Network's own investigation was causally related to Mr Heggie's psychological injury, he might have been expected to make a finding as to whether the conduct of the investigation was reasonable. The Arbitrator did not do so. 155Secondly, there appears to be an inconsistency in the Deputy President's reasons concerning the matters to be taken into account on the question of the reasonableness of the Health Network's actions. The Deputy President expressly rejected (at [96]) the contention that reasonableness should be determined by reference to the circumstances at the time the relevant disciplinary action was taken. However, the Deputy President also rejected the Health Network's submission that the reasonableness of its decision to suspend Mr Heggie should be assessed having regard to the statements made by several eyewitnesses to the alleged assault. The Deputy President said (at [118]) that Ms Podbury could not have relied on the formal witness statements when she made her decision on 5 June 2009, since the statements did not come into existence until later. (The witness statements were, however, available before Ms Podbury wrote the letter of 13 August 2009. The Arbitrator appears to have found that this letter constituted the decision to initiate an investigation into Mr Heggie's conduct.) The Deputy President's observation concerning the witness statements suggests that evidence emerging after a decision has been made cannot bear on the reasonableness of the decision. 156The Deputy President also took into account a number of "dire" consequences that were said to flow from the Health Network's actions. These consequences included termination of Mr Heggie's employment and the protracted prosecution by the police, which ultimately resulted in an acquittal following a trial lasting three days. All of the consequences identified by the Deputy President (at [123]) required action, beyond the disciplinary action taken by the Health Network that caused Mr Heggie's psychological injury, before they could come to pass. In some cases the further action had to be taken by third parties, such as the NSW Police. 157Thirdly, the Deputy President appears to have concentrated on the reasoning process of Ms Podbury, rather than that of the Arbitrator whose decision was the subject of the appeal pursuant to s 352(1) of the WIM Act. The Deputy President pointed out (at [117]), for example, that Ms Podbury had determined that the events that took place prior to the incident of 4 June 2009 were not relevant to her decision to suspend Mr Heggie or to initiate an investigation. That observation was no doubt correct, but the question before the Deputy President was whether the Arbitrator's finding that disciplinary action was reasonable was vitiated by an error of the kind warranting intervention pursuant to s 352(5) of the WIM Act. Ms Podbury's failure to consider the events prior to the alleged assault (assuming them to be relevant) did not necessarily mean that the Arbitrator had failed to take those matters into account on the question of reasonableness. 158Fourthly, the Deputy President referred on several occasions to the failure to adduce evidence from Ms Podbury on the appeal, although he acknowledged that correspondence of which she was the author was in evidence. That correspondence included the detailed letter of 17 December 2009 setting out the course of events and recommending that further disciplinary action be instituted against Mr Heggie. 159If Ms Podbury's state of mind was relevant to the question of reasonableness, the failure to give evidence might have permitted adverse inferences to be drawn more readily against the Health Network. However, no submission was made to the Deputy President that any such inference should be drawn (see at [115]). In any event, there could be no dispute that Ms Podbury had not taken the incident of 3 June 2009 into account when taking action against Mr Heggie. In her letter of 3 December 2009, she expressly rejected Mr Heggie's contention that the earlier incident was relevant to the alleged assault which occurred on 4 June 2009. Given these matters and given that the Deputy President accepted that the reasonableness of the Health Network's actions had to be assessed objectively, it is not clear why he thought that Ms Podbury's absence from the witness box was significant. 160Fifthly, it is not apparent why the Arbitrator was bound (as the Deputy President thought) to take into account the events of 3 June 2009 in determining whether it was reasonable for the Health Network to suspend Mr Heggie on full pay and to initiate an investigation into the allegations against him. The decision to suspend Mr Heggie was made by Ms Podbury on 5 June 2009. At that time, as the Arbitrator appreciated, Ms Podbury had available to her Nurse Taylor's written complaint concerning Mr Heggie's conduct that had been prepared immediately after the event. Ms Podbury also had available to her the information Mr Button had received from Nurses Clark and Dicker early the following day. That information supported Nurse Taylor's complaint. 161The material available to Ms Podbury on 5 June 2009 established that serious allegations of assault had been made against Mr Heggie by staff who had observed the alleged conduct. It is true that Ms Podbury also had available to her Mr Heggie's exculpatory account of the altercation on 4 June 2009. Clearly enough there were conflicting versions of the altercation that would have to be resolved in due course by appropriate processes. But as the Arbitrator found (at [60]), by the time Ms Podbury made her decision it was apparent that: a serious and violent incident had occurred on 4 June 2009 involving Mr Heggie and a patient; the patient had sustained an injury in consequence of the altercation; staff had made complaints about Mr Heggie's conduct amounting to allegations of assault (although none of the formal witness statements had yet come into existence); and the staff who had been involved were extremely distressed about the incident. 162The decision made on 5 June 2009 was not to sanction Mr Heggie for misconduct, but to suspend him on full pay pending further consideration of the allegation. That decision, as the Arbitrator pointed out, was made in conformity with PD 2006-026, which provided that, if at any point in the assessment of an allegation there is a reasonable belief that a serious violence offence may have occurred, the employee should be suspended immediately. Compliance with the Policy Directive is not determinative of the objective reasonableness of the Health Network's actions, but it is a highly material consideration. 163The events of 3 June 2009 may well have been relevant to an investigation of Mr Heggie's conduct and to the outcome of formal disciplinary proceedings against him. But it is difficult to see how these events could have been relevant to the decision to suspend Mr Heggie on full pay pending an investigation. Nurses present at the incident that occurred on 4 June 2009 had made complaints, albeit not in the form of formal witness statements, that a serious assault on a patient may have occurred. What had happened between Mr Heggie and the patient prior to the alleged assault could not detract from the significance of the nurses' account of events and the implications for the safety of staff and patients raised by the complaints. 164For similar reasons, it is difficult to see how the events of 3 June 2009 could have been material to the decision to initiate an investigation into Mr Heggie's conduct. Furthermore, if (as the Arbitrator appeared to find) that decision was made on 13 August 2009, Ms Podbury had available to her the formal witness statements made by the nurses. They reinforced the reports that had been made by eyewitnesses immediately after the alleged assault. 165A sixth difficulty with the Deputy President's reasons arises if contrary to my view, the events of 3 June 2009 were relevant to the reasonableness of the disciplinary actions that caused Mr Heggie to suffer psychological injury. The Deputy President proceeded on the basis that the Arbitrator gave no consideration to the events preceding the alleged assault. The Deputy President accepted that the Arbitrator had referred to these events, but said (at [107]) that the Arbitrator's comments were directed to the question of causation not reasonableness. 166The WIM Act s 294(2), provides that the Commission is to attach to its certificate of determination a brief statement of its reasons. The WIM Act, s 354, also provides that proceedings are to be conducted as informally as proper consideration of the matter permits and that the rules of evidence do not apply. Having regard to these provisions, I think that a fair reading of the Arbitrator's reasons is that he did take into account the events preceding the alleged assault, but considered that they had little bearing on the issue of the reasonableness of the Health Network's actions. 167The Arbitrator expressly referred (at [30]) to Mr Heggie's experience with the patient the evening before the alleged assault. The Arbitrator acknowledged that Mr Heggie would have felt anxious in dealing with the patient who had earlier exhibited violent behaviour. It would be an unduly critical reading of the Arbitrator's reasons to conclude that he had overlooked these comments when finding that the circumstances of the alleged assault made it "entirely appropriate and reasonable" for the Health Network to suspend Mr Heggie. Taken in context, the Arbitrator's finding should be understood as conveying that the actions of the Health Network were reasonable notwithstanding Mr Heggie's difficult experience the previous evening. After all, as the Arbitrator clearly appreciated, the very point of the investigation of the allegations was to determine whether they were well founded and, if so, what further action, if any, should be taken against Mr Heggie. 168Finally, although the Deputy President recorded in his reasons (at [52]) that the policy documents in force at the time the relevant action was taken included PD 2006-026, he made no further reference to that document in his reasons. Yet PD 2006-026 contains a direction that seems to be central to the Health Network's action in suspending Mr Heggie on full pay and initiating an inquiry into the allegations against him. Indeed, there is no reference in the Deputy President's reasons to the overriding concern of PD 2006-026, namely the need to avoid any ongoing risk to the Health Network's employees or to the patients in its care.

An Error in Point of Law? 169The difficulties I have identified do not necessarily lead to the conclusion that the Deputy President made an erroneous decision in point of law. As I have noted (at [146] above) Mr Hale argued that if the Deputy President committed any errors, they were errors of fact only and did not warrant the intervention of this Court. 170The finding made by the Arbitrator was one of fact. It involved "elements of fact, degree, opinion or judgment": Branir Pty Ltd v Owston Nominees, at [24], per Allsop J. It was not put to the Deputy President that the Arbitrator had misunderstood the principles to be taken into account in determining whether disciplinary action is reasonable and the Deputy President did not so conclude. 171Thus, as the Deputy President recognised, he could conclude that the Arbitrator's finding was wrong only if the latter had committed an error in making the evaluative judgment as to reasonableness. The Deputy President accepted that it was necessary to identify a factual error of the kind described by Barwick CJ in Whiteley Muir v Kerr. The error identified by the Deputy President was that the Arbitrator had failed to take into account a number of factual matters that he was bound to take into account on the question of reasonableness. Some of these matters related to events which occurred prior to the alleged assault; some to the circumstances in which Mr Heggie found himself immediately before the incident occurred; and some concerned the consequences said to flow from the Health Network's actions. In my opinion, none of the matters relied upon by the Deputy President was capable of demonstrating that the Arbitrator had erred in finding that the Health Network's actions relating to discipline were reasonable. 172As I have explained, the better view is that the Arbitrator did take the events preceding the alleged assault into account, but considered them to have no material bearing on the reasonableness of the Health Network's actions in suspending Mr Heggie and initiating an inquiry into his conduct. Given the Arbitrator's findings (at [60]) as to the circumstances known to Ms Podbury on 5 June 2009, it was well open to the Arbitrator to conclude that the altercation with the patient the previous evening could not detract from the reasonableness of the decision to suspend Mr Heggie and initiate an inquiry. Viewed at the time of the decisions to suspend Mr Heggie and initiate an inquiry into the allegations against him, the events might have had a bearing on whether any further disciplinary action should be taken against Mr Heggie and, if so, what. But having regard to the violent nature of the incident on 4 June 2009, the complaints made by staff against Mr Heggie and the need to protect the safety of the staff and patients (an objective explicitly stated in DP 2006-026), the events of 3 June 2009 could legitimately be regarded by the Arbitrator as of marginal significance. 173The Arbitrator referred (at [25]) to the circumstances in which Mr Heggie was called into the ward at 7.35 pm on 4 June 2009 and to his feelings of anxiety and vulnerability and his sense of being alone. For much the reasons I have already given, it was well open to the Arbitrator to conclude that these and the other matters referred to by the Deputy President (at [116]) had no material bearing on the reasonableness of the Health Network's actions in suspending Mr Heggie and initiating an inquiry. 174The adverse consequences to Mr Heggie that the Deputy President said (at [123]) should have been taken into account by the Arbitrator were in fact referred to in his reasons (at [39]). The Arbitrator appears to have taken the view that these matters were not material to the actions taken by the Health Network because they were not necessary consequences of the relevant actions (the suspension and the decision to investigate the allegations). For example, the termination of Mr Heggie's employment only came about as a consequence of the inquiries and a distinct decision-making process and, in any event (as the Arbitrator found), was not causally related to Mr Heggie's psychological injury. Similarly, although the Health Network referred the matter to the NSW Police, its action in doing so could hardly be rendered unreasonable by the possibility that the Police, in the independent exercise of their judgment, would decide to initiate a prosecution against Mr Heggie. The protocols which the Health Network was bound to take into account required the allegations of assault to be referred to the NSW Police. 175The Deputy President's conclusion that the Arbitrator had erred by not taking into account the factual matters he identified suggests that he transcended the permissible limits of the Commission's role on an appeal from an Arbitrator. A further indication that the Deputy President went beyond the identification of error appears from his approach to the Health Network's compliance with PD 2005-225 (which provided for allegations of patient abuse to be reported). 176As I have noted (at [133]), the Deputy President accepted that "in clear and unequivocal circumstances of an assault upon a patient" there should be immediate compliance with the Policy Directive. But he considered that the circumstances of Nurse Clark's claim to Mr Button on 5 June 2009 that a patient had been assaulted by Mr Heggie required a proper exercise of judgment and assessment of facts and circumstances to be made by Ms Podbury before the actions of suspension and investigation were initiated. The Deputy President also said that if the defence of reasonableness was to be made out, the Health Network had to show that any subsequent action was reasonable. 177The Arbitrator clearly did not consider that it was incumbent on the Health Network, having regard to its legitimate interests, to undertake a "proper" assessment of the conflicting claims as to the events of 4 June 2009 before suspending Mr Heggie on full pay and initiating an investigation. Plausible allegations of assault had been made; if correct, they amounted to patient abuse and a threat to safety. The Arbitrator was conscious that the Health Network's actions, of themselves, did not involve making findings against Mr Heggie and that he would have an opportunity to put his case in the investigation initiated by the Health Network. 178Another Arbitrator perhaps might have given greater weight to the merits of the Health Network obtaining formal statements from the witnesses and Mr Heggie prior to suspending him, although there were obvious disadvantages to that course (including delay in implementing a safety measure and the likelihood that the participants' accounts would still diverge). But these were matters that the legislation entrusted to the Arbitrator to evaluate. The Deputy President preferred a different approach, but his preference did not establish that the Arbitrator's decision was affected by an error of fact. 179Section 352(5) of the WIM Act imposed limits on the power of the Deputy President to interfere with the Arbitrator's decision. He was not empowered to overturn the decision if (relevantly) it was not affected by an error of fact. The Deputy President was aware of this limitation and expressed his conclusion by reference to what he considered to be the Arbitrator's failure to address "shortcomings" in the actions taken by the Health Network. However, for the reasons I have given, the Arbitrator either did take the matters identified by the Deputy President into account or was entitled, in the exercise of his evaluative judgment, to regard them as having little or no bearing on the question he had to determine: that is, whether the Health Network had shown that its actions in suspending Mr Heggie on full pay and initiating an inquiry into the allegations against him were reasonable. 180An error in "point of law" need not be a jurisdictional error. However, in Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323, McHugh, Gummow and Hayne JJ observed (at [82]) that a jurisdictional error may be committed if the decision-maker asks the wrong question, ignores relevant material or relies on irrelevant material in a way that affects the exercise of power. 181In this case, the Deputy President asked the correct question, namely whether the Arbitrator's decision was affected by an error of fact. But in answering that question, in my opinion, he took into account material that could not demonstrate that the Arbitrator had erred and was therefore irrelevant. This was not merely a factual error by the Deputy President but one which led him to exceed the authority conferred on the Commission by s 352(1) and (5) of the WIM Act. He therefore erred in point of law. 182Although it is not necessary to decide, I think that the Deputy President committed a second error in point of law. As I have explained, although the Arbitrator's reasons are not free from ambiguity, I interpret them to mean that the actions of the Health Network that caused Mr Heggie to sustain psychological injury were the suspension of Mr Heggie on full pay and the subsequent initiation of an investigation into the allegations of assault. The Deputy President was not asked to set aside the Arbitrator's findings on causation or to make any findings in substitution for them. 183On that basis, the actions of the Health Network that had to be assessed for reasonableness were the suspension of Mr Heggie on full pay and the initiation of an investigation into the allegations of assault. The Deputy President, however, considered whether the Arbitrator's finding of reasonableness disclosed error not by reference only to these actions, but by reference to other actions taken by the Health Network with respect to discipline. For example, the Deputy President took into account the adequacy of the Health Network's investigation into the allegation and, so it would seem, the decision to terminate Mr Heggie's employment (this being one of the "dire" consequences referred to at [123]). 184I accept that the Deputy President's task of interpreting the Arbitrator's reasons and findings was by no means straightforward. Nonetheless, the Deputy President was required by s 352(5) of the WIM Act to determine whether the decision appealed against was affected by an error of fact. Reading the Arbitrator's reasons as a whole, his decision was that the actions of the Health Network in suspending Mr Heggie on full pay and initiating an investigation into the allegations against him were reasonable. The Deputy President had to consider whether that decision was affected by an error of fact. 185In my view, the Deputy President addressed a different question. He considered whether the Arbitrator had fallen into error in finding that a wider range of actions with respect to discipline had been reasonable. Those actions included some that the Arbitrator had not found to be causative of Mr Heggie's psychological injury. 186By addressing a question other than the one mandated by s 352(5) of the WIM Act, the Deputy President committed an error in point of law.

Orders 187If a decision of the Commission on appeal from an Arbitrator is affected by an error in point of law, the Court may remit the matter to the Commission constituted by a Presidential member for determination in accordance with the Court's decision and may make such other orders in relation to the appeal as the Court thinks fit: WIM Act, s 353(2). The Health Network's notice of appeal sought orders setting aside the orders made by the Deputy President and instead ordering that the appeal from the Arbitrator's decision be dismissed. Mr Hale did not suggest that if the Deputy President erred in point of law that there would be any utility in remitting the matter to the Deputy President. Nor did he dispute that it would be appropriate to make the orders sought in the Health Network's notice of appeal. 188In these circumstances, I think that orders should be made finally resolving this matter. I propose the following orders:

Appeal allowed.
Set aside the orders made by the Deputy President on 28 February 2012, including the orders as to costs.
In lieu thereof, order that the appeal from the determination of the Arbitrator made in the Certificate of Determination dated 13 September 2011 be dismissed.
The respondent [Mr Heggie] pay the costs of the appellant [the Health Network] of the appeal to this Court.
The respondent, if otherwise qualified, have a certificate under the Suitors' Fund Act 1951. 189I note that the notice of appeal does not seek an order that Mr Heggie pay the Health Network's costs of the appeal to the Commission from the decision of the Arbitrator.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 August 2013

Beesley & Hughes (Respondent) File Number(s): 2012/95640 Decision under appeal Citation: Heggie v Northern New South Wales Local Health Network [2012] NSWWCCPD 9 Date of Decision: 2012-02-28 00:00:00 Before: Deputy President Kevin O'Grady File Number(s): A1-3199/11

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