BETWEEN : PILBARA IRON COMPANY (SERVICES) PTY LTD

Jurisdiction : WORKERS' COMPENSATION ARBITRATION SERVICE (WA)

Appeal and cross-appeal - Worker's compensation - Disease caused by stress - Relevance of worker's perception he was unfairly treated - Meaning of 'discipline' - Meaning of 'wholly or predominantly' - Meaning of 'unreasonable and harsh' - Section 5 Workers' Compensation and Injury Management Act 1981 definition of 'injury' - Section 5(4) Workers' Compensation and Injury Management Act 1981

Commonwealth Employees' Rehabilitation and Compensation Act 1988

Safety, Rehabilitation and Compensation Act 1988 (Cth)

Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2007 (Cth)

Workers' Compensation and Injury Management Act 1981

Application remitted to Workers Compensation Arbitration Service for further determination

Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321

Bednarczyk v Natcorp Investments Limited (Unreported, FCt WASC, Library No 970363, 23 July 1997)

BHP Billiton Iron Ore Pty Ltd v Treby [2017] WADC 6

Bobic v City of Armadale [2013] WADC 126

Bostik (Australia) Pty Ltd v Gorgevski [No 1] [1992] FCA 209; (1992) 36 FCR 20

Byrne and Frew v Australian Airlines Limited (1995) 131 ALR 422

Byrne and Frew v Australian Airlines Limited [1994] FCA 888; (1994) 120 ALR 274

Byrne v Australian Airlines Limited (1995) 131 ALR 422

Carson v Comcare [1998] AATA 644

Catholic Education Office of WA v Granitto [2012] WASCA 266

Comcare v Martin [2016] HCA 43

Commissioner of the Safety and Rehabilitation of Commonwealth Employees v Gregory Charles Chenhall [1992] FCA 535; (1992) 37 FCR 75

Department of Education v Azmitia [2014] WADC 85

Department of Education v Azmitia [2015] WASCA 246

FAI General Insurance Co Limited v Goulding [2004] WASCA 167

Housing Industry Association Limited v Murten [2004] WASCA 139

Jenkins v Western Australian Department of Training [1999] WASCA 199

McKay v Commissioner of Main Roads [2013] WASCA 135

McPherson v State Print (Unreported, WASC, Library No 960697, 15 December 1996

Mokta v Metro Meat International [2005] WASCA 143

Pacific Industrial Co v Jakovljevic [2008] WASCA 60

Pedley v West Coast College of TAFE (Unreported, C21-2006 (McCann) 8 November 2006)

Sydney Harbour Federation Trust and Comcare v Radford [2008] AATA 1087

Vetter v Lake Macquarie City Council (2001) 202 CLR 439

Wiegand v Comcare Australia [2002] FCA 1464

1 By application dated 8 August 2014 (filed on 13 August 2014) the respondent (applicant) Mr Spase Suleski (Mr Suleski) claimed against his employer the appellant (respondent) Pilbara Iron Company (Services) Pty Ltd (Pilbara Iron) weekly payments of workers' compensation for total incapacity from 22 August 2013 and continuing together with statutory allowances. The date on which the injury was alleged to have occurred was 22 August 2013. The injury was described as stress and anxiety which was caused by experiencing bullying and threats made by management during the period 22 August to 10 December 2013. The nature of the stress was described as an adjustment disorder which was contracted between 22 August and 15 December 2013.

2 Pilbara Iron declined liability for the claim and the application proceeded to hearing before an arbitrator, Mr Nugawela, in the Workers' Compensation and Arbitration Service (WorkCover) on various dates between 23 February and 28 October 2015. On 19 August 2016 the arbitrator delivered written reasons for decision allowing Mr Suleski's application and ordering Pilbara Iron to pay Mr Suleski workers' compensation payments for total incapacity together with statutory allowances. He also ordered that interest be paid on the sum payable by Pilbara Iron but given the lapse of time between the last hearing date and the delivery of the reasons for decision he gave Pilbara Iron liberty to apply regarding the rate of weekly payments from 3 July 2015.

3 By an amended notice of appeal Pilbara Iron seeks leave to appeal against the arbitrator's decision pursuant to s 247 of the Worker's Compensation and Injury Management Act 1981 (the Act) and seeks an order, inter alia, that the orders made by the arbitrator be quashed.

4 Mr Suleski's case before the arbitrator was based on the events of 22 August 2013.

5 On that day, Mr Suleski attended a meeting with his superintendent, Ms Bufton, during which he was advised, with prior warning, that he would be placed on a performance management plan (PMP) due to a number of performance issues identified in the preceding six months. The meeting on 22 August 2013 commenced implementation of the PMP which in part stated '... may result in disciplinary action up to and including termination of employment'.

6 It was not in dispute before the arbitrator that Mr Suleski suffered from a psychiatric disease that rendered him incapacitated for work on 22 August 2013 and that his employment was a contributing factor and contributed to a significant degree to that disease.

7 Mr Suleski accepted that the meeting on 22 August 2013 related to performance issues, and that the meeting was a contributing factor and contributed to a significant degree to his psychiatric disease (stress), but maintained that:

(b) if it was, the meeting was not the whole or predominant cause of his incapacity; and

(c) if it was, then Pilbara Iron's actions on 22 August 2013 were unreasonable and harsh.

8 Pilbara Iron's case before the arbitrator was two-fold. It argued that Mr Suleski's psychiatric disease arose wholly or predominantly from:

(a) Mr Suleski's expectation of discipline, in which case, the arbitrator should not have turned his mind to whether Pilbara Iron's conduct was unreasonable and harsh as this concept cannot apply to an expectation (McPherson v State Print (Unreported, WASC, Library No 960697, 15 December 1996)); or, alternatively

(b) actual discipline which was not unreasonable and harsh.

9 Pilbara Iron's primary argument was that of an 'expectation' of discipline.

10 In its written outline of opening submissions dated 16 February 2015 filed at WorkCover, Pilbara Iron submitted (pars 2 - 3):

1. The respondent denies the applicant is entitled to the orders sought on the grounds that any psychological condition arose out of discipline or alternatively his expectation of discipline - as set out in s 5(4) of the Act.
2. Specifically, the respondent submits that the matters constituting discipline for the purposes of actual or an expectation of discipline were:

(b) the subsequent meeting on 22 or 23 August 2013 that discussed the performance management plan issued to the applicant; and

11 However, in its written outline of closing submissions dated 31 July 2015 Pilbara Iron adopted a different position by submitting its primary position was that Mr Suleski's psychiatric condition arose from an expectation of discipline. It was further submitted that the meeting on 22 August 2013 constituted actual discipline: see [6], [31].

12 As outlined above, Mr Suleski's position at the hearing before the arbitrator was that his psychiatric condition did not wholly or predominantly arise from any of the matters referred to in s 5(4), specifically from a matter of discipline, or an expectation of discipline, because the implementation of the PMP was not a matter of discipline, nor did it give rise to any relevant expectation, but if his condition did arise from a matter of discipline, the discipline was unreasonable and harsh on the part of the employer Pilbara Iron (see Mr Suleski's written outline of submissions filed at WorkCover dated 20 February 2015 and 21 August 2015). Both in his written opening and closing submissions Mr Suleski submitted that his employment was a significant contributing factor to his injury and that none of the s 5(4) exclusions applied, but did not clearly identify how the employment contributed to the injury. It is not clear whether it was Mr Suleski's case there were other, apart from the PMP implementation, employment factors or matters which significantly contributed to the injury (it being accepted that the injury was a disease caused by stress). Although it appears Mr Suleski's principal position was that the PMP was not a matter of discipline, it is unclear whether it was also Mr Suleski's case that if the PMP was a matter of discipline, the stress-caused disease wholly or predominantly arose from other employment matters or events such as bullying and harassment as distinct from the stress wholly or predominantly arising from any of the s 5(4) matters. Relevantly, it is unclear what are the non-PMP or non-disciplinary matters that Mr Suleski says caused his stress rather than the matters referred to in s 5(4). It is hinted at in the written closing submissions that the cause of Mr Suleski's stress was the mismanagement of Mr Suleski by his superintendent, Ms Bufton, and that Mr Suleski was subject to bullying and harassment which was the cause of his stress, rather than the PMP or a matter of discipline or expectation of discipline or termination (pars 203(b), 205 - 206, 249, 307, 322 and 369 - 377). Such a submission is consistent with the way in which the injury was particularised in the application which was described as stress and anxiety caused by experiencing bullying and threats made by management during the period 22 August 2013 - 10 December 2013. Therefore, the submission seems to be that the stress did not wholly or predominantly arise from a s 5(4) excluded matter. Rather, it wholly or predominantly arose from workplace bullying and harassment which was not a s 5(4) excluded matter.

13 Therefore, the issues before the arbitrator were:

(a) whether, apart from the PMP meeting on 22 August 2013, there were any other employment-related matters or events, such as bullying and harassment, which were significant contributing factors to the contraction of the disease;

(b) whether the implementation of the PMP at the meeting on 22 August 2013 was discipline, and if it was, whether the stress that caused Mr Suleski's psychiatric disease:

(i) wholly or predominantly arose from a matter mentioned in s 5(4) of the Act, namely discipline or an expectation of discipline; and

(ii) if there was actual discipline (as opposed to an expectation of discipline) whether the discipline was unreasonable and harsh on the part of Pilbara Iron.

1. that Mr Suleski's psychiatric condition wholly or predominantly arose from an excluded matter in s 5(4) being the implementation of the PMP at the meeting [99(a)];
2. that the implementation of the PMP at the meeting on 22 August 2013 was disciplinary [99]. In brief reasons the arbitrator, citing FAI General Insurance Co Limited v Goulding [2004] WASCA 167, found that the PMP meeting amounted to actual discipline; [99(d)];
3. that the actions of Pilbara Iron in implementing the PMP were both unreasonable and harsh [100]:

(i) because each of the reasons given by Pilbara Iron for implementing the PMP were unreasoned and unjustified and therefore unreasonable and amounted to harsh conduct as a justification for implementing the PMP 'against the workers' understandable and steadfast refusal to sign the same'. In so finding, the arbitrator found [101]:

(a) that it was unreasonable for Pilbara Iron not to accept (or to disregard) Mr Suleski's explanations in relation to issuing warnings to subordinates and to instead implement the PMP [100(a)];

(b) that there was no reasonable opportunity for Mr Suleski to complete the role description for transport operator and that it was unreasonable for Pilbara Iron not to accept (or to disregard) Mr Suleski's explanations in relation to the provision of the role description and to instead implement the PMP [100(b)];

(c) that it was unreasonable for Pilbara Iron not to accept (or disregard) Mr Suleski's explanations and instead to implement a PMP in circumstances where [100(c)]:

(i) Mr Suleski had not been provided with any or any adequate leadership training [88(b)];

(ii) Mr Suleski's mid-year performance review was selectively downgraded on Ms Bufton's email instruction [88(c)]; and

(iii) Pilbara Iron departed from its own procedures in managing Mr Suleski and placing him on a PMP instead of a development plan [88(f)].

1. The learned Arbitrator was wrong in law in finding that the actions of the Appellant in implementing a Performance Management Plan (PMP) in respect of the Respondent on 22 August 2013, was the cause of the stress related illness and was harsh and unreasonable.
2. The learned Arbitrator was wrong in law in finding that the injury arose as a consequence of actual disciplinary action and should have found the injury arose as a result of the Respondent's 'expectation of' disciplinary action which is an excluded factor for recovery of payments under Section 5 of the Act.
3. Wrong in law in that he failed to consider properly or at all, whether the discipline as compared to the expectation of discipline, was the whole or predominant cause of the stress related injury, the onus in respect of which lies on the Respondent.
4. Wrong in law in that he ordered ongoing weekly payments in circumstances where there was no evidence of the Respondent's ongoing incapacity and failed thereby to apply the relevant onus of proof which lies on the Respondent to demonstrate such incapacity.
5. Abandoned.
6. Abandoned.
7. Wrong in awarding interest to be paid to the Respondent in respect of the weekly payments when there was no application for same on the part of the Respondent and without giving the Appellant an opportunity to be heard on the matter, particularly in circumstances where the Respondent remained in receipt of payments under an income protection policy.
8. The learned arbitrator was wrong in law:

(a) In applying a subjective test to the determination of causation;

(b) In his application of what he described as the Azmitia perception' in respect of the issue of causation.

16 Grounds 5 and 6 alleged actual or apprehended bias on the part of the arbitrator. Those grounds were formally abandoned by counsel at the resumed hearing of the appeal on 10 April 2017.

17 Mr Suleski has filed a cross appeal the grounds of which are:

1. the arbitrator erred in law in finding that the placing of Mr Suleski on a PMP (or a DP) constituted 'discipline' within the meaning of s 5(4)(a) of the Act; and
2. Mr Suleski's injury was not caused by an 'excluded' matter and Mr Suleski is entitled to compensation by reason of his having suffered an injury within the meaning of s 5 of the Act.

18 Therefore both Pilbara Iron and Mr Suleski allege the arbitrator erred in law by finding that the placing of Mr Suleski on a PMP constituted 'discipline' for the purposes of s 5(4)(a) of the Act.

Section 247 - appeal involves a question of law

19 Section 247(1) of the Act provides that a party may, with leave of the District Court, appeal to the District Court. Pursuant to s 247(2), leave can only be granted if 'a question of law is involved'.

20 To establish that there is a 'question of law' involved it is necessary to show that an error of law or an error of mixed law and fact has occurred. A court or tribunal does not make an error of law merely because the court or tribunal finds facts wrongly or upon a doubtful basis: Catholic Education Office of WA v Granitto [2012] WASCA 266 [53] - [55] (Murphy JA) (with whom Pullin & Newnes JJA agreed); BHP Billiton Iron Ore Pty Ltd v Treby [2017] WADC 6 [52] - [54] and cases cited therein (see also [45] - [51]).

21 In Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 Mason J said (355 - 357):

The question whether there is any evidence of a particular fact is a question of law: McPhee v S Bennett Ltd. (46); Australian Gas Light Co. v Valuer-General (47). Likewise, the question whether a particular inference can be drawn from facts found or agreed is a question of law: Australian Gas Light (47); Hope v. Bathurst City Council (48). This is because, before the inference is drawn, there is the pre1iminary question whether the evidence reasonably admits of different conclusions: Federal Commissioner of Taxation v. Broken Hill South Ltd. (49). So, in the context of judicial review, it has been accepted that the making of findings and the drawing of inferences in the absence of evidence is an error of law: Sinclair v Maryborough Mining Warden (50). But it is said that '[t]here is no error of law simply in making a wrong finding of fact': Waterford v The Commonwealth (51), per Brennan J. Similarly, Menzies J. observed in Reg. v District Court; Ex parte White (52):

'Even if the reasoning whereby the Court reached its conclusion of fact were demonstrably unsound, this would not amount to an error of law on the face of the record. To establish some faulty (e.g. illogical) inference of fact would not disclose an error of law.'

Thus, at common law, according to the Australian authorities, want of logic is not synonymous with error of law. So long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place.

22 Whether facts as found meet a particular statutory definition, or satisfy statutory criteria, involves a question of law: Vetter v Lake Macquarie City Council (2001) 202 CLR 439 [24] - [27] (Gleeson CJ, Gummow & Callinan JJ):

1. Whether facts as found answer a statutory description or satisfy statutory criteria will very frequently be exclusively a question of law. To put the matter another way, indeed, as it was put by Priestley JA in his judgment, whether the facts found by the trial court can support the legal description given to them by the trial court is a question of law. However, not all questions involving mixed questions of law and fact are, or need to be susceptible of one correct answer only. Not infrequently, informed and experienced lawyers will apply different descriptions to a factual situation. That is why the test whether legal criteria have been met has been expressed in language of the kind used by Jordan CJ in The Australian Gas Light Co v Valuer-General:

'[I]f the facts inferred ... from the evidence ... are necessarily within the description of a word or phrase in a statute or necessarily outside that description, a contrary decision is wrong in law.'

1. In his speech in Edwards (Inspector of Taxes) v Bairstow Lord Radcliffe identified an error of law as arising if 'the true and only reasonable conclusion contradicts the determination'. Mason J (with whom Gibbs, Stephen, Murphy and Aickin JJ agreed) discussed the matter comprehensively and stated the law on this topic in this country as follows in Hope v Bathurst City Council:

'Many authorities can be found to sustain the proposition that the question whether facts fully found fall within the provisions of a statutory enactment properly construed is a question of law. One example is the judgment of Fullagar J in Hayes v Federal Commissioner of Taxation, where his Honour quoted the comment of Lord Parker of Waddington in Farmer v Cotton's Trustees, which was adopted by Latham CJ in Commissioner of Taxation v Miller, that where all the material facts are fully found, and the only question is whether the facts are such as to bring the case within the provisions properly construed of some statutory enactment, the question is one of law only. Fullagar J then said':

"... this seems to me to be the only reasonable view. The distinction between the two classes of question is, I think, greatly simplified, if we bear in mind the distinction, so clearly drawn by Wigmore, between the factum probandum (the ultimate fact in issue) and facta probantia (the facts adduced to prove or disprove that ultimate fact). The 'facts' referred to by Lord Parker ... are the facta probantia. Where the factum probandum involves a term used in a statute, the question whether the accepted facta probantia establish that factum probandum will generally - so far as I can see, always - be a question of law."

'However, special considerations apply when we are confronted with a statute which on examination is found to use words according to their common understanding and the question is whether the facts as found fall within these words. Brutus v Cozens was just such a case. The only question raised was whether the appellant's behaviour was 'insulting'. As it was not unreasonable to hold that his behaviour was insulting, the question was one of fact.'

1. Earlier in Williams v Bill Williams Pty Ltd, Mason JA had observed:

'[I]t may happen that the tribunal at first instance is confronted with the task of applying the statutory expression to primary facts in such circumstances that it is reasonably possible to arrive at different conclusions, the question being largely one of degree upon which different minds may take different views. Here, again, it is not possible to conclude that the decision appealed from is erroneous in point of law.'

"The principle has been enunciated that, if different conclusions are reasonably possible, the determination of which is the correct conclusion is a question of fact."

1. In Hope v Bathurst City Council, Mason J pointed out that when it is necessary to engage in a process of construction of the meaning of a word (or phrase) in a statute a question of law will be involved, but that the question may be a mixed one of fact and law. His Honour's reasons make it clear that a question exclusively of law arises, as the respondent sought to argue was the position in this case, if, on the facts found only one conclusion is open.

23 Once an error involving 'a question of law' has been identified the District Court, by s 247(5), is to conduct a 'real review' of the arbitrator's decision: Pacific Industrial Co v Jakovljevic [2008] WASCA 60 [20] - [25] (Wheeler JA); Catholic Education Office of WA v Granitto (Murphy JA) [56] - [57].

24 Section 18 of the Act provides that if an injury to a worker occurs, the employer shall, subject to the Act, pay compensation in accordance with sch 1 of the Act.

25 _'_Injury' is relevantly defined in s 5 of the Act to mean:

...

(c) a disease contracted by a worker in the course of his employment at or away from his place of employment and to which the employment was a contributing factor and contributed to a significant degree; or

...

but does not include a disease caused by stress if the stress wholly or predominantly arises from a matter mentioned in subsection (4) unless the matter is mentioned in paragraph (a) or (b) of that subsection and is unreasonable and harsh on the part of that employer.

26 Section 5(4) of the Act, in turn, relevantly provides:

(4) For the purposes of the definition of injury, the matters are as follows -

(a) the worker's dismissal, retrenchment, demotion, discipline, transfer or redeployment; and

(ii) a decision by the employer in relation to a matter,

27 'Disease' is defined by s 5 as including 'any ... mental aliment, disorder, defect, or morbid condition whether of sudden or gradual development'.

28 Section 5(5) of the Act also provides:

(5) In determining whether the employment contributed, or contributed to a significant degree, to the contraction, recurrence, aggravation or acceleration of a disease for purposes of the definitions of injury and relevant employment, the following shall be taken into account -

(b) the nature of, and particular tasks involved in, the employment; and

(c) the likelihood of the contraction, recurrence, aggravation or acceleration of the disease occurring despite the employment; and

(d) the existence of any hereditary factors in relation to the contraction, recurrence, aggravation or acceleration of the disease; and

(e) matters affecting the worker's health generally; and

(f) activities of the worker not related to the employment.

29 The purpose of the exclusions in s 5(4) is to enable an employer to take reasonable managerial decisions; FAI General Insurance v Goulding (Murray J) [13] - [14]:

1. To this point it would appear to be clear that the policy of the Act, to which its terms give effect, is to extend the concept of compensable disability to any work-caused disease contracted in the course of the employment, whether at or away from the place of employment, provided that a disease caused by stress cannot constitute a compensable disability if the stress itself results from what may be described as the management processes referred to in s 5(4), unless those processes of the employer are seen to be unreasonable and harsh. (This case, of course, requires no consideration of the question whether the word 'and' in that context actually means 'or').
2. It is to be noted, however, that work-related disease which is caused by stress will not be excluded from constituting a compensable disability unless the stress wholly or predominantly arises from a matter mentioned in s 5(4). That subsection, read with the definition of 'disability', would therefore not exclude work-related disease caused by stress arising simply out of the fact that the work itself is stressful.

... The obvious purpose underlying the exclusion is to prevent the bringing of claims for compensation as a consequence of stress-related diseases that wholly or predominantly arise out of specified incidents of the employment relationship which, by their very nature, are particularly stressful, but which are not harsh and unreasonable on the part of the employer.

31 See also Comcare v Martin [2016] HCA 43 [46] which considered similar provisions in the Commonwealth legislation.

32 The onus of proving that a potentially excluded matter (or the expectation of same) is not wholly or predominantly the cause of the stress is on the worker: Catholic Education Office of WA v Granitto [68] - [76] (Murphy JA); O'Leary v Edith Cowan University CM-108/02 [12] - [15].

33 Similarly, the onus of establishing that any discipline was unreasonable and harsh also lies on the worker.

34 In relation to the appeal Mr Suleski submits that the grounds of appeal do not give rise to or involve a question of law and that the grounds of appeal only raises a dispute as to findings of fact made by the arbitrator and therefore do not involve a question of law.

35 In the hearing of the appeal before me both parties accepted that the cause of Mr Suleski's stress was being placed on the PMP at the meeting on 22 August 2013 (notwithstanding that by ground 1 of its amended notice of appeal Pilbara Iron alleges the arbitrator was wrong in law in finding that its action in implementing the PMP was a cause of the stress-related illness). It was also apparently accepted by Mr Suleski at the arbitration hearing that the implementation of the PMP on 22 August 2013 was a significant contributing factor to his stress, as it was accepted that the implementation of the PMP was a central factor in causing the stress (closing submissions pars 369 - 376).

36 Therefore given the issues as defined by the parties the arbitrator was required to determine:

1. What was the cause of Mr Suleski's psychiatric condition, i.e., how was the employment a contributing factor and how did it contribute to a significant degree to the contraction of the disease caused by stress?
2. As it was accepted by the parties that being placed on the PMP was a significant contributing factor to the disease caused by stress, were there other events or incidents in the employment, such as bullying and harassment, which were also contributing factors to the stress related disease? Was there a combination of factors which contributed to the stress?
3. If placing Mr Suleski on the PMP was a significant contributing factor to the contraction of the stress (and, as I have earlier noted, that was each of the parties' positions both at the hearing and on appeal), was the implementation of the PMP 'discipline'?
4. In particular did the psychiatric condition (which the parties accepted was a disease caused by stress) arise from a matter mentioned in s 5(4), specifically 'discipline' in s 5(4)(a), or arise from Mr Suleski's expectation of 'discipline' for the purposes of s 5(4)(c)?
5. If the implementation of the PMP was both a significant contributing factor to the contraction of the stress related psychiatric condition and a matter of discipline, as distinct from an expectation of discipline, did the stress wholly or predominantly arise from that discipline or did the stress wholly or predominantly arise from other events or incidents in the employment which did not constitute discipline, such as bullying and harassment?
6. If the stress wholly or predominantly arose from discipline was the discipline unreasonable and harsh on the part of the employer Pilbara Iron?

37 The arbitrator found that Mr Suleski contracted an injury in the course of his employment (which was a disease caused by stress) and found that the condition wholly or predominantly arose from the PMP implementation meeting on 22 August 2013. However, he also found that the PMP implementation was both unreasonable and harsh. He held [98] - [99]:

1. I have no hesitation in finding (as I do) that the worker contracted a disease in the course of his employment, either in the form of an Adjustment Disorder with consequent Alcohol Abuse disorder (Dr Edwards Smith), or Major Depressive Disorder (Dr Proud), or all of those conditions, which has (or have) rendered the worker totally incapacitated to perform his pre-accident work as a supervisor, and indeed all forms of work involving heavy machinery.
2. As to whether Mr Suleski's psychiatric condition wholly or predominantly arises from an excluded s 5(4) matter, I find that it indeed predominantly arose from the PMP implementation meeting on 22 August 2013, and that the said meeting was in identifiable part a 'disciplinary' measure for the following reasons;

38 Having referred to the medical evidence upon which he based his finding that Mr Suleski's condition wholly or predominantly arose from the PMP implementation meeting on 22 August 2013 he found, at [99(d)], the PMP constituted discipline for the following reasons:

...

(d) the PMP (Exhibit B, pp 40-43) was, in identifiable part, 'disciplinary' and not unlike that described in FAI General Insurance Co v Goulding [2004] WASCA 167 at [48]- [49], [58]. It listed under background details three allegations (failing to complete the role description for transport operator; display of poor leadership; failing to hold team members to account for poor performance or inappropriate behaviour). It then gives examples of what would 'constitute failure to adhere to the plan', with the warning in bold 'consequences of any of the above may result in disciplinary action up to and including the termination of your employment'. This was clearly not purely a training tool, but was more of a probationary exercise with embedded warnings and is indistinguishable from that encountered in FAI v Goulding above. The semantic reference to future 'disciplinary action' does not distract me into believing or finding that this PMP had zero disciplinary content or context in itself, especially given the three background details described above.

39 He explained at [100] his reasons for finding the PMP implementation was unreasonable and harsh:

...

(a) In [88(a)], I have summarised that that (sic) the first background factor to the PMP (failing to issue warnings to subordinates) gave rise to the worker's Azmitia perception that he was being unfairly targeted because I accepted his evidence of the explanations he gave. For the avoidance of doubt, I find that it was unreasonable for the employer not to accept (or disregard) the worker's explanations given but to instead implement the disciplinary PMP;

(b) As for the alleged failure to complete the role description for transport operator, I have found at [88(e)] that there was no reasonable opportunity to do so. For the avoidance of doubt, I find that it was unreasonable for the employer not to accept (or disregard) the worker's explanations given but to instead implement the disciplinary PMP;

(c) As for the third justification for the PMP (display of poor leadership), I have made relevant findings at [88(b)], [88(c)] and [88(f)]. For the avoidance of doubt, I find that it was unreasonable for the employer not to accept (or disregard) the worker's explanations given but to instead implement the disciplinary PMP.

1. Not only do each of these matters listed at [100(a)-(c)] constitute unreasoned/unjustified, or inadequately reasoned/justified actions/behaviours and are hence 'unreasonable' within the meaning of the statute, they individually and collectively also amount to 'harsh' conduct when used as base for implementing an identifiably disciplinary probationary process (i.e. the PMP plan), against the worker's understandable and steadfast refusal to sign the same. Of course, the fact that it was un-executed made no difference to the employer's implementation of the process.

41 The arbitrator then, at [102] - [103], revisits causation having regard to the factors set out in s 5(5).

42 The arbitrator found that Mr Suleski was totally unfit for work since his last attendance at work and continuing [104].

The so-called 'Azmitia' worker's perception - ground 8 amended notice of appeal

43 It is convenient to first address ground 8 of the amended notice of appeal.

44 Throughout his reasons the arbitrator has referred to the worker's 'Azmitia' perception [46], [50], [57], 59], [60], [62], [74]. At [57] of his reasons the arbitrator found:

1. There is another grievance about the comparative unfairness (in the worker's perception) about the way he was treated ... When one compares Ms Bufton's handwritten assessments of the worker and Moylan (Exhibit 2A, pages 33-37; Exhibit B, pages 31 - 37), it appears (and I find) that the worker in fact 'meets expectation' on GP 2. It also shows (and I find) that Moylan did not meet significantly more of the GP1 goals than the worker.

1. Ross Moylan was not called to give evidence and I find that the worker's Azmitia perception that he was being unfairly singled out for the PMP on the basis of his GP1 and GP2 when Moylan had demonstrably lower compliance and yet was not placed on a PMP and had his score maintained at 100% whilst the worker had his downgraded to 70%, as also being reasonably corroborated by Mr Hood's unchallenged evidence of the relative strengths of the worker as a supervisor.

46 The arbitrator later explains what he means by an Azmitia perception in the following terms [86]:

1. At the heart of resolving this dispute, lies the proper application of what was said by his Honour McCann DCJ in Department of Education v Azmitia [2014] WADC 85 at [16]. Once 'objectively proven facts' are (on a balance of probabilities) proven to exist, then if it is found that the worker's subjective perception of these facts did (on a balance of probabilities) in fact cause the stress, then the stress claim will be compensable without needing to prove the reasonableness of the perception itself. It is in this sense that throughout these reasons I have referred to an Azmitia 'perception' or 'mis-perception, for it matters not (in a causation sense) whether the worker's perception is a completely accurate reflection of objective reality - the existence of some facts could be sufficient to make compensable even a subjective mis-perception leading to psychological injury. (emphasis added)

47 After, at [87] referring to 'reality test' in Wiegand v Comcare, the arbitrator at [88] states:

1. I have already found that the worker has proven sufficiently objective facts and considerations in an Azmitia sense that could arguably support an ultimate finding that his perceptions or misperceptions of being unfairly treated or targeted at the workplace significantly contributed to his psychiatric disorder in a s.5(5) and Mokta v Metro Meat International ([2005] WASCA 143) sense.

48 The arbitrator then purports to summarise the findings he says he has already made 'that could arguably support' a finding that Mr Suleski's 'perceptions or misperceptions of being unfairly treated' significantly contributed to his psychiatric disorder.

49 I understand his reference to Mokta v Metro Meat International [2005] WASCA 143 to be a reference to the observations of Pullin JA (Steytler P & Wheeler JA) [39]:

In my opinion the word "significant" where used in the definition of 'disability' means 'not insignificant'. In other words, the contribution must be material. In tort actions where the issue is whether an injury was caused by a negligent act or omission, the inquiry is whether the acts or omissions materially contributed to the injury or damage. See Allianz Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; (2005) 215 ALR 385 at [54] and see also Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 at [60] - [61] and [106]; Chappel v Hart (1998) 195 CLR 232 at [8] and [27]. A contribution is 'material' if it is not negligible: Western Australia v Watson [1990] WAR 248 at 286. In short, my opinion is that there is no difference between a 'significant' contribution and a 'material' contribution.

50 At [88(c)] the arbitrator reiterated his finding that Mr Suleski's mid-year review was selectively downgraded without any explanation as to why Mr Moylan's review was not similarly downgraded contributed to Mr Suleski's perception he was being treated unfairly. Although, as I will later observe, it is unclear for what purpose the arbitrator made findings that Mr Suleski perceived he was being unfairly treated, it seems the arbitrator may have found that Mr Suleski's perception was causally related to the stress suffered by him in that the perception significantly contributed to Mr Suleski's psychiatric condition but does not explain how. The arbitrator explained:

...

(c) the worker's mid-year review which was selectively downgraded on Ms Bufton's email instruction to 70% (without, I interpolate, any explanation why this was not similarly done for Moylan) in the circumstances described at [57] and [74], could logically (and did, as I find in fact) contribute, in an Azmitia sense, to the worker feeling or perceiving that he was being unfairly targeted, singled-out or selectively discriminated against ...

51 However, although the arbitrator has certainly made findings as to Mr Suleski's perception that he was being unfairly treated at work, the arbitrator has not made any findings that any perception of being unfairly treated has significantly contributed to a psychiatric disorder, or explained how a finding of a perception of being unfairly treated at work is relevant to a finding that that perception significantly contributed to Mr Suleski's psychiatric condition. Further, after he summarises his findings regarding Mr Suleski's so-called Azmitia perception, he does not make any finding that the perception significantly contributed to Mr Suleski's psychiatric condition. The arbitrator does not explain the relevance or significance of his findings summarised at [88]. He does not explain why in his reasons he has spent a considerable amount of time considering and addressing the so-called Azmitia perception and how that was relevant to the issues he was required to determine. Having, at [86], stated 'at the heart of resolving this dispute lies the proper application' of Azmitia the arbitrator fails to explain what is the issue he determines by a proper application of Azmitia or make any findings or determination by reference to Azmitia which finally determines the application for worker's compensation. Nowhere in his reasons does he expressly find that Mr Suleski's perception of being unfairly treated significantly contributed to his injury. Nowhere in his reasons does he explain the relevance of his findings at [88].

52 Even if it is accepted that the arbitrator has at [88] found that Mr Suleski's perception he was being treated unfairly significantly contributed to his injury, the finding goes nowhere. When the arbitrator at [89] - [97] considers the medical evidence he does not revisit his findings at [88] and relate those findings to the medical evidence. When he (at [99]) finds that Mr Suleski's psychiatric condition wholly or predominantly arose from the PMP implementation meeting on 22 August 2013, which was discipline and therefore an excluded s 5(4) matter, he does not revisit the findings in [88] as you might have expected him to, given the considerable amount of time he has spent in his reasons in considering Mr Suleski's perception he was unfairly treated, and consider whether those findings have any relevance to his ultimate finding that Mr Suleski's injury, the disease, (which the arbitrator found was an adjustment disorder or major depressive disorder) wholly or predominantly arose from the PMP implementation on 22 August 2013. The arbitrator has failed to make any findings as to what symptoms were experienced by Mr Suleski or as to the onset of the symptoms and how they arose from his employment and how they are relevant to the disease he finds (at [98]) Mr Suleski contracted in the course of his employment. He does not make any findings that Mr Suleski's perceptions that he was unfairly treated are related to or relevant to the disease Mr Suleski contracted in the course of his employment. Nor does he refer to or rely on his findings regarding Mr Suleski's perception that he was unfairly treated in concluding that Mr Suleski's psychiatric condition predominantly arose from the PMP implementation meeting on 22 August 2013. Therefore, the arbitrator's finding as to Mr Suleski's perception about being unfairly treated would not appear to have played any part in the arbitrator's finding that Mr Suleski's psychiatric condition predominantly arose from the PMP meeting on 22 August 2013. Accordingly, despite having at [86] stated that the proper application of Azmitia lay at the heart of resolving the dispute, the arbitrator would not appear to have relied upon Azmitia or any finding regarding Mr Suleski's perception of being unfairly treated in ultimately determining that the psychiatric condition predominantly arose from the PMP implementation meeting.

53 Although it is unclear, it seems to me the fairest reading of the arbitrator's reasons is that he has found that the PMP implementation and Mr Suleski's perception he was unfairly treated were each significant contributing factors to Mr Suleski's disease but the PMP implementation was the predominant contributing factor. At [99(a)] the arbitrator accepts the opinion of Dr Edwards-Smith that the PMP implementation was the most significant factor causing Mr Suleski's psychiatric condition and that it overwhelmingly caused or resulted in Mr Suleski's psychiatric condition. This analysis is consistent with McPherson v State Print (Steytler J) (8).

54 I will shortly consider in more detail the principle of Azmitia but it is sufficient for present purposes to state that Azmitia is only relevant if the issue to be determined is whether the employment was a significant contributing factor to the contraction of a disease. In the circumstances of this case, where the employer accepted the employment was a significant contributing factor to the contraction of the disease and the issue was how the employment significantly contributed to the contraction of the disease and whether it arose from a matter of discipline or an expectation of discipline, the application of Azmitia had a limited, if any, role to play in the determination of those issues. However, because the arbitrator's findings in reliance upon Azmitia were (apparently) not relied upon by the arbitrator in finding that the psychiatric condition predominantly arose from the PMP meeting on 22 August 2013, any reliance upon Azmitia, whether it is erroneous or not, does not give rise to any error or question of law in relation to the finding that the psychiatric condition predominantly arose from the PMP meeting. Further, any findings in reliance upon Azmitia were not relied upon by the arbitrator for his finding that the PMP implementation was a matter of discipline.

Department of Education v Azmitia [2014] WADC 85

55 I now turn to consider the principle for which Azmitia is authority.

56 At [87] the arbitrator referred to the 'reality test' in Wiegand v Comcare Australia [2002] FCA 1464 [24] as considered by McCann DCJ in Department of Education v Azmitia [2014] WADC 85. (An appeal from the decision of McCann DCJ was dismissed by the Court of Appeal in Department of Education v Azmitia [2015] WASCA 246. The grounds of appeal focused on the arbitrator's finding that the worker was totally incapacitated for work and McCann DCJ's conclusion that the finding was open on the evidence and involved no appealable error. The appeal did not raise any issue concerning the correct test of causation in a stress claim). Although the arbitrator refers to McCann DCJ's observations at [58] - [60], the paragraphs he has cited in his reasons are not from Azmitia. They are taken from McCann DCJ's judgment in Pedley v West Coast College of TAFE (Unreported, C21-2006 (McCann DCJ) 8 November 2006) which is cited at [16] in Azmitia.

57 In Azmitia McCann DCJ held [16], [19]:

1. A stress claim is compensable if it is caused by a worker's subjective reaction to objectively proven facts. It is not necessary for a worker to prove that his or her subjective perception of proven facts was reasonable. (See Wiegand v Comcare [2002] FCA 1464; Gallin v Central West Coast College of TAFE [2006] CM-21/2003; Pedley v West Coast College of TAFE C21 - 2006 [26], [50] - [51]).

1. Thus, in this case, the onus lay on the respondent to prove, first, that she suffered a disease caused by her perception of proven facts and, second, that by reason of the disease she was totally incapacitated for work in the sense that she was wholly unfit to return to her employment as a primary school teacher in any capacity.

58 Wiegand v Comcare Australia, concerned an appeal to the Federal Court from a decision of the Administrative Appeals Tribunal which held that Comcare was not liable to pay compensation to the applicant in respect of a claim for 'major depression'. The circumstances of that case, as von Doussa J noted at [14], were that the psychiatrists appeared to be in substantial agreement that all of Mr Wiegand's difficulties could not be attributed to his employment and that the predominant factor in his depressive disorder related to his basic personality, but that conclusion did not answer the question of whether, by reference to the meaning of the definition of 'disease' in the Safety, Rehabilitation and Compensation Act 1988 (Cth), Mr Wiegand was incapacitated by an aggravation of the disease that was contributed to in a material degree by his employment.

59 At [17] von Doussa J noted the evidence of a psychiatrist at the trial who said it was necessary to consider whether or not Mr Wiegand's perception of the workplace was in fact reality based or whether it was only determined by his basic personality. The psychiatrist was of the opinion that Mr Wiegand's presentation bordered on the paranoid but whether or not his perception was definitely paranoid 'depends on the reality or otherwise of his claims about workplace'.

60 In criticising the reasoning of the tribunal for failing to consider whether the depressive disorder suffered by Mr Wiegand met the statutory definition of 'disease' by being 'an aliment or aggravation that was contributed to in a material degree by the employee's employment ...', von Doussa said [20]:

... To ask whether the upset in the work environment was the cause of Mr Wiegand's 'condition' is to ask a question that departs from the definition of disease, and in particular a wrong question which seeks to identify a single real cause of the condition. It is not a test which recognises that an injury, being a disease, will be compensable if it is an aggravation of an ailment to which the employment was merely one of a number of factors that contributed in a material degree.

... It is not to the point to ask whether the vulnerability is the result of constitutional factors rather than external factors. It is not the vulnerability that constitutes or may constitute an aggravation. The relevant question which arises from the definition of disease is whether a stressor or stressors to which Mr Wiegand is vulnerable happened, and whether the happening was contributed to in a material degree by his employment.

... All that is required is that the employee is exposed to some incident or state of affairs in the course of the performance of his duties and to which he would not otherwise have been exposed, which is a contributing factor to the ailment or an aggravation of the ailment suffered by the employee. A perception held by the employee will meet a 'reality' test for the purpose of the definition of disease if it is a perception about an incident or state of affairs that actually happened.

63 Therefore Wiegand must be read in the context of the psychiatric evidence which was presented in that case where the psychiatrist was referring to the worker's perception of the workplace and whether it was in fact reality based. Wiegand was concerned with a pre-existing disease of paranoia whereas Mr Suleski was diagnosed with an adjustment disorder or depressive disorder which it was accepted was contracted by Mr Suleski in the course of his employment. The main issue in Wiegand was whether the employment was a contributing factor to an aggravation of the disease which is to be contrasted with the situation here where the parties accepted the employment was a contributing factor to the contraction of the disease and satisfied the definition of 'injury' in par (c), the issue here essentially being whether there were a number of employment related factors that significantly contributed to the disease, and, if the PMP implementation was a matter of discipline, whether it was the predominant employment factor which was the cause of the stress-related illness. The references by von Doussa J to the worker's perception and whether it will meet a reality test for the purposes of the definition of disease is in the context of the psychiatric evidence adduced in that case and the legislative provisions which applied where the main issue was whether the employment contributed at all to an aggravation of the underlying disease. It is not a test of general or universal application. It is certainly not a test which applies universally in determining whether an injury has occurred for the purposes of par (c) in the definition of 'injury' in s 5 involving a disease caused by stress.

64 McCann DCJ in Azmitia in the passages I have cited states no more than that to prove an injury within the meaning of pars (c) or (d), i.e., a disease has been suffered, the worker must prove the employment was a contributing factor and contributed to a significant degree. In other words, in the case of a disease caused by stress, there must be something associated with the employment which has significantly contributed to the stress. So in the case of a person who might suffer from paranoia which causes stress, there must be something at work which has also contributed, to a significant degree, to that stress rather than the stress arising from the underlying paranoia. There must be some incident or event or state of affairs to which a worker was exposed or which he experienced during the course of his employment which significantly contributed to the stress. As von Doussa J observed, there may be a number of factors which contributed to the stress, both employment and non-employment related. If a person's pre-existing paranoia makes him or her more vulnerable or susceptible to suffering stress when faced with certain circumstances, providing those circumstances in fact occurred, the employment will have caused, in the sense that it was a contributing factor and contributed to a significant degree, to the stress even though a person who is not suffering paranoia might not, when faced with the same circumstances, have suffered stress.

65 Similar issues were considered in Carson v Comcare [1998] AATA 644. Dr Carson alleged that he suffered stress and depression which he attributed to victimisation and harassment by his superiors. Dr Carson suffered from a pre-existing paranoid personality disorder or paranoid delusional condition. The employer had concerns about Dr Carson's work performance and a process, called a Performance Management Scheme, was instituted to deal with the employer's concerns about work performance. Similar to Mr Suleski's circumstances, Dr Carson felt he was being victimised and that both the process of how he was managed and how the employer rated his performance were unfair. Dr Carson perceived he had a conflict with his superior who was treating him unfairly. The issue between the parties concerned the cause of Dr Carson's incapacity.

66 The medical evidence established that Dr Carson suffered depression. One of the doctors attributed the condition to Dr Carson's perception of an ongoing conflict with a superior and his perception that the inefficiency procedure was designed to bring about his dismissal. Another doctor did not disagree that Dr Carson's depression was related to his perception of the work situation but also considered that Dr Carson's perceptions were due to his paranoid personality disorder rather than to the reality of the workplace. The tribunal found [23]:

... Even on that view, the events at work, and in particular the inefficiency procedures contributed in a material degree to the ailment. As Professor Goldney observed in his cross-examination, the formal inefficiency procedures, coupled with the prospect of dismissal upon failure, would be threatening to anybody, and even more threatening and likely to precipitate depression in someone who had a paranoid personality.

67 Allowing for the different statutory definition in the Commonwealth legislation, which requires the employment to be a contributing factor in a 'material' degree as opposed to the definition in par (c) by which the employment must contribute to a 'significant' degree, (although as explained by Pullin JA in Mokta v Metro Meat International [39] referred to at [49] above, there is no difference between a 'significant contribution' and a 'material contribution') the correct test of causation is as explained by von Doussa J at [15] - [17]:

1. In Favelle Mort Limited v Murray [1976] HCA 13; (1976) 133 CLR 580 at 598 Mason J said in relation to the definition of 'injury' that appeared in s 6 of the Workers Compensation Act 1926 (NSW) that the requirement suggested by the words 'to which the employment was a contributing factor' was not as stringent as that suggested by the concept 'arising out of' the employment. His Honour said that all that needs to be shown is that the employment contributes to the injury, not that it is the real, the effective or the proximate cause of the injury. Given the definitions of 'injury' and 'disease' in the Act, it is at the least arguable that the requirement that the employment 'contributed to in a material degree' an ailment or aggravation is a less stringent requirement than that an injury or an aggravation of an injury arose out of the employment. The significance of the addition of the words 'in a material degree' to the requirement that the employment contributes to the ailment was considered by a Full Court of the Federal Court in Treloar v Australian Telecommunications Commission [1990] FCA 511; (1990) 97 ALR 321. Although that decision concerned the definition of disease in the Compensation, (Commonwealth Government Employees) Act 1971 (Cth) it follows from the decision that employment will contribute in a material degree to an ailment or an aggravation of an ailment if it is established that features of the employment in fact and in truth contributed to the condition complained of. All that is required is that the relevant aspects of the employment add their measure to the creation of the condition, or its aggravation. 'They must, in truth, be part of the cause. If they are not, then they do not 'contribute' ' (at 328).
2. As Dr Carson is entitled to succeed if on 24 January 1995 he suffered an injury, namely a disease being an ailment or an aggravation of an ailment that was contributed to in a material degree by his employment, that is the question which the Tribunal should address.
3. The legal concept of causation when applied in the field of personal injury, including workers compensation, takes the person injured as he or she is found, with all dispositions and susceptibilities whatever they may be: see Mason JA as he then was in Migge v Wormald Bros Industries Limited [1972] 2 NSWLR 29 at 44 whose judgment was upheld by the High Court: (1973) 47 ALJR 236. An example, helpful in this case, is to be found in Federal Broom Co Pty Ltd v Semlich [1964] HCA 34; (1964) 110 CLR 626. The facts of that case are succinctly summarised in a headnote: a worker with a history of functional mental illness predisposing her to delusions sustained a muscular strain in the course of her work. She sought workers compensation in respect of a continuing incapacity resulting from a delusional condition following upon the physical injury. At 641 Windeyer J said:

'I pass then to the next, and I think more difficult, question, was this aggravation or deterioration contributed to by her employment? This requirement of the Act is not satisfied by showing only that a worker suffering from some disease would or might have suffered less severely if he had not been employed at all. When the Act speaks of `the employment' as a contributing factor it refers not to the fact of being employed, but to what the worker in fact does in his employment. The contributing factor must in my opinion be either some event or occurrence in the course of the employment or some characteristic of the work performed or the conditions in which it was performed. In this case it was said that the employment was a contributing factor in the worsening of the disease, because the applicant focussed her delusions of pain and discomfort upon her right side which she believed she had hurt when lifting a tea chest in the course of her work. A minor physical strain she magnified in her irrational imagination into a serious and continuing derangement of her internal organs. The incident directed, or re-directed her hypochondriacal attention to her abdominal muscles ...

The question involved is difficult. Can the event to which a disordered mind irrationally attributes physical suffering, that is real to the patient but delusional, be properly called a contributing factor? Ordinary concepts of cause and consequence are perhaps not applicable. Yet it seems to me that the incident which precipitated or stimulated, however irrationally, the worsening of her condition could be regarded as a factor contributing to it. It was said that in any event she might have broken down sooner or later: that some other incident might have provided a focus for her delusions. But it was this event at work that in fact did so. (emphasis added)

68 Relevant to the circumstances of Mr Suleski's claim, von Doussa J found [24] - [26]:

1. It is not suggested by the respondent that the proviso to the definition of injury applies so as to exclude the ailment suffered by Dr Carson from the definition of 'injury'. The inefficiency procedure did not constitute disciplinary action, nor did it relate to a failure by Dr Carson to obtain a promotion, transfer, or benefit in connection with his employment. On the contrary, it was a procedure undertaken to ascertain if he should be dismissed from his employment on the ground that he was not able to effectively discharge the requirements of his position.
2. The Tribunal finds that the evidence establishes a clear case of Dr Carson suffering injury, namely a disease constituted by an ailment or an aggravation of an ailment that was contributed to in a material degree, which led to incapacity on 24 January 1995.
3. It is not necessary to support that conclusion to investigate the objective reality of the complaints of harassment and victimisation made by Dr Carson. Indeed, even if it were possible to satisfactorily reach conclusions on those issues after a thorough investigation of the allegations and counter allegations, that would not necessarily answer the important points made by Dr Le Page, namely that it is possible to have conflicts between a sensitive person on the one hand and assertive persons on the other hand which give rise to feelings of persecution by the sensitive person which do not justify a diagnosis of a paranoid personality disorder.

69 Therefore, a worker must point to some event or occurrence in the course of the employment which was a contributing factor to the contraction of the disease and without which the disease would not have been contracted. In Mr Suleski's case the event or occurrence in the course of the employment which was the significant contributing factor to the contraction of his disease was the implementation of the PMP.

70 I will return later when considering whether the PMP was discipline, to the relevance of the finding in Carson that the inefficiency procedure did not constitute disciplinary action.

71 Counsel for Pilbara Iron submitted that the decision of the High Court in Comcare v Martin [46] is authority for the proposition that for a worker to succeed in a claim for a stress-related disease arising from an administrative decision or action, the court must consider objectively whether the administrative decision or action could reasonably be the cause of a disease, that is, whether a person of normal fortitude would have suffered stress in the circumstances. It was further submitted that Comcare v Martin is authority for the proposition that in order for a worker to succeed in the claim for stress, the worker must establish that objectively his response to the administrative decision or action was reasonable rather than simply whether his subjective response, which might be unreasonable, caused the stress.

72 In Comcare v Martin the High Court considered similar provisions in the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2007 (Cth) to s 5(4) of the Act. Section 5A provided:

but does not include a disease ... suffered as a result of reasonable administrative action taken in a reasonable manner in respect of the employee's employment.

(2) For the purposes of subsection (1) and without limiting that subsection, reasonable administrative action is taken to include the following:

(f) anything reasonable done in connection with the employee's failure to obtain a promotion, reclassification, transfer or benefit, or to retain a benefit, in connection with his or her employment.

1. Causation in a legal context is always purposive. The application of a causal term in a statutory provision is always to be determined by reference to the statutory text construed and applied in its statutory context in a manner which best effects its statutory purpose ...

74 Referring to s 5A (which is a similar exclusory provision as s 5(4)) in the Commonwealth legislation, the court said [45] - [48]:

1. When the exclusionary phrase is so read, it becomes apparent that an employee has suffered a disease 'as a result of' administrative action if the administrative action is a cause in fact of the disease which the employee has suffered. The administrative action need not be the sole cause. There may be multiple causes, some of which might even be related to other aspects of the employee's employment. What is necessary is that the taking of the administrative action is an event without which the employee's ailment or aggravation would not have been a disease: it would not have been contributed to, to a significant degree, by the employee's employment.
2. That reading conforms to the purpose of the exclusion. The purpose was described in the explanatory memorandum to the Bill for the Amending Act as being to 'ensure that the wide range of legitimate human resource management actions, when undertaken in a reasonable manner, do not give rise to eligibility for workers' compensation' and as including, in particular, to prevent claims 'being used to obstruct legitimate management action by excluding claims where an injury (usually a psychological injury) has arisen as a result of' such action. The taking of administrative action in respect of an employee's employment was in that way sought to be insulated from need for concern about the psychological effect of the decision on the employee. This purpose would be defeated if the operation of the exclusion were dependent upon the subjective psychological drivers of the employee's reaction.
3. Having regard to the text and structure of ss 5A and 5B, and consistently with the statutory purpose of the exclusion in s 5A(1), what is required to meet the causal connection connoted by the exclusionary phrase in s 5A(1) in its application to a disease within s 5A(1)(a) is therefore that the employee would not have suffered that disease, as defined by s 5B(1), if the administrative action had not been taken. That is to say, the causal connection is met if, without the taking of the administrative action, the employee would not have suffered the ailment or aggravation that was contributed to, to a significant degree, by the employee's employment.
4. The causal connection giving rise to the exclusion from the definition of injury is met where the disease suffered by the employee is a mental condition or an aggravation of a mental condition suffered by the employee in reaction to a failure to obtain promotion, including in reaction to a perceived consequence of that failure to obtain promotion. The nature of the perceived consequence - whether personal or professional, direct or indirect, real or imagined - is beside the point.

75 I reject counsel's submission that the test for causation in a claim for stress arising from an administrative decision or action is whether objectively a reasonable person of normal fortitude would suffer stress. It does not, with respect, correctly state the law. Comcare v Martin is not authority for that proposition. The High Court makes it clear at [47] that the causal connection is met if without the taking of the administrative action the worker would not have suffered the disease. That is, the stress-related disease was contributed to, to a significant degree, by the employment. However, by reference to the statutory definition of 'injury' and 'reasonable administrative action' in s 5A of the Commonwealth legislation if the disease is suffered as a result of 'reasonable administrative action' taken in a reasonable manner, the disease is excluded from the definition of injury. So a reaction by a worker to 'reasonable administrative action' taken by the employer, although contributed to, to a significant degree, by the employment, is excluded. Again, as the High Court makes clear at [48]:

... The nature of the perceived consequence - whether personal or professional, direct or indirect, real or imagined - is beside the point.

76 In other words whatever the worker's reaction, whether it be reasonable or unreasonable, real or imagined, or whether a person of normal fortitude would have suffered stress in the same circumstances, or whether the worker's perceptions were reasonable is not relevant. If there is an event in the employment which significantly contributed to stress suffered by a worker, the worker will have established the necessary casual connection but if the stress was caused by an excluded matter the worker is not entitled to compensation. If a person is more vulnerable to stress than a person of so-called normal fortitude, the employment remains a contributing factor to that stress. If the stress-related disease would not have been suffered but for the employment, that is, but for the employer taking the type of action referred to in s 5(4) the employment would have significantly contributed to the contraction of the disease. To prove the employment contributed to the contraction of a disease a worker does not have to prove that objectively his response to the employer's action was reasonable or that a person of normal fortitude would have suffered the same reaction.

77 Turning then to the circumstances of Mr Suleski, it is clear from all of the evidence that he strongly disagreed with the decision of Pilbara Iron to place him on the PMP. He regarded himself as a long-serving employee who had performed his duties well and diligently. He took exception to how his supervisor, Ms Bufton, criticised and dealt with his work performance. He regarded his work performance as good. He felt the action taken by Ms Bufton, especially the action to place him on the PMP, was unjustified. He felt he was unfairly dealt with. His complaints about bullying and harassment and being unfairly treated are in my view his reaction to being placed on the PMP with which he strongly disagreed. He felt that if any action must be taken be should be dealt with by being placed on a development plan rather than the PMP. That is why he refused to sign the PMP. He felt the employer was not justified in placing him on the PMP.

78 That history is consistent with the history recorded by the doctors and psychologists in their reports. It is that history that the doctors and psychologists relied upon in concluding that it was the action of placing Mr Suleski on the PMP which was the cause of the stress, or in terms of the definition of 'injury', a significant contributing factor to the disease which was caused by stress and that the stress predominantly arose from that action. Whether Mr Suleski's perception that he was treated unfairly was reasonable or unreasonable, it is clear that perception was a reaction to the decision by Pilbara Iron to place him on the PMP. If the PMP is not an excluded matter, relevantly is not discipline, Mr Suleski will have established his employment contributed to a significant degree to the contraction of the disease and will be entitled to compensation. If the PMP is discipline he will not have suffered an injury because the disease is excluded from the definition of injury unless the discipline is unreasonable and harsh on the part of the employer.

79 This analysis reinforces my view that Azmitia had no application or part to play in the circumstances of this case. Azmitia is concerned with a test of causation, which is uncontroversial, where the issue is whether the employment was a significant contributing factor to the contraction of a disease. That was not the issue here. If the reason for considering what was Mr Suleski's perception and for finding that his perception was that he was treated unfairly was for the purpose of determining whether there were employment factors other than the implementation of the PMP which were contributing factors and contributed to a significant degree to the contraction of the disease (and as I have explained it is unclear what was the purpose for considering what was Mr Suleski's perception) it was unnecessary to consider that matter because Mr Suleski's perception only arose from the fact of the implementation of the PMP. It is clear from the evidence, particularly the medical evidence, that the disease suffered by Mr Suleski would not have been suffered if he had not been placed on the PMP. There was no suggestion that any other incident or event within the employment or action on the part of the employer, unrelated to the decision to place Mr Suleski on the PMP, was a significant contributing factor to the disease.

80 In her report Dr Edwards-Smith defines her diagnosis of an adjustment disorder by reference to the criteria being met in DSM-VI attached to her report. The criteria read:

1. The development of emotional or behavioural symptoms in response to an identifiable stressor(s) occurring within 3 months of the onset of the stressor(s)
2. These symptoms or behaviours are clinically significant, as evidenced by one or both of the following:
   1. Marked distress that is out of proportion to the severity or intensity of the stressor, taking into account the external context of the cultural factors that might influence symptom severity and presentation. (emphasis added)

81 Therefore by its very nature the disease is not a disease a person of normal fortitude would have suffered. Accordingly, if the submission of Pilbara Iron was correct it would mean that a person diagnosed as suffering from an adjustment disorder would not be able to prove the employment was a significant contributing factor to the contraction of the disease because if his reaction was disproportionate, it was objectively unreasonable.

Mr Suleski's perception of being unfairly treated

82 Also throughout his reasons the arbitrator refers to Mr Suleski's perception that he was being unfairly treated by characterising the perception as 'the workers Azmitia perception'.

1. My impression of Gerald Foo's evidence was that he was a sophisticated manager and gave his evidence in a precise if not measured way. On balance, I accept his evidence that he had no actual favouritism for James Lamb and the worker's belief that Lamb was Foo's 'snitch' was not objectively correct; that is not to say that there is no basis for the worker's perception in a Department of Education v Azmitia ([2014] WADC 85) sense.

1. The matters canvassed at [49] above also support a finding that the worker's Azmitia perception that Mr Foo was being selectively harsh or unreasonable towards him, or that Mr Foo was a cog within that systematic process. I will later evaluate all the other instances and events which I find support the worker's Azmitia perception that he was being treated unfairly.

1. ... The worker also explained (which explanation I accept and so find) that in a relevant time period when Ms Bufton was employed, there were more than five safety incidents involving other supervisors' teams, yet he (the worker) was 'singled out' by Ms Bufton (which I understood to mean that he was the only supervisor compelled to undertake a PMP) for only one safety incident involving his team. He produced a printout for the period 5 February to 29 May 2013 which supported his observation (Exhibit 2A, page 50), and I accept his evidence which I find also added to his Azmitia perception of being unfairly singled out, noting again that he was not specifically cross examined on his explanation.

1. In the PMP, the worker was also criticised for failing to prepare a position description for the Transport Operator role regardless of follow up emails and examples provided to assist him in doing so (Exhibit B, page 40). The worker explained that Ms Bufton first sent him an email on 18 July 2013 making that request, but that was the last day of his shift. He then returned to work on 24 July 2013 for one day, before going off sick between 25 July and 28 July 2013. Between 29 July and 1 August 2013 he was on rostered days off (see Exhibit C) and between 2 August and 6 August 2013 he was on annual leave. Again between 7 August and 11 August 2013, he was on rostered days off and returned to work on 12 August 2013 to receive the email from Ms Bufton referred to earlier (Exhibit B, page 39) which also complained of that failure to develop the transport operator role description. I find that this criticism of the worker and the employer's partial justification for the PMP was unfair, and has also contributed to the worker's Azmitia perception. I note that the worker was also not specifically challenged on his explanation.

1. On the other hand, the Ross Beeton incident which clearly significantly upset the worker (and which Beeton himself reportedly expressed discomfort with), whilst not found to have amounted to actual 'bullying or harassment' of the worker by Ms Bufton, was, I find, another significant event that fostered the worker's Azmitia perception of being unfairly treated. It was described in the speak out report as something which 'could have reasonably been interpreted' by the worker as 'inappropriate' and that it would have been 'more preferable' for Ms Bufton to have used a 'different choice of words' so that the worker might then not have misinterpreted her intentions (Exhibit 2A, pages 16, 23).

88 When the arbitrator keeps referring to Mr Suleski's perception of whether he had been treated unfairly, as I have earlier observed, it appears it was in the context of determining what was the cause of Mr Suleski's stress-related disease and whether the employment was a contributing factor. That is, what were the contributing factors to the stress arising from the employment which contributed to a significant degree. However, in circumstances where it was accepted by both parties that the employment was a significant contributing factor to Mr Suleski's stress, Azmitia, which was concerned with causation, was not relevant. Further, having found Mr Suleski contracted a disease in the course of his employment, either in the form of an adjustment disorder or major depressive disorder [98], which arose from the PMP [99], which was disciplinary, Mr Suleski's perception of whether he was treated unfairly was not relevant to the issues to be determined. Both Azmitia and Wiegand were concerned with whether the worker's employment was a contributing factor to his stress. That is, those cases are only relevant if the issue is whether the stress was contributed to by the employment, that is, whether the employment was a contributing factor. However, in this case there was no such issue. Once the issue was narrowed or confined in the way it was by the parties, where it was accepted the employment was a significant contributing factor, arising out of Mr Suleski being placed on the PMP, whether an injury, a stress-related disease, occurred was not an issue and Azmitia was not relevant and had no application. Its only relevance might have been if it was an issue that the implementation of the PMP was not a contributing factor that contributed to a significant degree and if the issue was whether the cause of the stress was related to something else, for example, workplace bullying and harassment or being unfairly treated.

89 The parties, having accepted, and the arbitrator having found, that the stress arose from the PMP, that is, that the employment was a contributing factor and contributed to a significant degree, the worker's perception of whether he had been treated unfairly, and whether he had in fact been treated unfairly, was simply not relevant in relation to the issue to be determined, which was how the PMP was to be characterised. That is, whether the PMP implementation constituted discipline for the purpose of s 5(4)(a), and if it did whether any disease suffered by Mr Suleski was caused by stress and if it did whether the stress wholly or predominantly arose from the discipline. Even were it Mr Suleski's case that workplace bullying and harassment was a separate event or occurrence unrelated to the implementation of the PMP, and was a significant contributing factor to his stress, providing the implementation of the PMP was also a significant contributing factor, the only relevance of Mr Suleski's perception that he was unfairly treated and whether in fact he was unfairly treated or bullied or harassed, was in relation to the issue of whether the stress 'wholly or predominantly' arose from, relevantly, discipline. If the disease was caused by stress and if the stress wholly or predominantly arose from something other than a s 5(4) matter it would follow that the stress did not wholly or predominantly arise from a s 5(4) matter. A prominent cause is the 'stronger, main or leading element': McPherson v State Print (Steytler J) (8) citing the Shorter Oxford English Dictionary definitions of 'predominant'. Having found that Mr Suleski's psychiatric condition wholly or predominantly arose from the PMP implementation meeting on 22 August 2013, whether Mr Suleski perceived he had been unfairly treated or whether in fact he was unfairly treated was not relevant.

90 Further, as I have earlier found, his finding that Mr Suleski perceived he was unfairly treated went nowhere. The arbitrator did not do anything with that finding until he came to consider whether the employer's actions were unreasonable and harsh. Having throughout his reasons referred to Mr Suleski's Azmitia perception that he was unfairly treated, the arbitrator did not explain what was the relevance of those findings. He did not, for example, find that Mr Suleski's perception was one of a number of factors which significantly contributed to Mr Suleski's stress. He did not when he later considered whether the discipline was the whole or predominant cause of the stress return to his findings as to Mr Suleski's perception he was unfairly treated. Given his subsequent finding that the implementation of the PMP was discipline which was the predominant cause of Mr Suleski's stress it must follow that he found that Mr Suleski's perception was not the predominant cause of the stress.

91 The continual reference to the worker's Azmitia perception throughout the arbitrator's reasons is, with respect, confusing.

92 The arbitrator has not explained how Mr Suleski's perception that he was treated unfairly contributed to a significant degree to a disease suffered by Mr Suleski. Relevant to the nature of the disease the arbitrator found Mr Suleski suffered, an adjustment disorder or a major depressive disorder, the arbitrator has not explained how Mr Suleski's perception he was unfairly treated significantly contributed to that condition.

93 Coming back then to ground 8 of the amended notice of appeal and the basis upon which Pilbara Iron submits the arbitrator was wrong in law in that he applied a subjective test to the determination of causation and in his application of Azmitia. I reject the submission that the arbitrator applied a subjective test to the determination of causation. I do not believe he has. However, in my view, with respect to the arbitrator, he has erroneously applied a test of causation for which Azmitia is not authority. In focusing on what was Mr Suleski's perception, the arbitrator has failed to have regard to the nature of the disease suffered by Mr Suleski and what is the event or occurrence in the course of employment which significantly contributed to the contraction of that disease. What was the event within the employment, or the action taken by the employer, without which the disease would not have been contracted.

94 However, more fundamentally, the arbitrator, in my respectful view, erred by applying Azmitia. In the context of how the issues were defined by the parties where it was accepted the implementation of the PMP was a significant contributing cause to Mr Suleski's disease, causation was not an issue. Certainly, Mr Suleski's perception that he was unfairly treated was not relevant to the issues which the arbitrator was required to determine. Mr Suleski's perception of how he was treated was neither relevant to what caused his disease or whether the implementation of the PMP was discipline, and if so, whether it was wholly or predominantly the cause of the stress-related disease. Further, Mr Suleski's perception that he was unfairly treated was, in my view, merely a reaction to being placed on the PMP. It was not separate from or independent to the action of placing Mr Suleski on the PMP. It reinforced the finding the arbitrator ultimately made, that the PMP implementation was the predominant cause of the stress.

95 However, as I have earlier found, any error made by the arbitrator in his reliance upon and application of Azmitia did not impact upon his findings that the stress-related disease predominantly arose from the implementation of the PMP which was a matter of discipline. For the reasons I have explained, to the extent the arbitrator made findings regarding Mr Suleski's perception that he was unfairly treated the arbitrator has not used those findings to conclude the predominant cause of the stress was the PMP implementation and that the PMP was a matter of discipline. Although the arbitrator has erred in his application of Azmitia, the error has not led to any error in the ultimate findings that the implementation of the PMP was discipline and was the predominant cause of the stress-related disease.

96 I therefore dismiss ground 8 of the amended notice of appeal.

The cause of Mr Suleski's psychiatric condition - ground 1 amended notice of appeal

97 By ground 1 of its amended notice of appeal Pilbara Iron challenges the arbitrator's finding at [99] that Mr Suleski's psychiatric condition predominantly arose from the PMP implementation meeting on 22 August 2013. Ground 1 also challenges the arbitrator's finding that the actions of Pilbara Iron in implementing the PMP were harsh and unreasonable. I will first deal with the arbitrator's finding that the actions of Pilbara Iron in implementing the PMP was the cause of Mr Suleski's stress-related illness and later deal with the further finding with which Pilbara Iron take issue, that is, the finding that the implementation of the PMP was harsh and unreasonable.

98 At [89] - [97] the arbitrator comprehensively summarises the medical evidence before him. On the basis of that medical evidence the arbitrator concluded at [98] that Mr Suleski contracted a disease in the course of his employment, either in the form of an adjustment disorder or a major depressive disorder. No issue is taken with that finding. At [92] the arbitrator referred to the first medical certificate dated 28 February 2014 which stated 'problem started with work issues after being upset by his boss 22/8/13'. The arbitrator also referred to the report of a clinical psychologist, Mr Barnes, dated 9 December 2013. He relates the history that Mr Suleski was unhappy that he was placed on the PMP and that generally Mr Suleski disagreed with and took issue with how he had been treated by the employer when placed on the PMP. Mr Barnes recorded a history that Mr Suleski had made an allegation of workplace bullying.

99 The arbitrator then referred to a report of a psychiatrist, Dr Proud, dated 23 October 2014 which was relied upon by Mr Suleski. Dr Proud diagnosed Mr Suleski as suffering from a major depressive disorder with prominent anxiety of moderate severity and which was chronic. Dr Proud related the history that Mr Suleski disagreed with the decision of his supervisor, Ms Bufton, to put him on a PMP and that he refused to sign it. Dr Proud recorded the history that Mr Suleski felt that he was being set up and that being placed on the PMP was simply an excuse for him to fail and for Pilbara Iron to have a legal reason to sack him.

100 Dr Proud was asked to respond to an opinion from another psychiatrist, Dr Edwards-Smith, who diagnosed Mr Suleski as suffering an adjustment disorder. Dr Proud stated that he understood that diagnosis but based upon Mr Suleski's suicidal ideation he thought the diagnosis should be upgraded to a major depressive disorder.

101 The arbitrator then, at [94] - [97], dealt in detail with the report of Dr Edwards-Smith dated 16 April 2014 which was obtained and relied upon by Pilbara Iron. Dr Edwards-Smith diagnosed Mr Suleski as suffering from an adjustment disorder which met the criteria in DSM-V which was attached to her report (although I note only DSM-IV was attached).

102 Dr Edwards-Smith outlined the similar history to that outlined by Mr Barnes and Dr Proud. At [97] the arbitrator summarises Dr Edwards-Smith's opinion that Mr Suleski experienced:

overwhelming physical and psychological symptoms of anxiety after being presented with the PMP on 22 August 2013 and that the most clear trigger for the onset of symptoms was the PMP meeting on 22 August 2013.

most clear trigger for incapacity ... related to the (PMP) ... (on) 22 August 2013. I do think that this is the most significant work-related stressor associated with incapacity ...

104 Dr Edwards-Smith goes onto record the history that Mr Suleski had made allegations regarding workplace bullying.

105 In its written outline of submissions Pilbara Iron submits that the finding that the implementation of the PMP was the cause of the stress-related illness was wrong because it was based upon evidence of how Mr Suleski was treated differently by Pilbara Iron compared to how a co-worker, Mr Moylan, had been treated in respect of a mid-year work performance assessment of each of them. I will deal with the relevance of the evidence concerning Mr Moylan in more detail shortly, but in my view the evidence of how Mr Suleski and Mr Moylan had been differently treated by Pilbara Iron had no bearing on the arbitrator's finding that Mr Suleski's psychiatric condition predominantly arose from the PMP implementation meeting on 22 August 2013. On the basis of the medical evidence, particularly the evidence of Dr Edwards-Smith (which was the report principally relied upon by Pilbara Iron at the hearing) the first medical certificate and the report of the psychologist Mr Barnes, the evidence overwhelmingly supported the finding that the PMP implementation on 22 August 2013 was a significant contributing factor to Mr Suleski's psychiatric condition. Further, the medical and psychological evidence overwhelmingly supported the finding that the PMP was the predominant cause of Mr Suleski's condition. In my view, not only was the arbitrator's finding reasonably open on the medical and psychological evidence and the evidence of Mr Suleski, it is the only reasonable finding which was open. Even were I wrong in that conclusion, the arbitrator's finding as to the cause of the psychiatric condition involved a finding of fact and did not give rise to any error or question of law.

106 In my view, to the extent that ground 1 challenges the arbitrator's finding that the implementation of the PMP at the meeting on 22 August 2013 was the cause of Mr Suleski's psychiatric condition, the ground does not establish any error of law or give rise to a question of law and I dismiss ground 1 to that extent. In my view, the finding was the correct finding.

The Moylan evidence - ground 1 amended notice of appeal

107 The arbitrator applied the so-called Azmitia perception test to find that Mr Suleski felt that Pilbara Iron unfairly targeted and was capricious towards him and that he was singled out or selectively discriminated against: [57], [74], [88(b)], [88(c)].

108 In his statement filed in support of his application and which was adopted as his evidence-in-chief at the hearing, Mr Suleski did not refer to how he had been treated compared to that of a co-worker, Mr Moylan, in respect of a mid-year assessment of each of them where Mr Suleski obtained a score of 70% and Mr Moylan 100%. Mr Moylan was not called to give evidence. The evidence of how Pilbara Iron dealt with Mr Moylan compared to how it dealt with Mr Suleski only came to light during the course of the extended hearing over intermittent days over a period of eight months. Further documents, including the mid-year reviews of Mr Suleski and Mr Moylan, were discovered by Pilbara Iron during the course of the hearings. The documents were annexed to a supplementary statement of Mr Suleski dated 26 June 2015 filed at WorkCover on 1 July. When Mr Suleski filed his supplementary statement there had been a full day's hearing on 23 February 2015 during which Mr Suleski had already given evidence including being cross-examined. There was also a directions hearing on 23 April 2015 (although the cover page of the reasons refers to a hearing date on 24 February 2015 there is no transcript for that day. The transcript for the hearing on 23 February 2015 records the matter was adjourned to 18 March 2015 but it appears there was no hearing on that date).

109 The evidence of the mid-year reviews and Mr Suleski's supplementary statement were referred to at the resumed hearing on 2 July 2015 (page 868 appeal book and following). The documents were provided to Mr Suleski's representative two months before 2 July 2015 (AB 870).

110 Ms Suleski was then recalled to give further evidence. His evidence-in-chief was led on 2 July 2015.

111 Prior to that time Mr Suleski was unaware of how Mr Moylan had been treated. Mr Suleski claimed he suffered stress from 22 August 2013 following Pilbara Iron placing him on a PMP. Therefore, as Mr Suleski only became aware of how Mr Moylan was treated compared to how he, Mr Suleski, was treated, nearly two years after he suffered the stress-related condition, the evidence of how Mr Moylan was treated was not relevant to any stress suffered by Mr Suleski. The evidence of how Mr Moylan was treated was not causally relevant to the stress. Its only relevance may have been in relation to the issue of whether, if the PMP was discipline and the stress wholly or predominantly arose from that discipline, the employer had unreasonably and harshly dealt with the worker.

112 To the extent the arbitrator has relied upon the evidence of how Mr Moylan was dealt with compared to how Mr Suleski was dealt with for finding that it caused Mr Suleski to feel he was being unfairly targeted, singled out and selectively discriminated against, which caused his stress, the arbitrator was in error. The question is whether that is only an error of fact or whether such an error involves a question of law. In the appeal hearing Mr Suleski's counsel conceded that to the extent the arbitrator relied upon the evidence concerning how Mr Suleski had been treated compared with how Mr Moylan had been treated as being causally relevant to Mr Suleski's stress, such a finding was in error, but submits it was only an error of fact and, in essence, that error does not taint the balance of his findings.

113 It is clear from the passages from the arbitrator's reasons for decision which I have earlier set out that the arbitrator found Mr Suleski felt aggrieved and that he was being unfairly targeted and discriminated against because of how he had been dealt with contrasted with how Mr Moylan had been dealt with, that is, his knowledge of how he and Mr Moylan had been differently treated was causally related to the stress he suffered. At the time Mr Suleski was diagnosed as suffering from a stress-related medical condition, he did not know that he and Mr Moylan had been differently reviewed and dealt with by Pilbara Iron. Therefore whether or not Mr Suleski and Mr Moylan had been treated differently during the mid-year reviews could not be, and was not, causally relevant to the stress-related condition with which Mr Suleski was diagnosed. The stress suffered by Mr Suleski was not caused by any knowledge or perception on his part that he had been unfairly targeted or discriminated against because he and Mr Moylan had been dealt with differently during the mid-year review. As I have earlier observed, the only relevance of that evidence was as to whether, if the stress suffered by Mr Suleski wholly or predominantly arose from a matter mentioned in s 5(4), specifically in the circumstances of this case from a matter of discipline, the discipline was 'unreasonable and harsh on the part of the employer'.

114 In my view, although the arbitrator's erroneous findings in reliance upon Mr Suleski's feeling or perception that he was unfairly targeted or discriminated against because he thought he had been treated differently compared to how Mr Moylan had been treated, permeates his reasons, the findings are irrelevant to the findings that the PMP implementation was the predominant cause of the stress-related disease and the PMP was discipline. The arbitrator, for the reasons I have earlier explained, did nothing with, and did not rely upon, the finding that Mr Suleski felt he was unfairly treated because of the way in which he and Mr Moylan had been separately treated when he found that the implementation of the PMP was the predominant cause of the stress. Therefore, even though the arbitrator erred in making findings about Mr Suleski's perception based on the evidence of Mr Moylan, it did not lead to any error in his finding that the PMP implementation was the predominant cause of the stress.

115 Accordingly, I dismiss ground 1 of the amended notice of appeal to the extent that it alleges the arbitrator was wrong in law in finding the cause of the stress-related disease was the implementation of the PMP. The arbitrator's finding that the PMP was the cause of the stress-related illness was not based upon the evidence of Mr Moylan.

116 However, whether or not the arbitrator has made an error of law based upon the Moylan evidence in finding that the actions of the employer in implementing the PMP were unreasonable and harsh is a separate issue which I consider later in these reasons.

Discipline - grounds 2 and 3 amended notice of appeal and cross-appeal

117 As I have earlier noted, both parties in their written outline of submissions for the appeal argue the arbitrator's finding that the placing of Mr Suleski on a performance management plan constituted discipline was in error. However, during the course of the hearing before me counsel for Pilbara Iron resiled from the submission in the written submissions that the PMP was not disciplinary and that its primary position was that the cause of Mr Suleski's stress arose from an expectation of discipline or a termination of employment. Counsel stated that Pilbara Iron's main submission was that the implementation of the PMP was disciplinary action but that it was not unreasonable or harsh. Having in the hearing before the arbitrator argued that if the implementation of the PMP did not give rise to an expectation of discipline, it was actual discipline, it was difficult to maintain on appeal that the arbitrator erred in law in finding the implementation of the PMP was a matter of discipline. Counsel accepted that Pilbara Iron's secondary submission on appeal, was that the cause of Mr Suleski's stress was an expectation of being disciplined by the employer for the purposes of s 5(4)(c) rather than actual discipline for the purpose of s 5(4)(a). Although Pilbara Iron accepts Mr Suleski's stress arose from or was caused by the meeting on 22 August 2013 during which he was advised he was to be placed on the PMP, Pilbara Iron argued that the stress arose from an expectation he would be disciplined if he did not successfully comply with the PMP. That is, Pilbara Iron submitted that although the implementation of the PMP was a matter of discipline, the stress did not predominantly arise from that discipline. Rather, it predominantly arose from an expectation of further discipline.

118 Mr Suleski's primary submission was that the decision to place him on the PMP only involved administrative or management action on the part of the employer and did not involve discipline; that the PMP was a preliminary step before deciding whether to discipline Mr Suleski.

119 In his cross appeal Mr Suleski, principally in reliance upon a number of Federal Court authorities dealing with Commonwealth legislation, submitted that the implementation of the PMP was part of a management prerogative to efficiently manage its workforce but was not discipline. It was only if Mr Suleski failed to adhere to the PMP that the employer might take action to determine whether or not disciplinary action may result. Mr Suleski points to the wording of the PMP referring to the consequences of failing to comply with the PMP under the heading:

'EXAMPLES OF NOT MEETING THE ABOVE OBJECTIVES AND EXPECTIONS'

Consequences of any of the above may result in disciplinary action up to and including the termination of your employment. (emphasis added)

120 The performance management plan is a four page document dated 22 August 2013 which purported to have a duration of three months. Mr Suleski refused to sign the PMP in circumstances I explained at [77] above.

This performance plan has been developed as a result of your performance in your role with the intention of providing you support and assistance to ensure you meet the requirements of a Crane Supervisor within the Dampier Maintenance team.

The development of this plan has been as a result of the incidents outlined below relating to your failure to demonstrate your ability to perform your role adequately, in addition to the outcome of a 'needs improvement' in your recent mid-year performance review. This plan highlights the expectations and requirements of you and offers a number of support services that are available, so as to assist you to meet your obligations.

This Plan will operate for the duration of 3 months until 21 November 2013 at which point it will be reviewed.

The company has concerns about your recent performance in your Crane Supervisor role as a result of the following:

• Failing to complete tasks requested of you:
  • You were requested to prepare a position description for the Transport Operator role in your team. You have failed to complete this piece of work regardless of follow up emails and examples provided to you to assist you in completing this task.
• Display of poor leadership behaviours:
  • On numerous occasions you have been counselled regarding your leadership behaviour and your ownership of your accountabilities as a leader in the business, such as;
    • Referring to safety issues within your team as 'Management's' problem
    • Displaying an inappropriate attitude of 'Team versus Management' in team settings
    • Not recognising and appropriately addressing issues raised from your team members
    • Displaying an inappropriate attitude towards other key stakeholders within the business
    • Failing to hold your team members to account in circumstances of poor performance or inappropriate behaviour

The following expectations, although not exhaustive, have been developed to assist you in achieving the overall aim of this plan.

• Complete tasks as requested.
• Display a responsible and committed approach to the role.
• Relate to others in a manner that is courteous and respectful.
• Coach, mentor and support your team members.
• Act in a professional, open and honest manner.
• Actively participate in regular management plan reviews as outlined in this document. This includes the expectation to consider any feedback you receive from your Superintendent and Manager, and to take immediate steps to improve.
• Demonstrate sound professional verbal communication skills at all times during working hours.

EXAMPLES OF NOT MEETTING THE ABOVE OBJECTIVES AND EXPECTATIONS:

This plan has been developed with the aim of assisting you to become a safe and productive member of the Dampier Maintenance Team.

The following examples (which are by no means exhaustive) constitute failure to adhere to the plan:

• Failure to complete tasks on time and at the required standard
• Failure to coach, mentor and lead your team to achieve their necessary outcomes.
• Conducting yourself in a manner which negatively impacts on the Dampier Maintenance team
• Failure to adhere to any instruction from your Superintendent
• Failure to meet any requirement of your role as a Crane & Belt Supervisor

Consequences of any of the above may result in disciplinary action up to and including the termination of your employment.

The following support initiatives have being developed to assist you in meeting your obligations as a Rio Tinto Iron Ore employee.

Your Superintendent, Molly Buchanan, and your Manager, Gerald Foo, commit to discussing any concerns you have in relation to this management plan or of your improvement against this plan.

We will provide you with training or mentoring in any aspect of your work that you may require in order to meet your obligations under this plan; please speak to your leader to arrange this.

At least once during the course of this management plan

Counselling is available in order to provide you with assistance for any personal, stress or work related issues. The option to seek counselling is required with this plan. The contact number for Davidson Trahaire is 1300 360 364.

We value and respect our employees. If you have any issues or concerns and require support to meet your obligations we encourage you to speak to us regarding your individual needs.

To review progress of behaviour and work performance and determine any support requirements which are responsible to assist in meeting the objectives of this plan

Employee will be counselled if and when a performance issue arises

All reviews in relation to your management plan will be formally documented with file notes. Review periods are a guideline only and additional feedback maybe given informally on a shift-by-shift basis. Should you breach any requirements of this plan; such breaches will be required to be addressed immediately. In addition, further breaches to this plan will include further disciplinary action, up to and including termination of your employment.

You must advise your Superintendent if you are experiencing any difficulties in meeting the expectations of this plan. This will enable your Superintendent to provide relevant assistance as deemed necessary.

The active phase of this performance plan will be in effect for 3 months ending 21 November 2013.

If you have any questions regarding this performance plan or need further explanation of your role requirements then please don't hesitate to contact your Supervisor.

I have read the above Performance Plan. I agree that this plan will address issues in a positive and constructive manner. I agree to the implementation of this plan: (emphasis added)

121 In finding, at [99(d)], the PMP was discipline the arbitrator found that the PMP was indistinguishable from the written warning provided to the worker in FAI General Insurance Co v Goulding.

122 In my view the arbitrator's finding that the implementation of the PMP was 'disciplinary' was correct. His finding that the PMP was not purely a training tool but was similar to the warning letter the employer provided the worker in FAI General Insurance Co v Goulding is correct. The letter provided to Ms Goulding was very critical of her work performance and attitude and set out performance standards she was required to immediately adopt and maintain. The letter advised her that her performance would be reviewed in a month's time and should her behaviour not comply with those standards, her position with the company will be reviewed and the review may result in the termination of her services. The purpose of the PMP and the language of it are very similar to the letter the employer provided to Ms Goulding.

123 Further, the letter the employer provided the worker in Housing Industry Association Limited v Murten [2004] WASCA 139, is, in its terms, similar to the terms of and the circumstances in which Mr Suleski was placed on the PMP.

124 The written warning referred to by Le Miere J was entitled 'Staff Disciplinary Action - Written Warning'. The letter containing the warning referred to a discussion in relation to work performance which had been found to be unacceptable and stated 'You are therefore advised that should your conduct continue to be unacceptable, you may risk further disciplinary action.'

125 In my view the circumstances in which the written warning was given to Mr Murten are similar to the circumstances in which Pilbara Iron sought to place Mr Suleski on the PMP. The Court of Appeal held that the issuing of the written warning by the employer to the worker clearly fell within the ordinary meaning of the word 'discipline' for the purposes of s 5(4).

126 In Housing Industry Association Limited v Murten Le Miere J (Steytler & EM Heenan) said [20] - [21]:

The word 'discipline' is to be given its ordinary meaning. It must be interpreted in context. The context in which it appears is as follows. The effect of s 18 of the Act read in conjunction with the definition of 'disability' in s 5, is that a worker who in the course of his employment contracts a disease caused by stress is entitled to compensation. The proviso to the definition of disability limits the instances in which a worker who contracts a disease caused by stress will be entitled to compensation. Thus a worker is not entitled to compensation where the disease was caused by stress that arose wholly or predominantly from the matters set out in par 5(4)(a), unless there has been conduct that is unreasonable and harsh on the part of the employer. The matters set out therein include the worker's dismissal, retrenchment, demotion, discipline, transfer or redeployment.

That is the context within which the word discipline is to be defined. It should therefore be given its ordinary meaning in an employment context. It is not helpful to attempt to define the outer boundaries of what is included within 'discipline'. However, it clearly includes the issue of a written warning such as the written warning of 17 April 2000 given by the appellant to the respondent.

127 In the Macquarie Dictionary (5th ed) 'discipline' is relevantly defined as:

Training to act in accordance with rules; 'instruction and exercise designed to train to proper conduct or action; punishment inflicted by way of correction and training; subjection to rules of conduct of behaviour; state of order maintained by training and control; to train by instruction and exercise; to bring to a state of order and obedience by training and control.

128 The Shorter Oxford English Dictionary defines 'discipline' as:

Instruction given to pupils or disciples; teaching, education; instruction fitting one to perform an activity; training; controlled and orderly behaviour resulting from training; the system of order and strict obedience to rules enforced amongst pupils, soldiers, or others under authority; give instruction to, educate, train.'

129 As I have earlier noted, by his cross-appeal Mr Suleski submits the imposition of the PMP does not constitute discipline within the meaning of that word in s 5(4)(a). Mr Suleski accepts that the PMP upon which he was placed was part of a management prerogative to efficiently manage its workforce but submits it was not actually discipline. It is further submitted that it was only if Mr Suleski failed to adhere to the PMP that Pilbara Iron may then take action to determine whether or not disciplinary action may result. By reference to the explanation of its aims, the PMP was for the purpose of providing Mr Suleski with support and assistance to ensure he met the requirements of a crane supervisor and to become a safe and productive member of the Dampier maintenance team. Further, by reference to the consequences for failing to adhere to the plan which explain 'may result in disciplinary action up to and including the termination of your employment', Mr Suleski submits a distinction is drawn by Pilbara Iron between placing Mr Suleski on the PMP and taking disciplinary action against him which might only happen if he failed to comply with the PMP.

130 In response Pilbara Iron refers to the passage I have highlighted which refers to '... further breaches to this plan will include further disciplinary action, up to and including termination of your employment' (emphasis added). Pilbara Iron submits the wording of the PMP, by referring to 'further' disciplinary action, makes it clear that the action taken to place Mr Suleski on the PMP is in itself disciplinary action.

131 So Pilbara Iron accepts the implementation of the PMP was discipline but says that was not the predominant cause of the stress. The predominant cause was an expectation of further discipline, including termination of employment.

132 Mr Suleski also submits that Sydney Harbour Federation Trust and Comcare v Radford [2008] AATA 1087 is authority for the submission that placing Mr Suleski on the PMP did not constitute discipline. Mrs Radford was placed by her employer, the Sydney Harbour Federation Trust, on a performance improvement plan after criticism of her work performance. An issue arose as to whether the process provided for in the terms and conditions of the employment by which Mrs Radford was placed on the performance improvement plan amounted to disciplinary action within the meaning of the definition of 'injury' under s 4 of the Safety, Rehabilitation and Compensation Act 1988 (Cth). It was held by the Administrative Appeals Tribunal that the implementation of the performance improvement plan [47]:

1. ... was not 'disciplinary action' but was rather pre-disciplinary, and directed to effecting greater efficiency in the operation of the Trust by means of the management of performance designed to assist the employee who was expressing considerable difficulty in coping with her workload to perform more effectively.

133 However, Radford must be read and understood in the context of the specific provisions of the Commonwealth legislation and, importantly, in the context of the terms and conditions which governed Mrs Radford's employment. The tribunal made it clear that whether the implementation of the performance improvement plan amounted to disciplinary action must be considered in the context of the written terms and conditions of employment which, in that case, were extensive. It was by reference to those terms and conditions of employment that the tribunal concluded that the placing of a worker on a performance improvement or management plan was not discipline, it only involved a consultation process directed to ensuring efficient performance of duties before any steps involving discipline were taken. That is to be contrasted with the facts of this case where, it seems, very little evidence was adduced as to any written terms and conditions of Mr Suleski's employment.

134 When considering the meaning of the word 'disciplinary' for the purposes of the Commonwealth legislation, the tribunal said [31] - [32]:

1. According to the Oxford Dictionary the adjective 'disciplinary' bears a meaning of pertaining to, promoting or enforcing discipline to behaviour. Under the Terms of Employment, the emphasis is on sharing effective outcomes from an employee, rather than on forcing disciplined behaviour or behaviour which is subject to discipline. The definition of 'discipline' has connotations of controlling behaviour rather than assisting the promotion of effective and efficient behaviour.
2. There is no clear-cut distinction between what is disciplinary and what is managerial conduct, except that the notion of management indicates conduct directed to the achievement of effective outcomes by rules designed to constrain behaviour. There is a distinction between assisting someone to perform effectively and imposing discipline on a person which requires them to act efficiently. In the present case the Performance Improvement Plan possesses the character of a set of goals, which the employee should aim to achieve in order to properly carry out the obligations of the position in question. (emphasis added)

135 In deciding in the circumstances of that case that the placing of the worker on a performance management or improvement plan was not disciplinary, the tribunal followed the decision of Cooper J in the Federal Court in Commissioner of the Safety and Rehabilitation of Commonwealth Employees v Gregory Charles Chenhall [1992] FCA 535; (1992) 37 FCR 75 (Comcare v Chenhall). That case concerned whether a formal interview of an Australian Federal police officer by internal investigation officers regarding serious allegations made against the officer concerned disciplinary action for the purposes of s 4(1) of the Commonwealth Employee's Rehabilitation and Compensation Act 1988. Again, the court determined whether or not the actions of the 'employer' constituted disciplinary action in the context of the statutory provisions regulating Mr Chenhall's employment. Cooper J held [54] - [55]:

1. In my view, disciplinary action is not lawfully taken against a member of determines, in accordance with the Discipline Regulations or the Complaints Act, after the provisions of the General Order have been complied with, to take some action against a particular member in respect of a defined disciplinary offence and takes one of the steps provided for under the Discipline Regulations or the Complaints Act to give effect to that determination.
2. For the purpose of the definition of 'injury' in the Act, disciplinary action within the meaning of the definition is not taken against the employee who is a member of the Australian Federal Police until the Commissioner acts in the manner I have described. Action taken to investigate a complaint or allegation against a member, including advising the member of the existence and nature of the complaint or allegation and interviewing the member in relation to it prior to the Commissioner determining to act in accordance with the provisions of the Discipline Regulations or the Complaints Act on the report of the investigation does not constitute 'disciplinary action taken against the employee' within the meaning of the definition of 'injury' in the ct.

1. The term 'disciplinary action' is to be interpreted by reference to its ordinary grammatical meaning in the context where it appears in the Act. The starting point is to look at the context.

1. In the context of the definition of 'injury' in s 4(1) of the Act, the phrase 'disciplinary action' means no more than reasonable action lawfully taken against an employee in the nature of or to promote discipline. The relevant discipline is constituted by the body of duties and such rules of conduct or behaviour as are applicable to and enforceable against the employee by virtue of his or her employment by the Commonwealth. The disciplinary action referred to in the definition is action which has been taken against the employee prior to the injury being suffered by the employee as a result of such action. What· is clear to my mind is that it is the disciplinary action itself and not the steps anterior to the decision to take such action which is covered by the definition. Additionally, the action must be directed against a particular employee and does not include an action taken by the Commonwealth as part of the general maintenance of discipline over employees of which the particular employee is but one. Thus, action taken to determine whether or not disciplinary action will be taken against an employee, although it may be characterised as part of a system or process to maintain discipline, is not action within the meaning of the definition of 'disciplinary action' in the Act.
2. The nature of the action which may be taken, and which must be lawful, depends upon the nature of the duties and the rules of conduct or behaviour, and, the means provided for by statute or the common law to enforce them. The definition of 'injury' in the Act assumes the right of the Commonwealth as an employer to take disciplinary action against an employee. As it is an Act dealing with compensation it does not purport to deal with discipline or disciplinary action. In consequence, the Act leaves unanswered three questions:
   1. What discipline or rules of conduct apply to an employee of the Commonwealth?
   2. In what circumstances can the Commonwealth as an employer take action of a disciplinary nature to enforce the discipline or rules of conduct against an employee?
   3. What type of action may the Commonwealth take against an employee if the circumstances giving occasion to the taking of disciplinary action exist?
3. It is not possible, in my view, to say whether any particular conduct is or is not 'disciplinary action' within the meaning of the definition without determining the answers to the three questions posed above, and testing the conduct against the answers obtained to those questions. It follows that the effect to be given to the words is determined in any particular case by reference to the regulatory rules applicable to the employee in question and not by reference to general notions of good order and control of Commonwealth employees.
4. It may well be that the identification of the relevant duty or code of conduct or body of rules applicable to a particular employee operates in such a way that the only lawful disciplinary action which is available under that regime is a punitive sanction available only in cases of proven or admitted misconduct, and that the practical effect is that the operation of the definition is limited to those circumstances.
5. On the other hand, the regime may entitle certain types of action to be taken against employees to enforce discipline where the employer or some designated person has reasonable grounds to believe that an employee has breached or may have breached, or may in the future breach, any duty the employee owes or any applicable code of conduct or rules of behaviour without the requirement that misconduct be proven.
6. However, that result in either case comes not from the construction of the term 'disciplinary action' as a matter of English usage in the definition, but as a matter of what conduct may lawfully be taken by the Commonwealth as an employer against an employee to enforce the disciplinary regime so far as it concerns that employee.
7. There is a further reason which militates against a construction which requires proven misconduct as an element of the definition. The definition does not in terms refer to proven misconduct on the part of an employee and provides no mechanism for establishing the existence or otherwise of misconduct where it is neither admitted nor found by a person or body charged with the duty to determine that question. (emphasis added)

138 The same legislative provisions were considered in Carson v Comcare [24] - [26], to which I have earlier referred at [68] above. The finding that the inefficiency procedure was not discipline but rather was a procedure undertaken to ascertain if Dr Carson should be dismissed, and was therefore not excluded from the definition of injury, must be understood in the context of the employment provisions which regulated how work performance was to be dealt with. The decision is confined to the facts of that case. It does not establish a wider principle that a procedure undertaken to determine if an employee should be dismissed because of inadequate work performance is not discipline.

139 In my view care must be taken in applying those cases concerning the Commonwealth legislation, which determined the warning letters or placing an employee on a performance management plan is not discipline, but is only preparatory to or is a step prior to discipline. The correct statutory construction of the word 'discipline' in s 5(4)(a) requires that it be given its natural and ordinary meaning in the context of the definition of 'injury'. However, it is also important to emphasise that what is discipline in any particular situation must be construed and determined in the context of the terms and conditions which govern the employment relationship. That would normally involve consideration of any written contract of employment, any industrial instrument or order regulating the terms of employment and any internal policies and guidelines, including codes of conduct, regulating the rights and obligations of the employee and the employer. In particular, any written guideline or protocol regulating work performance and dealing with discipline would clearly be relevant. An employer's actions relevant to its employee's work performance and whether it is discipline for the purposes of s 5(4)(a) can only, in my view, be properly determined in the context of an understanding of how all of those matters, if they exist, relate to each other and operate together. What might be discipline in one matter might not be discipline in another case where different disciplinary guidelines, codes of conduct and protocols apply.

140 Although Mr Suleski's contract of employment entitled 'conditions of employment - residential - full-time employees - level ' was adduced in evidence before the arbitrator the other documentation and matters to which I have referred, such as written protocols or guidelines, or codes of conduct, relevant to work performance issues were not adduced in evidence. Clause 10 of the contract of employment 'Ethical business practice' requires Mr Suleski to comply with the 'Required Standard of Business Conduct Policy and Code of Good Conduct'. Clause 11 which is headed 'Safety in the Workplace' refers to various policies and procedures. Clause 12 headed 'Fair Treatment' states that if Mr Suleski believes a decision unfairly affects him in his role he can seek a review of that decision and both he and the employer are required to follow the process set out in the applicable 'Fair Treatment System Policy'. Clause 13 requires Mr Suleski to abide by all policies and procedures of the employer. Those policies and procedures were not in evidence before the arbitrator.

141 It is therefore unclear whether the PMP was instituted in accordance with any of the employer's policies or procedures which might assist in understanding the context in which Mr Suleski was placed on the PMP and as to whether it is discipline

142 At [84] the arbitrator refers to the evidence of Ms Bufton who was Pilbara Iron's superintendent whose decision it was to place Mr Suleski on the PMP. The arbitrator refers to Ms Bufton's evidence of how work performance is reviewed and the process involved. He refers to a development management plan which might be devised in certain circumstances but then at [85] rhetorically asks why Mr Suleski was not placed on a development management plan rather than on a PMP, noting that no development plan documentation was adduced. He then goes on to say:

... I consider and find that the employer departed from its own procedures in managing the worker and placing him on a PMP instead of a DP (development plan) in this case, and in any event did not satisfactorily explain and justify why (on its own processes) a PMP was justified, either or both of which again giving rise to the worker's Azmitia perceptions that he was being unfairly targeted or treated.

143 Although it is not entirely clear why the arbitrator found the employer departed from its own procedures in managing Mr Suleski, it seems he relied upon the evidence as to how Mr Moylan had been differently graded and treated to that of Mr Suleski and Mr Suleski's explanation as to why he ought to have been put on a development management plan rather than a performance management plan. As I have earlier explained, any finding of the arbitrator in reliance upon the evidence that Mr Moylan and Mr Suleski were treated differently and Mr Suleski's reaction to that is in error. As the arbitrator's finding that the employer departed from its own procedures by placing Mr Suleski on a PMP instead of a DMP is based upon the Moylan evidence it is erroneous. It goes beyond an error of fact.

144 In my view in deciding what is discipline, the three questions posed by Cooper J in Chenhall [25] (cited above [137]) are relevant and should normally be posed and answered. However, it may be that in certain factual circumstances it is unnecessary to ask the three questions posed by Cooper J. Nor will the failure to ask those questions necessarily result in an error of law being made.

145 I reject Mr Suleski's submissions on appeal that the implementation of the PMP was merely part of a management prerogative to efficiently manage its workforce and that the implementation of the PMP was not discipline. Further, it was not even action taken to determine whether or not disciplinary action would be taken, which is not of itself disciplinary action. It was only if Mr Suleski failed to adhere to the PMP that Pilbara Iron may take action to determine whether or not disciplinary action 'may result', referring to the wording in the PMP. It was submitted that it was only after the expiry of the PMP that Pilbara Iron 'may' consider discipline or disciplinary action. By its own description the PMP, it was submitted, was a management tool to ensure that Mr Suleski was able to carry out his work to the level expected (particularly by his new supervisor) and to provide him with 'support and assistance' to achieve that end.

146 In my view placing Mr Suleski on the PMP was clearly a matter of discipline. Whether further disciplinary action, up to and including the termination of employment, might be taken does not mean the PMP was not discipline. Nor does it mean the implementation of the PMP was only a preliminary step taken to determine whether disciplinary action might be taken.

147 During the appeal hearing counsel for Mr Suleski submitted that the meaning of 'discipline' is narrowly defined to mean punishment. That the proper meaning of the word 'discipline' in s 5(4)(a) is not merely training or education. Any action taken by an employer to address concerns about a worker's work performance short of a formal reprimand or some sort of punishment or adverse impact upon a worker's terms and conditions would not, it was submitted, meet the ordinary and natural meaning of discipline in s 5(4)(a). Such a narrow or restricted meaning is, it was submitted, consistent with the other actions referred to in s 5(4), dismissal, retrenchment, demotion, transfer or redeployment. The meaning of discipline must be more than training to do the job properly. Essentially counsel submitted that the meaning of 'discipline' refers to action taken by an employer in response to misconduct on the part of an employee.

148 I reject those submissions. In my view the meaning of 'discipline' cannot be so narrowly defined. If the word 'discipline was given the meaning suggested by counsel, it would leave very little, if any, room for the operation of the other actions referred to which are excluded matters. It is hard to think of what action could be taken by an employer which would meet the meaning of the word 'discipline' as submitted by counsel other than by dismissal, retrenchment, demotion, transfer or redeployment. It would mean that an employer who acting reasonably rather than punishing a worker for poor work performance seeks to take some other form of action to address poor work performance issues, such as re-training or closely supervising the worker or restricting the worker's ability to act, would not constitute discipline. If the worker disagreed with the employer's action and took exception to the action and as a result suffered stress, the worker would be entitled to compensation. In my respectful view that would lead to a result contrary to the purpose of s 5(4) which enables an employer to take action to properly and efficiently manage its workforce without being exposed to a risk that a worker who might suffer from stress as a result of those actions was entitled to compensation. The very nature of taking the sort of action contemplated by s 5(4) is that they will often be stressful to workers but providing the employer's actions are not unreasonable and harsh, the worker is excluded from an entitlement to claim compensation: FAI General Insurance v Goulding (Steytler J) [39].

149 I am of the view that a warning letter from an employer to its employee raising concerns about the employee's work performance, and actions taken in respect of unsatisfactory work performance to manage and address the employer's concerns about work performance, would generally be regarded as discipline for the purposes of s 5(4)(a). I am supported in that view by Murten and Goulding.

150 In summary, in my view, and notwithstanding the apparent failure to adduce evidence of any relevant policies, codes of conduct or practice or guidelines relevant to Mr Suleski's of employment and work performance, the placing of Mr Suleski on the PMP falls within the natural and ordinary meaning of the word 'discipline' in s 5(4)(a) in that it involves instruction designed to train to proper conduct, to subject a person to rules of conduct of behaviour or to maintain a state of order by training and control or to bring to a state of order and obedience by training and control. The arbitrator's finding that the PMP implementation meeting on 22 August 2013 was a matter of discipline was correct and was not in error. Accordingly, I dismiss ground 2 of the amended notice of appeal. I also dismiss Mr Suleski's cross-appeal.

Whether the stress wholly or predominantly arose from actual discipline or an expectation of discipline - ground 3 amended notice of appeal

151 A further issue arises as to whether each of the matters in subparagraphs (a), (b) and (c) of s 5(4) can exist together at the same time or whether they are mutually exclusive.

152 Specifically, in this case, whether the stress can wholly or predominantly arise from both discipline or an expectation of discipline. Although a worker's stress might arise from both being disciplined and having an expectation of being further disciplined, it must follow from the meaning of the expression 'wholly or predominantly' that if the stress wholly or predominantly arises from one of the excluded matters, it could not have wholly or predominantly arisen from another excluded matter. So, if the stress wholly or predominantly arises from actual discipline, even though the stress might have been contributed to by an expectation of further discipline, the stress could not by definition wholly or predominantly arise from the expectation of further discipline. Therefore, in my view, once the arbitrator found that the stress suffered by Mr Suleski wholly or predominantly arose from discipline, being the implementation of the PMP, he implicitly found that the stress did not wholly or predominantly arise from an expectation of discipline. As, in my view, he was correct in his finding that the stress wholly or predominantly arose from the implementation of the PMP, which was a matter of discipline, it follows he was correct in failing to find that the stress wholly or predominantly arose from an expectation of discipline.

153 It is true that in determining Mr Suleski's psychiatric condition wholly or predominantly arose from the PMP implementation meeting on 22 August 2013 which was discipline, the arbitrator failed to specifically address in his reasons Pilbara Iron's argument that the stress wholly or predominantly arose from an expectation of discipline rather than actual discipline. However, as I have just explained, it is implicit in his reasons that because he has found the PMP implementation was a matter of discipline he has rejected the submission that the PMP involved only an expectation of discipline which was the predominant cause of the stress. That finding was a factual finding. It was also, in my view, consistent with and supported by the evidence to which I have earlier referred. Although there was some evidence from the accused that he was concerned he was being set up and wanted to be placed on a development plan rather than PMP because the development plan did not carry with it a risk of termination of employment, the evidence, in my view, pointed more strongly to the conclusion that the PMP concerned a matter of discipline. In my view, the finding that the PMP was a matter of discipline which was the predominant cause of the stress was the correct finding.

154 Therefore, for this further reason, I dismiss grounds 2 and 3 of the amended notice of appeal.

'Unreasonable and harsh' - ground 1 amended notice of appeal

155 I now turn to consider the challenge to the arbitrator's finding that the employer's actions in implementing the PMP were unreasonable and harsh.

156 The words in the expression 'unreasonable and harsh' in the definition of 'injury' in s 5 must be given their ordinary and natural meaning: Housing Industry Association Limited v Murten (Le Miere J) [24] - [25].

157 'Unreasonable' means 'not guided by reason or good sense; not based on or in accordance with reason or sound judgment; exceeding the bounds of reason; immoderate; exorbitant': Macquarie Dictionary (5th ed). It can also mean 'irrational, not based on or acting in accordance with reason or good sense, going beyond what is reasonable or equitable, excessive': New Shorter Oxford English Dictation.

158 'Harsh' means 'unpleasant in action or effect': Macquarie Dictionary (5th ed).

159 It can also mean 'an action which is severe, rigorous, cruel, unfeeling': New Shorter Oxford English Dictionary.

160 What is unreasonable and harsh will vary according to the circumstances of the case. For example, where an industrial award provides that termination of employment shall not be harsh or unreasonable an employer is under an obligation to give procedural fairness, the content of which will vary according to the circumstances: Byrne and Frew v Australian Airlines Limited [1994] FCA 888 [6]; [1994] FCA 888; (1994) 120 ALR 274, 276 per Black CJ.

161 In Bostik (Australia) Pty Ltd v Gorgevski [No 1] [1992] FCA 209; (1992) 36 FCR 20 Sheppard & Heerey JJ (28) said of the meaning of the expression 'harsh, unjust or unreasonable' in an industrial award regulating termination of employment:

These are ordinary non-technical words which are intended to apply to an infinite variety of situations where employment is terminated. We do not think any redefinition or paraphrase of the expression is desirable. We agree with the learned trial judge's view that a court must decide whether the decision of the employer to dismiss was, viewed objectively, harsh, unjust or unreasonable. Relevant to this are the circumstances which led to the decision to dismiss and also the effect of that decision on the employer. Any harsh effect on the individual employee is clearly relevant but of course not conclusive. Other matters have to be considered such as the gravity of the employee's misconduct.

162 The unsuccessful appellants in Bryne and Frew appealed to the High Court. The High Court dismissed the appeal and upheld a cross appeal. In Byrne and Frew v Australian Airlines Limited (1995) 131 ALR 422, McHugh and Gummow JJ said in relation to the meaning of the expression 'harsh, unjust or unreasonable' (461):

... It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.

163 Further, referring to the remarks of Sheppard & Heerey JJ in Bostik (Australia) cited above they said (463):

The above propositions should be accepted as applicable to the present appeals. However, it should be emphasised that the present task is to construe the award and that nothing now said necessarily determines the meaning of the phrase 'harsh, unjust or unreasonable' in any other setting.

164 Notwithstanding that cautionary note and cognisant that the expression 'unreasonable and harsh' in the definition of an 'injury' is contained in a different statutory context to the expression 'harsh, unjust or unreasonable', considered in Bostik, I am of the view that reasoning can be applied in determining the meaning of the expression 'unreasonable and harsh'.

165 Applying that reasoning to the expression 'unreasonable and harsh' in the definition of 'injury' an arbitrator must decide whether the s 5(4) matter was, viewed objectively, unreasonable and harsh having regard to the circumstances which led to the decision to take the s 5(4) action, the process by which the action was taken and how the worker was dealt with and the effect of the action on both the employer and the worker. The seriousness or gravity of the worker's behaviour or work performance will also be relevant: see also Azmitia [30] - [32].

166 Whether discipline of a worker is unreasonable and harsh on the part of an employer is a question of fact and degree: Housing Industry Association Limited v Murten (Le Miere J) [33]. However, the true scope of the inquiry undertaken by an arbitrator in deciding whether a worker's discipline is unreasonable and harsh on the part of the employer must be ascertained on a proper construction of the Act and therefore does involve a question of law. It is not to the point that the ultimate decision as to whether the discipline was unreasonable and harsh on the part of an employer also involves questions of fact: Jenkins v Western Australian Department of Training [1999] WASCA 199 [35] (Anderson J (Malcolm CJ & Ipp J agreeing); Bednarczyk v Natcorp Investments Limited (Unreported, FCt WASC, Library No 970363, 23 July 1997) [5] - [6] (Franklyn J).

167 Anything that is capable of making the discipline unreasonable and harsh on the part of the employer must be given proper consideration by an arbitrator in determining whether the discipline was unreasonable: Jenkins v Western Australian Department of Training [37] (Anderson J).

168 Whether the action of the employer is unreasonable would normally be considered by reference to the decision of the employer, how it was arrived at and the process involved in taking action including any issue of procedural fairness, whereas whether an employer's action is harsh is more focused upon the consequences to the worker or because it was disproportionate to the gravity of the worker's conduct: compare Byrne v Australian Airlines Limited (1995) 131 ALR 422 (461) (McHugh & Gummow JJ).

169 In their written submissions, Pilbara Iron submits:

1. Further, it is submitted that the Arbitrator erred in finding that the appellant's implementation of the PMP was unreasonable and harsh. In particular, the Arbitrator erred in:

1. having regard to Mr Brian Moylan's mid-year performance review which the Worker was not privy to prior to the WorkCover proceedings and could not be causative of symptoms and in any event, was not relevant to the issues in dispute (paragraphs 57 and 88(c) of the Reasons); 2. concluding that Worker's mid-year performance review was selectively downgraded on Ms Bufton's email instruction when this finding was not reasonably open to Arbitrator to make on the evidence and further, was not a matter that the Worker would have been privy to prior to the WorkCover proceedings (paragraph 85 of the Reasons);

1. finding that Pilbara Iron departed from its own procedures in placing the respondent on a PMP when such a finding was not reasonably open to the Arbitrator to make when regard is had to Ms Bufton's evidence (paragraphs 85 and 88(f) of the Reasons);

1. finding that Pilbara Iron was not justified in implementing the PMP notwithstanding evidence at the hearing that: 1. Ms Bufton's uncontested evidence that she had 'an in depth handover of character performance, KPIs, teams, footprints, areas of accountability'; 2. the Worker conceding that Ms Bufton was entitled to manage his performance; 3. Ms Bufton's uncontested evidence that the Worker was not performing the pre-start instructions appropriately; 4. Ms Bufton's uncontested evidence that the Worker performed poorly in the safety reset exercise; 5. Ms Bufton's uncontested evidence that the Worker would received [sic] hazards or faults for his team and he believed that it was 'managements job to fix' - the hazards or faults included pot holes and turntables on trucks needing replacement; and 6. Ms Bufton's uncontested evidence that she repeatedly counselled the Worker in relation to his performance issues.
2. With the exception of items (ii) and (iv), the evidence in 34(d) above was not referred to in the Arbitrator's Reasons.

170 I have earlier found that the arbitrator was in error in the findings he made based upon the so-called Azmitia perception and findings he made that Mr Suleski felt he was being unfairly treated, but the error did not lead to or result in any error in the ultimate finding that the PMP implementation was a matter of discipline which was the predominant cause of Mr Suleski's stress-related disease. I have also found that the arbitrator erred in finding that Mr Suleski's stress arose in part because of his perception he had been treated unfairly compared to how another employee Mr Moylan had been treated. I have also observed that the evidence of how Mr Suleski was treated compared to how Mr Moylan was treated was only relevant to the issue of whether the stress wholly or predominantly arose from the discipline of Mr Suleski, that is, placing him on the PMP, and if so whether it was unreasonable and harsh.

171 In my view the arbitrator erred in law in the way in which he approached the determination of whether the implementation of the PMP was unreasonable and harsh as set out in his reasons [100]. The correct approach was to determine whether in all of the circumstances, looked at objectively, the action of the employer in placing Mr Suleski on the PMP was unreasonable and the consequences were harsh. The relevant circumstances included all of the circumstances leading up to the decision to implement the PMP, including how Mr Suleski was informed of the decision, which in turn must be considered in the context of all of the policies, guidelines and codes of conduct which regulate Mr Suleski's conditions of employment and work performance, how he was informed of the decision to implement the PMP and how the PMP impacted upon Mr Suleski after it was imposed, both in relation to his work performance and any personal issues. An opportunity to address poor work performance would in my view not normally be unreasonable or harsh, depending on the procedure that was followed and what any internal guidelines or codes of conduct require and depending on what are the consequences to the worker.

172 In [100(a)] the arbitrator refers to his finding at [88(a)] which in part refers to an earlier finding that Pilbara Iron accorded Mr Suleski selectively differential treatment compared to other workers. That finding was based on the Moylan evidence. I am satisfied that any finding of the arbitrator by application of the so-called Azmitia perception based upon Mr Suleski's belief that he was unfairly targeted because of learning how Mr Moylan was differently treated is in error because there was no proper basis upon which such findings could be made. There was no evidence, or no admissible evidence, to support such a finding. Further, the worker's belief as to whether he was being unfairly targeted was not relevant to whether the employer's actions were unreasonable and harsh. Even if the worker's beliefs were relevant, to the extent that they were based on the Moylan evidence, there was no basis for them. For the reasons I have earlier explained there could not have been any such belief when the disease was contracted. Therefore it could not have been unreasonable for Pilbara Iron not to accept or to disregard Mr Suleski's explanations that he was unfairly treated, because he could not have had any such belief based on the Moylan evidence.

173 Further, the worker's belief that he was being unfairly targeted was not relevant to whether the actions of the employer were unreasonable and harsh. The arbitrator has, with respect, confused issues which were relevant to causation in determining whether the actions of the employer were unreasonable and harsh. He has failed to apply the proper statutory construction of the meaning of the expression 'unreasonable and harsh' in the definition of 'injury'. In my view the arbitrator has confused his finding that Mr Suleski perceived he was being unfairly treated, which as I have earlier observed was an unnecessary finding and went nowhere, with the relevant matters he had to consider when determining whether the employer's actions were unreasonable and harsh. His finding based on the so-called Azmitia perception, especially to the extent the finding was based on the Moylan evidence, has tainted his findings at [100] - [102] that the actions of the employer were unreasonable and harsh. The focus on Azmitia, which is about causation, has, with respect, distracted him from properly construing the expression 'harsh and unreasonable' and properly determining whether the actions of Pilbara Iron in placing Mr Suleski on the PMP were harsh and unreasonable. Mr Suleski's perception that he was treated unfairly was not relevant to the determination of that issue. Whether he was, looked at objectively, treated unfairly is certainly a relevant consideration in determining whether the action of Pilbara Iron to place him on the PMP was unreasonable and harsh, but his perception, which could only have been relevant to causation, was not relevant to whether the employer's actions were unreasonable and harsh. Otherwise, if whenever a worker perceived or believed he was being unfairly treated it would follow the employer's actions would be unreasonable and harsh.

174 In each of subparagraphs (a), (b) and (c) in [100] the arbitrator finds that it was unreasonable for the employer not to accept or disregard Mr Suleski's explanations but to instead implement the PMP. I have earlier said that it is, with respect, difficult to understand exactly what the arbitrator has found and for what purpose. In my view the arbitrator erred in finding the implementation of the PMP was unreasonable and harsh based upon his finding that it was unreasonable for the employer not to accept the worker's explanations. Whether it was unreasonable not to accept the worker's explanations does not answer the question of whether the discipline by the employer, the implementation of the PMP, was in all of the circumstances unreasonable and harsh looked at objectively. Whether the employer's actions were unreasonable and harsh must be judged by having regard to all of the circumstances that I have earlier outlined, including the circumstances leading up to the decision to implement the PMP, the way in which the decision was made and how Mr Suleski was informed of it, in the context of any work policies or procedures or codes of conduct and how it impacted upon Mr Suleski personally. In focusing on Mr Suleski's belief or perception that he was being unfairly treated, the arbitrator failed to have regard to the proper statutory construction and purpose of s 5(4) by which an employer is entitled to take administrative action to manage the performance of its workforce, the purpose of which, as observed by the High Court in Comcare v Martin [46], would be defeated if the operation of the exclusion were dependent upon the subjective psychological drivers of the employee's reaction to the administrative action.

175 I accept the matters identified at [32(d)] of the appellant's submissions are the type of matters which the arbitrator was required to consider in determining whether in all of the circumstances the employer's actions were unreasonable and harsh. In my view the arbitrator, except for subparagraphs (d)(ii) and (iv), failed to consider those matters and has failed to consider all of the circumstances relevant to whether the discipline was unreasonable and harsh. The arbitrator has therefore erred in the correct statutory construction of the meaning of the expression 'unreasonable and harsh' in the definition of 'injury'. Such an error is an error of law.

176 It follows I would uphold ground 1 of the notice of appeal insofar as it alleges the arbitrator was wrong in law in finding the implementation of the PMP was unreasonable and harsh and set aside that finding.

177 I dismiss ground 1 of the notice of appeal insofar as it alleges the arbitrator was wrong in law in finding that the implementation of the PMP was the cause of Mr Suleski's stress.

179 In light of my finding that ground 1 must be upheld, it is unnecessary for me to consider grounds 3 and 4 of the notice of appeal. However, it follows from my decision to uphold ground 1 that the finding the subject of ground 4, concerning the arbitrator's order for weekly payments of compensation, and the finding challenged in ground 7 that interest be awarded, be set aside.

181 At the appeal hearing counsel for Pilbara Iron submitted that if I did uphold the ground of appeal alleging the arbitrator erred in law in finding the implementation of the PMP was unreasonable and harsh, it must mean that Mr Suleski failed to discharge the onus of proof upon him that the exclusion did not apply and that the application for compensation must be dismissed.

182 Counsel for Mr Suleski submitted that if the appeal is upheld in relation the finding that the employer's actions were unreasonable and harsh the application should be referred back to an arbitrator to finally determine the application in accordance with these reasons or any order I might make. He submitted the matter should be remitted to be heard by a different arbitrator.

183 In Bobic v City of Armadale [2013] WADC 126 [52] - [56], I discussed the considerations which apply in determining whether if an appeal was upheld a matter can be remitted to an arbitrator and if so, the same or a different arbitrator. I noted that in Ausden Joinery v PJ WACC C4-2011 McCann P determined that normally a rehearing in respect of any remaining issues would be ordered before another arbitrator as arbitrators are the primary fact finders at WorkCover. I also referred to McKay v Commissioner of Main Roads [2013] WASCA 135.

(7) On hearing an appeal made under this section, the District Court may -

(a) affirm, vary, or quash the decision appealed against, or substitute, and make in addition, any decision that should have been made in the first instance; and

185 In my view the consequence of the basis upon which I uphold the appeal is that the remaining issue to be determined is confined to the determination of whether the implementation of the PMP was unreasonable and harsh within the meaning of that expression in the definition of 'injury'. In my view the demands of justice in the circumstances of this case, where I have allowed the appeal on one ground and set aside the finding of the arbitrator that the implementation of the PMP was unreasonable and harsh, because the arbitrator erred in the way in which he approached his fact finding and the test he applied, requires that that discrete issue be remitted to an arbitrator for further determination in accordance with these reasons. I am also satisfied that the remaining issue be remitted for further hearing before a different arbitrator. If that arbitrator also found that the implementation of the PMP was unreasonable and harsh, the arbitrator would then be required to consider afresh the issue of Mr Suleski's incapacity for work and what order would be made in respect of the application for weekly payments of compensation.

1. Leave to appeal be granted.
2. The appeal be allowed.
3. The decision that the implementation of the performance management plan (PMP) was unreasonable and harsh be set aside.
4. The issue of whether the implementation of the PMP was unreasonable and harsh be remitted to the Workers' Compensation and Arbitration Service to a different arbitrator for further determination in accordance with these reasons.
5. Orders 1, 2 and 3 of the orders made by the arbitrator be set aside.
6. The cross-appeal be dismissed.