Waugh v Simon Blackwood

Croning v Workers Compensation Board (1987) 156 QGIG 100

Hatzimanolis v ANI Corporation Ltd [1992] HCA 21; (1992) 173 CLR 473

C Hartigan instructed by Hall Payne Lawyers on behalf of the appellant

K Philipson instructed by Crown Solicitor on behalf of the intervener

**[1] The appellant, Ms Waugh, was employed at the State Library of Queensland (SLQ) as a Manager for Building and Development. At some time in 2012 the appellant's supervisor, Mr McGregor, took covert photographs of a number of people, including Ms Waugh. Some of the photographs of Ms Waugh concentrated on her chest area with her head and face out of shot. Mr McGregor used electronic devices supplied by SLQ to take the photographs.

[2] The State Librarian, Ms Wright, became aware that Mr McGregor had photographed a solicitor employed by another government entity in late 2012. Ms Wright reported this behaviour to the Crime and Misconduct Commission and to the Head of Department, Mr Reid. An independent investigation was then undertaken after advice from the Crown Solicitor.

[3] In early 2013, Mr McGregor met with the State Librarian and his electronic devices were confiscated. He later collapsed at work and was admitted to psychiatric care. Over 2,500 images were found on the confiscated devices, a number of which focused on the chest area of female employees of the SLQ. These included the photographs of the appellant's chest area. She was identifiable because some of the images included her face.

[4] The appellant only became aware of the photographs in March 2013 after hearing rumours about Mr McGregor's actions. The appellant approached a work colleague who followed up her concerns with Ms Winlaw, the Executive Manager of People and Planning. Ms Winlaw advised that there had been an investigation. The appellant met with the State Librarian and Ms Winlaw on 2 May 2013 when the State Librarian confirmed that Mr McGregor had taken covert photographs of the appellant.

[5] The appellant asked to see the images after the meeting on 2 May 2013 and again on 6 May 2013. Later that day she left the work place early. The appellant commenced sick leave on 14 May 2013 and again asked to see the photographs. The images were posted to her home and received on 17 May 2013.

[6] Ms Waugh made a successful WorkCover claim for psychiatric injury. The Regulator set aside that decision and substituted a new decision to reject the application. That decision was upheld on appeal by the Commission.

[7] The Deputy President found that the injury did not arise out of, or in the course of, the appellant's employment as 'the workplace was merely the background or setting in which the inappropriate behaviour took place'.

[8] Further, he found that the significant contributing factor was the taking of the photographs by Mr McGregor, not the appellant's employment.

[9] Finally, the Deputy President found that the manner in which SLQ dealt with the issue was reasonable management action taken in a reasonable way, meaning the appellant's injury fell outside of the legislative definition of injury.

[10] The appellant submits that the Deputy President erred in making each of those findings.

[11] The stressors identified by the appellant at the trial are as follows:**

At a meeting with Janette Wright, the State Librarian/CEO and Katherine Winlaw, Acting Director Corporate Service, I was informed of the existence of photographs of me, taken without my consent by Bruce MacGregor. When I asked what the photos contained I felt I was diverted and was told the photos showed me fully clothed. I found this comment unusual given that I would not have expected photos of me without clothes to be in Mr MacGregor's possession.

After reconsidering the situation I requested copies of the photos and was told that they would be provided.

I followed up with regard to the photos as I had still not received the copies as promised.

I again requested the photos and Katherine Winlaw said words to the effect of 'Oh Astrid, your head is not even in most of them'. This statement made me feel unvalued as a professional, objectified and demoralised.

I again requested copies and was again told that the photos were not available. I went home on sick leave at around lunch time.

At 9:30pm I emailed Katherine Winlaw and Val Johnson and again requested copies of the photographs.

I received by registered post 14 photographs, which showed me in a work situation in a purple dress. I was unaware of the photos being taken. 6 of the photos are specifically concentrated on the breast area with my face not even being in the shot. I felt violated, embarrassed, vulnerable and physically sick. I attended my local doctor that day and received a workers compensation certificate. A WorkCover claim was lodged on 20 May 2013.

[12] It was accepted in the Commission and in submissions before this court that these stressors fell into two classes:

**(1) The primary stressor: the taking of the photographs by Mr McGregor, constituting sexual harassment; and

(2) The secondary stressor: the subsequent actions taken by management in responding to and advising the appellant.

[13] At the relevant time, s 32 of the Workers Compensation and Rehabilitation Act 2003 provided:

"(1) An injury is personal injury arising out of, or in the course of, employment if the employment is a significant contributing factor to the injury.

(5) Despite subsections (1) and (3), injury does not include a psychiatric or psychological disorder arising out of, or in the course of, any of the following circumstances -

(a) reasonable management action taken in a reasonable way by the employer in connection with the worker's employment;

(b) the worker's expectation or perception of reasonable management action being taken against the worker;

Did the injury arise out of, or in the course of, the employment?

**[14] The learned Deputy President held that the workplace was merely the background or the setting in which the inappropriate behaviour took place. In reaching that conclusion the Deputy President referred to the decision of de Jersey P in Croning v Workers Compensation Board[1]. Since Croning was decided this type of legislation has been subjected to close examination.

[15] Before turning to the more recent decisions on this topic it is necessary to identify the nature of the injury. The learned Deputy President found:

"[5] It is probable that Ms Waugh suffered a personal injury, a psychiatric or psychological disorder. Dr Khoo, her treating psychiatrist diagnosed her as suffering an adjustment disorder with mixed anxiety and depressed mood."

"[6] However, even if that is the case, I cannot be satisfied that the injury arose out of, or in the course of, her employment. Although the photographs were taken clandestinely whilst the appellant was at work, the workplace was merely the background or setting in which the inappropriate behaviour took place."

[17] Although it is not completely clear, it appears that the Deputy President was satisfied that Ms Waugh did suffer a psychiatric injury. The unchallenged evidence on this point came from two psychiatrists: Dr Khoo and Dr Richardson. Their diagnosis was the same, namely, that Ms Waugh was suffering from an adjustment disorder with mixed anxiety and depressed mood.

[18] Dr Khoo opined that her "symptoms developed less out of feelings of being inappropriately photographed against her will, and more in the context of feeling totally let down... by her workplace and the management."

[19] Dr Richardson noted that "Ms Waugh... feels that there has been a gross violation of her professional standards and her personal self and she understands that up to 2000 images may have been taken by Mr McGregor and that in short this represents an issue of some significant proportions that is devastating to a whole range of staff members particularly the female staff members who without their consent have been filmed serially by this man over a number of years along with other aspects of sexual harassment." (emphasis added)

[20] Dr Richardson also said that: "Ms Waugh believes that Mr McGregor may be getting off 'scot-free' due [to] the actions of management and that there is every possibility that he may reoffend".

[21] In his conclusions, Dr Richardson made the following remarks:

"With respect to a DSM IV diagnosis, I believe the claimant suffers from an Adjustment Disorder with Depressed and Anxious mood. It is clear that previously she has a history of Depression following the breakdown of her relationship in 2002 but on this occasion it appears that her mood symptoms are directly the result of the experiences in the work place which involve Mr McGregor taking unwanted photographs of up to 2000 images of unaware female staff members over the course of the last number of years.

In particular Ms Waugh has been in receipt of 12 photographs forwarded to her which show her body being photographed without her consent or permission by Mr McGregor. ...

Ms Waugh understands the matter is before C.M.C. who are investigating these particular images.

From Ms Waugh's point of view, the stressors in this case involve both her knowledge and awareness that photographs were taken of her without her permission that were of a sexual nature but also the awareness that up to 2000 images have been taken by Mr McGregor of various members of staff including an underage girl aged 15.

She is extremely distressed by this particular violation of herself and the other staff members and as such has taken police action due to what she feels is lack of management action in that she believes that they are more supportive of Mr McGregor then they are to the female staff in the State Library.

In my opinion I consider her symptomology at this time to be attributable directly to the work-related injury in question." (emphasis added)

"So an adjustment disorder - any type of adjustment order from a psychiatric point of view needs a specific stressor and the specific stressor that has caused the adjustment disorder in this patient has been her workplace stressor referred to earlier in the report... to quickly summarise those they are the fact that, firstly, she was the subject of a clear kind of breach of professional boundaries and her - and her civil liberties in terms of these photographs that were taken of her, and the fact - I think another considerable stressor and something that added to perpetuating her condition has been the - her perceived lack of support from her workplace and - but not only in terms of their not understanding the impact - or not anticipating the impact that this may very reasonably have had on her personally, but also in terms of the perceived lack of understanding and support in an ongoing fashion in terms of how this was handled, not being able - or maybe it - feeling somewhat dismissed in terms of her concerns with regard to what may be in the photographs and then sort of getting access to the photographs and then sort of also rather than having her own - you know, how she might have reacted to it, rather than having that validated, she sort of very much felt that she was made to - she felt that the management tended to think that the person who actually took the photos, they made her feel that he was in fact mentally ill and he had resigned and that they were hoping that he would make a full recovery. So it sort of tended to sort of be quite divergent in terms of how she might have felt that her own liberties were intruded upon by this whole information." (emphasis added)

"I would say that... That her symptoms developed at least as much due to feeling let down by her workplace and her management as much as being photographed against her will.... The symptoms developed out of both of those - both of those situations. I'd say still probably that she felt that it was more out of the context of being let down by her workplace and her management." (emphasis added)

"Just say that question, please. More out of - out of the context of management issues than the - than the photograph issue; is that so? - - - Yes, although both are important, I say the second one has led to - has had a greater impact on the perpetuation of her symptoms." (emphasis added)

[25] When Dr Khoo referred to be "second" issue he was referring to be "management issue" which was the second category of stressors nominated by Ms Waugh.

[26] Dr Richardson gave evidence relating to the relative importance of the stressors and said:

"I believe that the primary stressor has been her distress at the revelations that these photographs had been taken and her distress that they were taken of her while she was performing her working role, which in turn made her feel quite violated and invalidated in terms of her work. Secondary to that comes the delay in - that she perceived in being able to have a look at the photos and receive support from management, and third was that other people may have been - may be, you know, impacted upon by this, particularly the mother of a girl who may have been in one of the photos." (emphasis added)

[27] Of particular importance is the response by Dr Richardson to a question from the Deputy President. He was asked:

"You said that her concern was that there were photos taken of her while she was performing her work role. Do I take it from that if she had had photos taken of her that she was not aware of while she was walking in the street or somewhere other than at work that she wouldn't have had that concern? - - - Yes, your Honour. I believe that given that she was performing a role for which she was being paid and regarded as a professional, that what distressed her significantly was that whilst performing this role there were photographs taken of her that were of a sexual nature, taken without her consent, that one could argue had someone taken that photo perhaps out in the community, one could argue that she would equally be distressed by someone photographing her in a way that seemed gratuitous.

Yes? - - - But in this case, I feel that she was more distressed because it was complete invalidation and demeaning of her in terms of her working role as a professional woman." (emphasis added)

[28] In holding that the workplace was merely "the background or setting in which the inappropriate behaviour took place", the Deputy President did not take into account the unchallenged evidence of the expert witnesses that the fact that the photographs were taken at the workplace was integral to the development of the psychiatric injury.

[29] It is made clear in the evidence of both Dr Khoo and Dr Richardson that the effect of the photographs being taken (and then becoming known to Ms Waugh) was to invalidate and demean Ms Waugh in her working environment. It is understandable that the effect on Ms Waugh was to make her feel violated in terms of her work. The distress she felt was greatly magnified by the fact that the photographs were taken at work and by a superior employee.

[30] This is a case in which the employment was more than just the setting in which the inappropriate behaviour took place. The effect of the behaviour and the intensity of the impact it had was magnified by the fact that it occurred at the workplace. In this case, the Deputy President failed to take those issues into account and, thus, erred in arriving at his decision as to whether or not Ms Waugh had suffered a compensable injury.

[31] In Comcare v PVYW[2] the High Court revisited and explained its earlier decision in Hatzimanolis v ANI Corporation Ltd[3]. Although the principle in Hatzimanolis concerns liability for an injury which occurs when an employee undertakes a particular activity the discussion about the general principles can guide consideration of different types of injuries. The majority in Comcare said:

"[50] It has earlier been observed that the Hatzimanolis principle, when it is appropriate to be applied, effects a connection between the circumstances in which the employee sustains injury and the employment. The principle may create a temporal element, in the notion of an interval, but it also creates a factual association or connection with the employee's employment.

[53] The connection or association spoken of is not the causal connection which is attributed to the expression 'arising out of... the employee's employment' in the definition of 'injury' in the... Act. It is accepted that compensation may be payable in respect of an injury which is suffered 'in the course of' the employee's employment notwithstanding that there is no such causal connection. The connection presently spoken of is by way of an association with the employment. In Kavanagh v The Commonwealth, Dixon CJ said that 'no direct... causal connection... is proposed as an element necessary to satisfy the conception of an injury by accident arising in the course of the employment but only an association' with the employment.

[54] Dixon CJ expressed that association in two ways. In a positive sense it might be said that, had it not been for the employment, the injury would not have been sustained. Put negatively, and perhaps more usefully for present purposes, it requires that 'the injury by accident must not be one which occurred independently of the employment and its incidents'."

[32] The evidence presented to the Commission demonstrated the necessary association between the injury and the employment. The expert evidence established that, had it not been for the employment, the injury would probably not have been sustained. It follows, then, that the appellant did demonstrate that her injury arose out of, or in the course of, employment.

Was the appellant's employment a significant contributing factor to the injury?

[33] As the injury suffered by Ms Waugh is a psychiatric or psychological disorder, the next hurdle for her was to satisfy the Commission that her employment was a significant contributing factor to the injury.

[34] This element is satisfied on the basis of the evidence from Ms Waugh and the two psychiatrists. The Deputy President held that the significant contributing factor was the taking of the photographs by Mr McGregor. He said that "this had nothing to do with the employment". For the reasons given above, that is, with respect, inconsistent with the undisputed evidence from the psychiatrists as to the cause of the psychiatric disturbance.

[35] The appellant complained that management had "brushed her off" after she became aware that she might have been photographed without her consent. There was a delay in advising Ms Waugh of the existence of the photographs and that, no doubt, had some effect upon her.

[36] The Deputy President held that management's manner of "advising and dealing" with Ms Waugh did not amount to unreasonable management action. Some of the evidence is referred to in [9] of the reasons but it is not a complete examination of all the relevant evidence placed before the Commission. The principal complaint made against the actions of management was that Ms Waugh was not allowed to see the photographs and she was refused access to the photographs until 14 May 2013. It was also alleged by Ms Waugh that two of the managers were taking an unjustifiably benign view of Mr McGregor's conduct compared to that of the circumstances of Ms Waugh.

[37] Evidence was given of a consultation process, including legal advice, and the employer took what it describes in its written submissions as steps which were "reasonable and appropriate in the circumstances".

[38] The evidence before the Commission was that Mr McGregor was under psychiatric care and the employer had been advised that he was on "suicide watch". The employer categorises the information given to Ms Waugh as simply being advice as to what had happened and that Mr McGregor was under psychiatric care. This, it was submitted, did not amount to supporting Mr McGregor over the appellant.

[39] The Regulator argues that the management action was reasonable and was taken in a reasonable way and, therefore, the injury is excluded from the operation of s 32 of the Act.

[40] The problem which faces the argument advanced by both respondents is that the Deputy President did not deal with substantial aspects of the evidence. In particular, he did not advert to, or deal with indirectly, the following matters:**

**_(a) the employer's delay in advising Ms Waugh of the photographs and the nature of the photographs;

(b) that the employer did not say anything to Ms Waugh until she approached another employee about the matter;

(c) the omission by the employer to impose any disciplinary action or sanction on Mr McGregor as a result of the conduct;

(d) the action of the employer in allowing Mr McGregor to resign at the expiration of his contract in July 2013 (after he had given notice in March 2013);

(e) the tone and expression used in the correspondence to employees which advised of Mr McGregor's resignation and which could reasonably be seen to be, if not in support of Mr McGregor, then a benign acceptance of his conduct; and

(f) despite having reported a similar incident concerning an employee of another government entity to the Crime and Misconduct Commission, the employer did not report the incident concerning Ms Waugh or any other employee of the respondent._**

**[41] The Deputy President erred in not taking into account the matters referred to above. It must be acknowledged that this is a set of circumstances which is most unusual and would test the best intentioned employer. Nevertheless, the reasonableness of action by management has to be considered "in connection with the worker's employment". That requires consideration of all of the disparate elements which contribute to the injury.

[42] In the light of the nature of the injury and the circumstances in which it came about, while the conduct of the employer may have been reasonable management action taken in a reasonable way with respect to the employment of Mr McGregor, the same cannot be said of the conduct so far as it concerned Ms Waugh. Each of the matters referred to above might, by themselves, not be susceptible to criticism. But management action can be viewed in a global way and, in the unusual circumstances of this case, the effect of the various omissions and the steps which were taken constitute management action which was not reasonable.

[43] The appellant has demonstrated that the decision below was infected with error. The appeal is allowed. The decision of the Commission is set aside and, in its place, the order is that the decision of WorkCover is confirmed.**

[1] (1987) 156 QGIG 100.

[2] [2013] HCA 41; (2013) 250 CLR 246.

[3] [1992] HCA 21; (1992) 173 CLR 473.