Stand-Down Not Unreasonable and Harsh – Makes Sense


Woodside Energy Ltd v Kieronski [2016] WADC 144

In this case, the District Court was considering the determination of an arbitrator on the question of “harsh and unreasonable” under the provisions of the Workers’ Compensation and Injury Management Act.

The worker, Catherine Kieronski had been stood down from her position as marketing liaison officer with Woodside, pending an investigation of various allegations relating to her conduct. The allegations involved serious breaches of Woodside’s code of conduct, including involvement in an inappropriate relationship with a Chinese customer and providing confidential information to parties external to Woodside.

In August 2013, Ms Kieronski was called to a meeting at which she was informed of the allegations and of the process of investigation which to was to be followed.

Two years earlier, Ms Kieronski had become aware of certain allegations that have been made in relation to her conduct and had developed stress and depression. She made a claim for compensation in August 2012 and liability was accepted, compensation and medical treatment were paid and a return to work programme instigated.

The meeting at which Ms Kieronski was informed of further allegations, therefore occurred after an initial period in which she had been suffering from a stress-related condition.

As a result of the information provided to her at the meeting in August 2013, Ms Kieronski experienced an increase in her symptomatology.

In November 2013, following the investigation that had been carried out, Ms Kieronski was given a letter inviting her to show cause why her employment should not be terminated. On 20 November 2013, she made a further claim for compensation which was the subject of the arbitrator’s determination and subsequent appeal to the District Court.

For the purpose of the arbitration and appeal, it was common ground that Ms Kieronski experienced the increase in her symptomatology following a meeting in August 2013 and that this resulted in a stress-related medical condition. It was also common ground that the meeting had involved discipline and that under the provisions of the Act, Ms Kieronski would not be entitled to compensation for any injury caused by stress resulting from that meeting unless the conduct of her employer was found to be “unreasonable and harsh”.

The arbitrator found in favour of Ms Kieronski. In essence, the arbitrator’s finding was based on her view that it was unreasonable and harsh for the employer to call Ms Kieronski to the meeting in question without prior notice or details of what the meeting was going to involve. The arbitrator also found that there had been an absence of procedural fairness in the process.

These conclusions made by the arbitrator were appealed on the grounds that the arbitrator’s reasoning involved errors of law.

On appeal in the District Court, Parry DCJ agreed with the submission made by counsel for the appellant that the arbitrator had erred in law in reaching her determination. The error involved the view that the content of the meeting of August 2013 was irrelevant to the determination of whether the conduct of the employer was unreasonable and harsh. On the contrary, Parry DCJ found that the content of the meeting was entirely relevant.  It was not a meeting in which the worker was confronted with an employer’s findings arising out of a concluded process of investigation as to which the employee has had no input, but rather a meeting at which she was informed of both the allegations and the process that would be followed. It would have been unreasonable and unrealistic to contemplate prior notice of such a process.

The worker also complained of the conduct of the employer when she was stood down, by confiscating her mobile phone and security pass and escorting her from the premises. The court however, considered there was no lack of procedural fairness in such actions.

The findings made in the District Court suggest that the arbitrator’s error arose out of a preoccupation with process, causing her to lose sight of what was actually going on. What the court found was happening, was that Ms Kieronski was being informed of serious allegations relating to her conduct which were to be investigated by her employer. She was not being informed of the findings made by her employer which she had not been afforded the opportunity to contest or to which she had been deprived of procedural fairness.

Outcome

The appeal was upheld and although the court conceded that it would have been a small step to substitute its decision on the worker’s application for compensation for that of the arbitrator, it was considered that the preferable course was to remit the matter for rehearing for different arbitrator.

If you would like more information about this update, please contact insurance and risk partner Vidal Hockless on (08) 9321 3755. 

The information published in this paper is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.