In Dinning v Westpac Banking Corporation (2019), the NSW Workers’ Compensation Commission found that poorly executed performance management was to blame for a worker’s psychological injury.
The Westpac training coordinator claimed that her manager’s constant targeting about her work for two months, which culminated in a meeting where she was aggressively questioned for two hours, had caused to her to suffer a psychiatric injury and cease work.
Submitting medical evidence, the worker’s consultant psychiatrist told the NSW Compensation Court that the worker reported “ongoing work stress and work pressures which exacerbated to a stage of acute anxiety attack and became intense when she was being micromanaged by a supervisor”.
“She felt scrutinised and being watched all the time. She felt humiliated and demeaned and a state of discomfort being at work.
“The last straw was being told … that she would be managed and be supervised and watched constantly … [she] felt this very intimidating and humiliating.
“She lost confidence and questioning herself and has developed self-doubts,” the psychiatrist said.
Did the employer take reasonable management action?
Westpac conceded that the worker had suffered a psychological injury, but claimed that it was not liable to pay compensation as it had been caused through reasonable management action.
It submitted that although the meetings were not “formal performance-based meetings”, the worker’s performance appraisal was “conducted in a reasonable manner by way of a series of meetings and correspondence” and that it had “endeavoured to support and assist” the worker.
However, the worker’s lawyer held that these meetings did not amount to performance appraisal, but rather “appraisal of [the employer’s] management system which was in response to problems that were being identified in the normal course of running a business”.
“[E]ven if what was occurring was performance appraisal, the action taken was not reasonable,” he said.
NSW Compensation Court Arbitrator John Isaksen referred to a previous decision in his consideration, Irwin v Director General of School Education (1998), which established that the term “‘performance appraisal’ … [is] a rather precious and precise expression … framed within the context of other processes like ‘transfer’, ‘demotion’, ‘promotion’, ‘retrenchment’, or ‘dismissal’ of workers’”.
“Performance appraisal is not a vague, continuing, informal process … [but] … is more like a limited discreet process, with a recognised procedure to which the parties move in order to establish an employee’s efficiency and performance.”
Arbitrator Isaksen recognised that the employer was concerned about the quality of some of the worker’s work, but said the evidence “does not disclose any overall assessment or evaluation of the [worker’s] performance but rather a concentration on those parts of her work which officers of the respondent considered needed improvement”.
“There was no formal process put in place with a procedure recognised by both [the worker] and [management] to be performance appraisal,” he said.
“[The employer] is entitled to expect competent and efficient work from its staff. However, that must be weighed against the rights of the [worker], who should reasonably expect a proper process to be put in place if she were to be the subject of performance appraisal.”
The worker was awarded costs for the medical treatment of her psychiatric injury.