Workers Compensation Psychological Injury: Is an employer’s retrenchment action reasonable when it predominantly causes a worker’s psychological injury?

Introduction
Based on the authentic Australian judicial case Dickens v Westpac Banking Corporation [2025] NSWPIC 492, this article disassembles the Court’s judgment process regarding evidence and law. It transforms complex judicial reasoning into clear, understandable key point analyses, helping readers identify the core of the dispute, understand the judgment logic, make more rational litigation choices, and providing case resources for practical research to readers of all backgrounds.

Chapter 1: Case Overview and Core Disputes

Basic Information:

Court of Hearing: Personal Injury Commission of New South Wales
Presiding Judge: Fiona Seaton, Member
Cause of Action: Claim for weekly benefits compensation and payment of medical expenses for a psychological injury under the Workers Compensation Act 1987 (NSW).
Judgment Date: 19 September 2025

Core Keywords:

Keyword 1: Authentic Judgment Case
Keyword 2: Workers Compensation Act 1987 (NSW)
Keyword 3: Psychological Injury
Keyword 4: Employer Retrenchment Action
Keyword 5: Section 11A Defence (Reasonableness)
Keyword 6: Weekly Benefits and Medical Expenses

Background:

The Applicant, Ms Viisti Dickens, was employed by the Respondent, Westpac Banking Corporation, as an Executive Manager in its Environmental, Social and Governance (ESG) Program from 15 November 2021 until her redundancy on 27 May 2022. Prior to and during her employment, Ms Dickens faced personal medical issues requiring surgery. She alleged that during her medical leave, the Respondent commenced a restructuring process, informed her of her redundancy, and subsequently failed to redeploy her into comparable roles, leading to a psychological injury. The Respondent accepted that Ms Dickens sustained a psychological injury but disputed liability by raising a defence under section 11A(1) of the Workers Compensation Act 1987, asserting that the injury was wholly or predominantly caused by reasonable action taken with respect to her retrenchment. The Respondent also disputed the extent and quantification of her entitlement to weekly benefits and medical expenses.

Core Disputes and Claims:

The core legal dispute between the parties revolved around whether the Respondent’s actions concerning Ms Dickens’ retrenchment were “reasonable” within the meaning of section 11A(1) of the Workers Compensation Act 1987 (1987 Act). If the actions were found to be reasonable, the Respondent’s defence would succeed, and no compensation would be payable for the psychological injury. If the actions were found to be unreasonable, the defence would fail. The Applicant sought weekly benefits compensation for specific periods of incapacity and payment of reasonably necessary medical or related expenses.

Chapter 2: Origin of the Case

Ms Viisti Dickens joined Westpac Banking Corporation in November 2021 as an Executive Manager in the ESG Program, a role she understood to be ongoing for 18 to 24 months, a representation confirmed by her Chief Sustainability Officer. With over two decades of program management experience, Ms Dickens transitioned from a previous role, incurring a significant financial loss in the process. Immediately prior to commencing with Westpac, Ms Dickens had been diagnosed with Hashimoto’s/thyroid autoimmune disease and fibroids.

Early in her tenure, Ms Dickens found herself undertaking a very high workload, performing both her PMO (Program Management Officer) and PD (Program Director) duties, and even covering a second position during a holiday period, without additional compensation. Despite the demanding work, she reported being psychologically well. However, in December 2021, unexpected medical issues arose, necessitating surgery. She moved her planned surgery date from January to February 2022 to accommodate team and program delivery requirements, working long hours up until the night before her procedure on 24 February 2022. She anticipated a return to work within four to six weeks, possibly part-time from home.

During her medical leave, a series of events unfolded that Ms Dickens described as detrimental. In late January/early February 2022, informal discussions began about a business restructure, which was formally announced in February 2022, impacting over 1,200 roles across the organisation. Ms Dickens’ work duties were changed, reducing her seven workstreams to three. Crucially, on 18 February 2022, in a one-on-one meeting with Ms Ludgate, she was instructed to copy all her files onto a shared drive, and upcoming meetings were cancelled, leading her to believe her job would be gone upon her return.

On 22 March 2022, while still on medical leave, Ms Dickens was formally informed her position was to be made redundant. She was given less than two working days to provide feedback on this decision. She questioned how a “new” Project Manager role, for which she had interviewed a candidate (Mr Bhovar) as a temporary backfill, could replace her ongoing work, especially when the overall aim was cost-cutting and redundancy. She further discovered that an Executive Manager, ESG Program role (with the same title as her original position) and another Project Officer role were created and filled by direct appointment during her redeployment period, none of which were offered to her.

Ms Dickens asserts that her redeployment process was not genuine or fair. She felt excluded and unfairly treated, particularly given her extensive experience and proven capacity in similar roles. She experienced significant mental distress, depressed mood, acute anxiety (including panic attacks requiring emergency department visits), and physical symptoms following these events. This psychological injury, she contended, was a direct result of the unreasonable actions of the Respondent regarding her retrenchment and the workplace environment during her medical leave, significantly impacting her ability to return to consistent full-time employment.

Chapter 3: Key Evidence and Core Disputes

Applicant’s Main Evidence and Arguments:

• Statements of Ms Viisti Dickens: Signed 9 July 2024, 16 October 2024, 28 March 2025, and 11 April 2025. These detail her employment history, the representations made about the role’s ongoing nature, her medical conditions, the change in her role prior to leave, the notification of redundancy while on leave, her perception of unfair treatment during the redeployment process, the creation and direct appointment of allegedly comparable roles not offered to her, and the severe psychological and physical symptoms she experienced. She specifically challenges the Respondent’s witnesses regarding her willingness to perform project management tasks and the genuineness of the cost-saving restructure.
• Medical Reports:
  • Dr Stuart Morris (Treating General Practitioner): Reports from 17 January 2024 confirm a severe impact on mental health due to redundancy during medical leave, leading to exacerbation of pre-existing anxiety, and new diagnoses of panic disorder and workplace-induced post-traumatic stress disorder. Certificates of capacity document periods of no work capacity and graduated return to work capacities from 10 October 2023 to 17 September 2024.
  • Ms Vyda Chai (Clinical Psychologist): Reports from 12 March 2024, 1 October 2024, and 16 November 2024 diagnose post-traumatic stress disorder, major depressive disorder, and generalised anxiety disorder arising from workplace stress and redundancy. She emphasises the profound impact on Ms Dickens’ employment stability and the necessity of ongoing care.
• Financial Documents: Wages Schedule (22 March 2022 to 17 September 2024) detailing maximum weekly compensation amounts and actual earnings, showing a total loss of $198,187.13. Medical Expenses Schedule totaling $7,842.20 for consultations. Tax records and income statements from various employers.
• Correspondence: Emails (e.g., from Ms Siobhan Toohill re ESG Program changes, text message from Ms Ludgate re restructure meeting), letters of retrenchment, dispute notices, and internal review requests.
• Job Description: Executive Manager, ESG Program (21 July 2021) outlining project management, governance, change, and communications responsibilities.

Respondent’s Main Evidence and Arguments:

• Witness Statements:
  • Mr Thomas Spratt (Senior Career Transition Consultant): Statements dated 6 November 2024 and 20 May 2025. Describes assisting Ms Dickens with redeployment, providing support materials, conducting meetings, and tailoring job lists. Asserts the redeployment process was standard and reasonable, despite Ms Dickens’ emotional state and initial narrow focus on ESG roles. States Ms Dickens declined a role and was unwilling to broaden her search.
  • Ms Allison Berridge (Head of Human Resources, Corporate Services): Statements dated 8 November 2024 and 20 May 2025. Knew Ms Dickens from late January 2022. Argues the restructure was genuine (cost efficiency, reduction of roles). Asserts Ms Dickens was consulted, provided standard consultation materials, and engaged multiple times. Claims Ms Dickens previously stated she preferred not to do project management work and declined a PMO role. Highlights the generosity of ex gratia sick leave provided. States new roles filled were not comparable (lower level, different responsibilities) to Ms Dickens’ role.
  • Ms Ronna Ludgate (Head of BT Transformation): Statements dated 12 November 2024 and 20 May 2025. Claims Ms Dickens preferred not to do program management/administrative work and wanted to focus on change and communications. States Ms Ludgate “inferred” this preference and offered the PMO role to someone else. Argues the overall restructure and consultation process was standard and could not be delayed due to one person’s medical leave. States new roles were not comparable or were junior/administrative roles Ms Dickens had previously declined.
• Medical Reports:
  • Dr Peter Young (Independent Psychiatrist): Reports of 22 January 2024 and 4 June 2024. Diagnoses adjustment disorder (70% employment causation). Initially opined Ms Dickens was fit for 30 hours/week in a less complex role, but later agreed she could return to an equivalent pre-injury role. Noted some symptom exaggeration.
• Internal Documents: Various s 78 notices, s 287A internal review notices, emails, ESG Program slides, company restructure charts.

Core Dispute Points:

1. Reasonableness of Employer Action (s 11A): Was the Respondent’s overall conduct regarding Ms Dickens’ redundancy and redeployment objectively reasonable, particularly concerning:
   • Communication of redundancy while Ms Dickens was on medical leave.
   • The duration and adequacy of the consultation period given her medical leave.
   • The alleged change in Ms Dickens’ role prior to her leave and the Respondent’s interpretation of her preferences.
   • The creation of new/additional ESG roles during a period of supposed cost-cutting and redundancy.
   • The Respondent’s failure to offer Ms Dickens the opportunity to apply for or be directly appointed to these new/additional roles.
   • The genuineness and legitimacy of the redundancy itself.
2. Entitlement to Weekly Benefits (ss 36 & 37): Given the psychological injury, what was Ms Dickens’ capacity for work (no capacity/current capacity) during specific periods from 22 March 2022 to 17 September 2024?
3. Entitlement to Medical Expenses (s 60): Are the claimed medical or related expenses reasonably necessary as a result of the injury?

Chapter 4: Statements in Affidavits

The litigation involved a detailed exchange of statements, primarily through affidavits, where both the Applicant and the Respondent presented their narratives and factual accounts, attempting to shape the Court’s understanding of the events leading to the psychological injury claim.

The Applicant, Ms Viisti Dickens, relied on her statements to meticulously outline the sequence of events. She underscored the initial representations of an ongoing role, her commitment to the Respondent (including moving her surgery date), the unexpected alteration of her role’s focus just before her medical leave, and the subsequent notification of redundancy while she was recovering. Her affidavits contained specific references to emails and other correspondence to corroborate her claims regarding communication breakdowns, her expressed willingness for diverse workstreams, and her lack of awareness or opportunity regarding new roles. Ms Dickens’ statements aimed to portray a pattern of unreasonable and insensitive conduct by the Respondent, particularly in light of her vulnerable medical state, which she asserted led directly to her psychological injury. She consistently challenged the Respondent’s claims that she had declined suitable roles or that the redeployment process was fair and transparent.

Conversely, the Respondent relied on the statements of Mr Thomas Spratt (career transition consultant), Ms Allison Berridge (Head of HR), and Ms Ronna Ludgate (Head of BT Transformation) to construct its defence. These statements aimed to demonstrate that the Respondent’s actions were, at all times, reasonable and compliant with company policy and enterprise agreements. Mr Spratt’s affidavits detailed the redeployment support offered, the provision of resources, and his efforts to assist Ms Dickens in finding new roles. Ms Berridge’s statements focused on the broad organisational restructure, the standard consultation process applied to all impacted employees, and the “generosity” of the ex gratia sick leave provided to Ms Dickens. Ms Ludgate’s affidavits emphasised Ms Dickens’ alleged preference not to engage in certain project management tasks, leading to the inference that she would not be interested in relevant roles. The Respondent’s affidavits also contained assertions about the non-comparable nature (lower level, different remuneration/responsibilities) of the new roles filled by direct appointment, thereby justifying why they were not offered to Ms Dickens.

A critical aspect of the “showdown” in affidavits lay in the conflicting expressions of the same facts. For instance, Ms Dickens explicitly stated she did not complain about project management work and asked to remain across various workstreams. In stark contrast, Ms Ludgate and Ms Berridge recalled Ms Dickens expressing a clear preference against project management, leading to assumptions about her suitability for certain roles. These direct contradictions in the evidentiary statements became central to revealing the “boundary between untruths and facts,” as the Member would ultimately need to weigh the credibility and consistency of these accounts against other documentary evidence.

The Judge’s procedural directions regarding the affidavits were strategically intended to clarify these contentious points. By requiring detailed statements and responses, the Court sought to distil the precise factual disagreements and understand the underlying basis for each party’s position. This process of detailed written evidence served to streamline the arbitration “on the papers” by providing a comprehensive record of each party’s arguments and supporting evidence, allowing the Member to scrutinise inconsistencies and draw objective conclusions without the need for extensive oral cross-examination.

Chapter 5: Court Orders

Prior to the final hearing, the Member overseeing the case issued several procedural arrangements and directions:

• Conciliation Conference and Arbitration Hearing: The matter was listed for a conciliation conference followed by an arbitration hearing on 4 July 2025 in Sydney.
• Admission of Additional Documents: During the conciliation phase, the Applicant’s “Application to Lodge Additional Documents” dated 24 June 2025 was admitted into evidence.
• Unresolved Dispute: Despite best endeavours, agreement could not be reached during conciliation, and the claim remained in dispute.
• Determination “on the Papers”: The parties jointly requested that the matter be determined “on the papers,” without the need for an oral hearing. The Member determined this to be an appropriate course of action for the proceedings.
• Submission Directions: Following the decision to determine the matter “on the papers,” directions were issued on 4 July 2025 for both parties to lodge written submissions. These submissions were subsequently lodged with the Commission.
• Sufficiency of Information: The Member was satisfied that sufficient information had been supplied to make a determination of the issues in dispute without an oral hearing, in accordance with section 52(3) of the Personal Injury Commission Act 2020 and Procedural Direction PIC2.

Chapter 6: Hearing Scene: Ultimate Showdown of Evidence and Logic

The arbitration of Dickens v Westpac Banking Corporation, decided “on the papers,” presented a meticulous weighing of documentary evidence against the backdrop of the parties’ submissions. The Member’s task was to objectively assess whether Westpac’s actions regarding Ms Dickens’ retrenchment were “reasonable” under section 11A(1) of the 1987 Act, especially considering the psychological injury sustained. The ultimate showdown of evidence and logic centred on the perceived fairness and consistency of Westpac’s conduct, particularly as Ms Dickens was on medical leave during a critical period.

The Member systematically analysed four overlapping actions that Ms Dickens contended were unreasonable: the alteration of her role prior to leave, the assumption that she had declined project management roles, the creation and direct appointment to a “new” Program Manager role, and the creation and direct appointment to an additional Executive Manager ESG role.

The narrative reconstruction reveals logical inconsistencies in Westpac’s position. Ms Ludgate’s claim that Ms Dickens was already in an Executive Manager Change and Communications role in January 2022 was directly contradicted by Ms Dickens’ original job description and recruitment timeline, which clearly established her as an Executive Manager, ESG Program, with a broader remit. The Member noted:
“Ms Ludgate’s evidence is that in January 2022 when she started in her role the applicant was in the role of Executive Manager Change and Communications for the ESG Program. This is not correct. The evidence is that she was recruited and employed from 15 November 2021 in the position of Executive Manager, ESG.”
This established a foundational discrepancy, suggesting a lack of familiarity with Ms Dickens’ actual role or a retrospective reframing by Westpac.

Further, the Member scrutinised Ms Ludgate’s assertion that Ms Dickens had a preference not to do project management work. Ms Ludgate claimed this led her to “infer” Ms Dickens was uninterested in the PMO role, which she then offered to someone else. However, Ms Dickens’ evidence explicitly stated she did not complain about project management work, rather she asked to remain across various workstreams, consistent with her broad ESG Manager role. The Member’s finding on this point was critical:
“I prefer the applicant’s evidence on this issue. Ms Ludgate initially inferred the applicant was not interested in the role and there is no evidence the applicant declined it. The retrenchment process was unreasonable as decisions were taken based on an incorrect assumption that the applicant was not only not interested in program management roles but had in fact declined a role.”
This finding directly undermined the reasonableness of Westpac’s subsequent actions, as a key decision to exclude Ms Dickens from a relevant role was based on an unsubstantiated inference.

The creation and direct appointment of Mr Bhovar to a “new” Program Manager role just before Ms Dickens’ medical leave also weighed heavily. This occurred during a period of supposed cost-cutting and reduction in roles, yet an ongoing position was created and filled without Ms Dickens’ knowledge or opportunity to apply. The Member determined:
“In the circumstances, the action of creating an ongoing role and filling it by direct appointment without the applicant’s knowledge in the context of the retrenchment process was in my view unreasonable.”
This demonstrated an inherent contradiction in Westpac’s stated rationale for the restructure and directly impacted Ms Dickens’ prospects of redeployment.

Finally, the creation of an additional Executive Manager, ESG Program role (the same title as Ms Dickens’ original position) in May 2022, during her redeployment period, further highlighted the unreasonableness. This role was also filled by direct appointment, again without being offered to Ms Dickens. Despite Westpac’s argument that this role was at a lower “Role Level” and thus not comparable, the Member was not persuaded:
“Despite an aim of the restructure being cost efficiency and a reduction in roles, in May 2022 during the applicant’s redeployment period two new positions in ESG were created and filled by direct appointment. The Executive Manager ESG position was not disclosed to or offered to the applicant, and her evidence is that she did not have an opportunity to apply for the role. I find this action to have been unreasonable in all of the circumstances.”
The cumulative effect of these actions, particularly considering Ms Dickens’ medical leave and Westpac’s inconsistent approach to role creation and redeployment, formed the basis of the Member’s decision. The objective chain of evidence, revealing a pattern of decisions founded on incorrect assumptions and contradictory practices, compelled the finding that Westpac had not discharged its onus to establish reasonable action under section 11A.

Chapter 7: Final Judgment of the Court

The Personal Injury Commission determined that:

1. The applicant sustained a psychological injury pursuant to section 4 of the Workers Compensation Act 1987 (1987 Act) deemed to have occurred on 22 March 2022.
2. The respondent’s actions with respect to retrenchment were not reasonable within the meaning of section 11A of the 1987 Act.
3. The respondent has not discharged its onus to establish a defence pursuant to section 11A of the 1987 Act.
4. The respondent is to pay the applicant weekly benefits compensation for the period 22 March 2022 to 17 September 2024 pursuant to sections 36 and 37 of the 1987 Act, in accordance with the maximum weekly compensation amount indexed under section 34, for the following periods of capacity:
   • 22 March 2022 to 10 July 2022 – no current work capacity;
   • 11 July 2022 to 24 July 2022 – current work capacity 25.6 hours per week;
   • 25 July 2022 to 30 November 2022 – no current work capacity;
   • 1 December 2022 to 30 April 2023 – current work capacity 15 hours per week (2 days);
   • 1 March 2023 to 9 January 2024 – current work capacity 7 hours per week;
   • 10 January 2024 to 7 February 2024 – current work capacity 28 hours a week;
   • 8 February 2024 to 3 April 2024 – current work capacity 37.5 hours per week;
   • 4 April 2024 to 28 April 2024 – current work capacity 3 hours per week;
   • 29 April 2024 to 8 August 2024 – no current work capacity;
   • 9 August 2024 to 7 September 2024 – current work capacity 22 hours per week; and
   • 8 September 2024 to 17 September 2024 – current work capacity 23 hours per week.
5. The respondent is to pay the applicant’s reasonably necessary medical or related expenses pursuant to section 60 of the 1987 Act on production of accounts, receipts, and/or Medicare notice of charge.

Chapter 8: In-depth Analysis of the Judgment: How Law and Evidence Lay the Foundation for Victory

Special Analysis:

This case provides a significant analysis of the “reasonableness” of employer action in retrenchment, particularly when a psychological injury is involved. The unique aspect here is the confluence of a large-scale organisational restructure, a worker on medical leave, and the employer’s subsequent decisions regarding role changes and redeployment opportunities. The Member’s objective assessment of reasonableness under section 11A(1) of the 1987 Act goes beyond merely following formal procedures. It delves into the substance and fairness of the actions in the specific context of the worker’s circumstances. The cumulative impact of several individually contentious actions, when aggregated, was deemed to render the entire retrenchment process unreasonable, setting a high bar for employers to genuinely demonstrate reasonableness, especially when a worker is in a vulnerable state.

Judgment Points:

• Inferred Preferences vs. Actual Communication: The Member critically distinguished between Ms Ludgate’s “inferred” understanding of Ms Dickens’ preferences regarding project management work and the actual lack of explicit communication or refusal from Ms Dickens. This highlights the risk employers run when making critical decisions based on assumptions rather than direct, documented discussions, particularly in a redundancy context.
• Contradictory Actions in Restructuring: The Respondent’s stated aim of cost efficiency and role reduction was undermined by the simultaneous creation and direct appointment to new/additional roles within the ESG team. This factual inconsistency weakened the genuineness of the restructure as a defence for Ms Dickens’ redundancy.
• Unreasonable Conduct During Medical Leave: The decision to inform Ms Dickens of redundancy and to expect a rapid response while she was recovering from major surgery was deemed unreasonable. This underscores an employer’s heightened duty of care to employees who are medically vulnerable, even if adhering to a broader timeline for a large-scale restructure.
• Lack of Genuine Redeployment Opportunity: The failure to offer Ms Dickens the opportunity to apply for or be directly appointed to roles that were comparable to her skills and experience, or which she had effectively been performing, was a significant factor. The argument that certain roles were “lower level” or “not comparable” was viewed with skepticism given Ms Dickens’ extensive experience and the nature of her original role.

Legal Basis:

The judgment’s foundation rests on key provisions of the Workers Compensation Act 1987 (NSW):
* Section 11A(1) (Employer Defence): This is the central provision. It states that no compensation is payable for a psychological injury if it was wholly or predominantly caused by reasonable action taken by the employer with respect to (among other things) retrenchment. The Member’s analysis focused on whether Westpac’s actions met the “reasonable” threshold.
* Section 4 (Definition of Injury): Confirms that a psychological injury sustained by the applicant is a compensable “injury” if employment is the main contributing factor.
* Sections 36, 37, 34 (Weekly Benefits): These sections govern the entitlement to weekly payments for total or partial incapacity. Section 34 relates to the indexation of the maximum weekly compensation amount.
* Section 60 (Medical Expenses): This section dictates the employer’s liability for reasonably necessary medical or related expenses.
* Schedule 3, Clause 9 (Work Capacity Definitions): Defines “no current work capacity” and “current work capacity,” crucial for determining weekly benefit entitlements.

Evidence Chain:

The Member’s conclusion that Westpac’s actions were unreasonable was built upon a compelling chain of evidence:
* Applicant’s Job Description and CV: Demonstrated her extensive project management and governance experience, making her highly suitable for the very roles Westpac claimed she was uninterested in or unqualified for.
* Email Correspondence (Ms Toohill, Ms Turner): Showed that Ms Dickens’ role was originally broad and encompassed project management, and that initial discussions suggested her role would be ongoing and backfilled during her leave.
* Ms Dickens’ Account of Role Change: Her consistent statements detailing her non-agreement to a narrowed role and her complaints at the time weighed heavily against Ms Ludgate’s contradictory recollection.
* Evidence of New Role Creation/Appointments: Documentary evidence showing the creation of new Program Manager and Executive Manager ESG roles, often directly appointed, at a time when Westpac claimed to be reducing roles and without Ms Dickens being given the opportunity to apply.
* Medical Reports (Dr Morris, Ms Chai): Provided a clear timeline and diagnosis of psychological injury directly linked to the redundancy process, bolstering the causal link between the unreasonable employer actions and the injury.

Judicial Original Quotation:

The Member’s rigorous evaluation of Westpac’s actions is powerfully encapsulated in these excerpts:

“Ms Ludgate’s evidence is that in January 2022 when she started in her role the applicant was in the role of Executive Manager Change and Communications for the ESG Program. This is not correct. The evidence is that she was recruited and employed from 15 November 2021 in the position of Executive Manager, ESG.”
This statement immediately established a factual inaccuracy in Westpac’s witness testimony regarding Ms Dickens’ core role, casting doubt on the premise of subsequent decisions about her alleged preferences.

“I prefer the applicant’s evidence on this issue. Ms Ludgate initially inferred the applicant was not interested in the role and there is no evidence the applicant declined it. The retrenchment process was unreasonable as decisions were taken based on an incorrect assumption that the applicant was not only not interested in program management roles but had in fact declined a role.”
Here, the Member directly challenged Westpac’s justification for not offering Ms Dickens certain roles, finding that decisions were based on unsupported inferences, which critically undermined the reasonableness of the retrenchment process.

“In the circumstances, the action of creating an ongoing role and filling it by direct appointment without the applicant’s knowledge in the context of the retrenchment process was in my view unreasonable.”
This pivotal finding highlighted the contradiction between Westpac’s stated aim of cost-cutting and its actual practice of creating new, ongoing roles. The lack of transparency and direct appointment during a redundancy process was deemed objectively unreasonable.

“Despite an aim of the restructure being cost efficiency and a reduction in roles, in May 2022 during the applicant’s redeployment period two new positions in ESG were created and filled by direct appointment. The Executive Manager ESG position was not disclosed to or offered to the applicant, and her evidence is that she did not have an opportunity to apply for the role. I find this action to have been unreasonable in all of the circumstances.”
This final quote reinforced the cumulative unreasonableness of Westpac’s actions, demonstrating a pattern where Ms Dickens was systematically excluded from opportunities, despite the purported rationale of the restructure.

Analysis of the Losing Party’s Failure:

Westpac Banking Corporation’s defence under section 11A of the 1987 Act failed primarily because it could not discharge its onus of establishing that its actions were “reasonable” in all the circumstances. The core failures can be summarised as:
1. Reliance on Unsubstantiated Inferences: Westpac’s key argument that Ms Dickens had expressed a preference against project management roles, and even declined a specific role, was not supported by the evidence and was contradicted by Ms Dickens’ own credible testimony. Decision-making based on such inferences, rather than direct communication or documented refusals, was deemed unreasonable.
2. Contradictory Actions in Restructuring: The stated objective of cost-cutting and reducing the number of roles in the ESG team was undermined by the creation and direct appointment of new and additional ongoing roles (including one with the same title as Ms Dickens’ original position) during the very period of the restructure and redeployment. This inconsistency demonstrated a lack of objective justification for Ms Dickens’ redundancy and exclusion from these opportunities.
3. Lack of Transparency and Genuine Opportunity: Despite Ms Dickens being on medical leave, Westpac failed to genuinely engage her in the redeployment process for all suitable roles. Key roles were directly appointed without her knowledge or without offering her the chance to apply, despite her evident suitability. The process, while formally adhered to in some respects, lacked the substantive fairness required for “reasonable action.”
4. Insensitive Timing and Communication: Notifying Ms Dickens of redundancy and demanding a quick response while she was on medical leave recovering from surgery contributed to the overall finding of unreasonableness, indicating a failure to adequately consider her vulnerable state.

Implications

1. Employer Responsibility is Paramount: This case is a crucial reminder that while business restructures are legitimate, the manner in which they are executed, especially concerning vulnerable employees, must be objectively reasonable.
2. Document Everything: Clear, consistent, and documented communication, particularly regarding an employee’s preferences or refusals, is vital for employers to establish reasonableness. Inferences are not enough.
3. Genuine Opportunity in Redeployment: Employers must provide genuine and transparent opportunities for redeployment into suitable roles, even if it deviates from their initial restructure plans. Creating new roles while making others redundant, without offering them to impacted employees, carries significant risk.
4. Vulnerable Employees Require Extra Care: When an employee is on medical leave, employers have an amplified responsibility to ensure the redundancy process is handled with sensitivity and adapted to their circumstances, rather than rigidly adhering to standard timelines.
5. Workers’ Rights to Mental Health are Protected: This judgment reinforces that psychological injuries arising from unreasonable workplace actions are compensable. Workers should feel empowered to challenge processes that they believe have unfairly impacted their mental well-being.

Q&A Session

Q1: What does “reasonable action” mean under section 11A of the Workers Compensation Act 1987, and why was Westpac’s action deemed unreasonable in this case?
A1: “Reasonable action” under section 11A is an objective test, meaning the employer’s actions must be considered fair and appropriate by an objective standard, not just by the employer’s subjective belief. In this case, Westpac’s actions were deemed unreasonable due to several factors: they based decisions on an unsubstantiated inference that Ms Dickens did not want project management work; they created and filled new, ongoing roles during a supposed cost-cutting restructure without offering them to her; and they conducted the redundancy notification and consultation process while she was on medical leave, which was seen as insensitive and lacking genuine opportunity. These overlapping actions collectively rendered the process unreasonable.

Q2: Ms Dickens was on medical leave during the redundancy process. How did this factor into the Court’s decision?
A2: Ms Dickens’ medical leave was a significant factor. The Court found it unreasonable for Westpac to inform her of redundancy and demand a quick response while she was recovering from surgery. While a large-scale restructure cannot always be paused, the employer has an obligation to adapt its process to accommodate a vulnerable employee. The cumulative effect of the employer’s decisions, particularly the timing and lack of genuine engagement during her medical leave, contributed to the finding that the actions were unreasonable.

Q3: What are the practical takeaways for employees facing redundancy, especially those on medical leave?
A3: For employees, it is crucial to clearly and consistently communicate your preferences and capabilities in writing. Do not rely on verbal understandings alone. If on medical leave, ensure your employer is aware of your medical condition and any limitations, and advocate for an adapted redundancy or redeployment process. Actively seek information on available roles and express your interest in writing, even if you suspect a decision has already been made. This case demonstrates that “following procedures” may not always be enough for an employer if the substance of their actions is objectively unreasonable.

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[Appendix: Reference for Comparable Case Judgments and Practical Guidelines]

1. Practical Positioning of This Case

Case Subtype: Personal Injury and Compensation – Workers Compensation – Psychological Injury due to Employer Action (Retrenchment)
Judgment Nature Definition: Final Judgment

2. Self-examination of Core Statutory Elements

• Core Test (Workers Compensation Act 1987 – Psychological Injury):
  • Definition of Injury (s 4): A disease injury (including a psychological injury) arises out of or in the course of employment, where employment is the main contributing factor. This requires establishing a causal link between employment and the injury.
  • Employer Defence (s 11A(1)): No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers. This places the onus on the employer to prove both the causal link (wholly or predominantly caused by the action) and the reasonableness of the action.
  • No Current Work Capacity (Schedule 3, Clause 9): An injured worker has no current work capacity if the worker has a present inability arising from an injury such that the worker is not able to return to work either in the worker’s pre-injury employment or in suitable employment.
  • Current Work Capacity (Schedule 3, Clause 9): An injured worker has current work capacity if the worker has a present inability arising from the injury such that the worker is able to return to the worker’s pre-injury employment, or is able to return to work in suitable employment, but the weekly amount that the worker has the capacity to earn in any such employment is less than the weekly amount that the worker had the capacity to earn in that employment immediately before the injury.

3. Equitable Remedies and Alternative Claims

This case primarily concerns a statutory workers compensation claim, where equitable remedies would not typically apply directly to the compensation for injury. However, the spirit of equity, particularly principles of fairness and good conscience, underpinned the Member’s objective assessment of the employer’s “reasonableness.” While direct equitable claims like Estoppel or Constructive Trust were not pursued, the Court’s scrutiny of the employer’s conduct in a redundancy process echoes the importance of preventing unconscionable behaviour or actions that breach legitimate expectations of fair treatment. The reasonableness test in s 11A implicitly demands a standard of conduct from employers that aligns with broader notions of fairness, even in a statutory context.

4. Access Thresholds and Exceptional Circumstances

• Regular Thresholds:
  • Psychological Injury Causation (s 4): Employment must be the “main contributing factor.”
  • Employer Defence (s 11A(1)): The injury must be wholly or predominantly caused by the employer’s action, AND the action must be reasonable. The employer bears the onus of proving both elements.
  • Work Capacity (Schedule 3, Clause 9): The determination of weekly benefits is directly tied to a worker’s assessed capacity for work, distinguishing between “no current work capacity” and “current work capacity.”
• Exceptional Channels (Crucial):
  • In Workers Compensation, the primary “hard threshold” here is overcoming the s 11A defence. The case highlights that while general procedures might be followed, specific “blemishes” or a cumulative lack of substantive fairness can render an action unreasonable, even if it appears procedurally correct on the surface.
  • Suggestion: Do not abandon a potential claim simply because you do not meet the standard time or conditions. Carefully compare your circumstances against the exceptions above, as they are often the key to successfully filing a case. In particular, ensure clear documentation of all communications and any perceived inconsistencies in the employer’s actions during a redundancy process.

5. Guidelines for Judicial and Legal Citation

Citation Angle: It is recommended to cite this case in legal submissions or debates involving the interpretation and application of section 11A of the Workers Compensation Act 1987 (NSW), particularly in cases concerning psychological injury arising from employer retrenchment actions.
Citation Method:
* As Positive Support: When your matter involves an employer’s actions (e.g., making assumptions about employee preferences, creating new roles during redundancy without offering them, or handling redundancy insensitive to an employee’s medical leave) that are arguably unreasonable, citing Dickens v Westpac Banking Corporation [2025] NSWPIC 492 can strengthen your argument that such actions do not meet the “reasonable” threshold under s 11A(1).
* As a Distinguishing Reference: If the opposing party cites this case to argue the reasonableness of their retrenchment process, you should emphasize the unique circumstances of Dickens, such as the employee being on medical leave, the employer’s reliance on unsubstantiated inferences, or the creation of new roles inconsistent with cost-cutting, to argue that this precedent is not applicable to a factually distinguishable situation.

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Conclusion
Everyone needs to understand the law and see the world through the lens of law. The in-depth analysis of this authentic judgment is intended to help everyone gradually establish a new legal mindset: True self-protection stems from the early understanding and mastery of legal rules.

Disclaimer
This article is based on the study and analysis of the public judgment of the Personal Injury Commission of New South Wales (Dickens v Westpac Banking Corporation [2025] NSWPIC 492), aimed at promoting legal research and public understanding. The citation of relevant judgment content is limited to the scope of fair dealing for the purposes of legal research, comment, and information sharing. The analysis, structural arrangement, and expression of views contained in this article are the original content of the author, and the copyright belongs to the author and this platform. This article does not constitute legal advice, nor should it be regarded as legal advice for any specific situation.

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