First off add some parenthesis to make it logically better
{@Date} in {?Start Date:} to {?Finish Date:} and
(
{WORKORDER.WOCATEGORY} = "Department1" or {WORKORDER.WOCATEGORY}= "Department2")
Or you could do it this way.
{@Date} in {?Start Date:} to {?Finish Date:} and
{WORKORDER.WOCATEGORY} in ["Department1", "Department2"]