In Eaton v TriCare (Country) Pty Ltd [2016] QCA 139, the Queensland Court of Appeal awarded $435,583.98 in damages to an employer who had negligently caused one of its former employees to sustain a psychiatric injury.
The decision, which is relevant in all Australian States and Territories, is an important reminder to employers of the need to take action to prevent reasonably foreseeable risks of psychiatric injury from arising.
The facts
Ms Eaton was employed by TriCare (Country) Pty Ltd (TriCare) as an administrative assistant at a nursing home near Hervey Bay in Queensland. She had a particularly fractious relationship with a manager, who was consistently belittling towards her. She claimed that she was suffering depression and anxiety as a result of TriCare’s failure to take reasonable care to prevent her psychiatric injuries. She lost at trial in the District Court, but won in the Court of Appeal.
Does an employer owe an employee a duty to take care to avoid causing a psychiatric illness to an employee?
Drawing on the High Court’s decision in Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44, Philip McMurdo JA explained that, if it is reasonably foreseeable that a particular employee might sustain a psychiatric illness or injury as a result of his or her employment, the employer will be required to take reasonable care to avoid causing a psychiatric injury or illness to that particular employee.
There are a number of factors which could be relevant to determining whether such an injury is reasonably foreseeable. They include:
- The nature and size of the employee’s workload.
- Any complaints made by the employee in relation to workplace stress or other mental health issues.
- Any leave taken by the employee because of workplace stress or other mental health issues.
- Any evidence of a deterioration in the employee’s psychological state during the course of his or her employment.
Philip McMurdo JA found that the risk of Ms Eaton incurring such a psychiatric injury was reasonably foreseeable. This is due to the fact that the evidence suggested that her employer knew that she had exhibited obvious signs of severe anguish and stress at the workplace that were indicative of a risk of psychiatric illness.
What does an employer have to do to discharge that duty of care?
An employer will discharge any such duty of care by taking reasonable care to avoid causing such psychiatric illnesses and injuries to the employee. What is reasonable will very much depend on the circumstances. More elaborate measures will need to be taken if the risk of injury is particularly severe.
While the scope and content of an employer’s duty of care will vary from case to case, it is important for all employers to remember that, as Beazley JA explained in the context of a similar claim in Nationwide News Pty Ltd v Naidu [2007] NSWCA 377, ‘[w]hat is absolutely clear is that the appropriate response was not to do nothing’.
TriCare was held to have breached its duty of care because it had significantly increased Ms Eaton’s workload and one of its managers had behaved in a consistently aggressive and belittling manner towards Ms Eaton. Philip McMurdo JA noted that the increase in the workload was unlikely to be enough to constitute a breach on its own, but that it was a breach when considered in conjunction with the unreasonably aggressive managerial style that was adopted at the same time.
Lessons for employers
Negligence claims can create unnecessary alarm for employers. Employers are not required to set up extensive processes to detect all possible risks of injury, or to spend thousands on changing operational practices to mitigate those risks as much as possible. As Philip McMurdo JA put it, employers are not required to create ‘a happy workplace’. What they are required to do is to acknowledge any such risks when they become foreseeable, and to take some steps to prevent those risks from materialising.
This was a clear case in which TriCare, after seeing that the manager had caused Ms Eaton to exhibit obvious signs of significant stress, should have taken some steps to alter its managerial practice, made sure that it had appropriate bullying policies in place, and provide her some support to get her back on her feet. This would have gone some way to discharging their duty of care while improving the productivity of the organisation in the process.
How can JFM Law help?
JFM Law can help all employers to respond to risks of psychiatric injury in a genuine and commercially realistic way. Contact JFM Law on 1300 882 386 for a no obligation chat. If you would rather get in contact through email, send your question through or by email at wehelp@jfmlaw.com.au
The information contained in this post is current at the date of editing – 3 October 2024.
