The purpose of this article is to analyse the recent trend of decisions made by Queensland courts about psychiatric injuries in the workplace, specifically what might be classified as claims for psychiatric injury arising from the performance of work duties.
The starting point of the analysis is the High Court decision in Koehler v Cerebos (Australia) Ltd [2005] HCA 15) (‘Koehler’).
Key Takeaways
- An employer’s duty is to take reasonable steps to avoid a foreseeable risk of psychiatric injury to a particular employee.
- General knowledge that workplace stress can cause psychiatric illness does not mean every employer must assume that every employee is at risk.
- Complaints about workload may not make psychiatric injury foreseeable if they appear to relate only to employment conditions and do not disclose an impact on the worker’s health.
- An employer may be placed on notice where an employee displays an observable deterioration in their psychological condition, such as regularly appearing distressed, tearful or physically shaken.
- Employers may take ordinary disciplinary or competency-management steps where genuine concerns exist, provided the process is not conducted in an unusual, extreme or harmful manner.
- Failing to respond appropriately to repeated vexatious complaints or a known vulnerability may expose an employer to liability for psychiatric injury.
Koehler
This case involved a full-time sales representative who was required to travel to supermarkets within a specific territory to market certain products. The worker was redundant and re-employed part-time to essentially do the same work. From the first day of her new role the worker made it clear to management that she could not complete the work assigned to her in the reduced time frame, which was understood as an industrial relations complaint.
The worker continued to complain about the unrealistic workload, however none of her complaints indicated that her workload directly impacted on her health. She was eventually diagnosed with a psychiatric illness and sued her employer for damages, claiming a breach of her employment contract and a duty of care to provide a safe system of work (McHugh, Gummow, Hayne and Heydon JJ at [11]).
The High Court held that it was not reasonably foreseeable that the worker would suffer a psychiatric condition in the circumstances and ultimately denied damages. This was on the basis that:
a) The worker had freely entered a contract to undertake the work, albeit to perform more work than was the industry standard, indicating that she had not feared that undertaking the work would impact on her health; and
b) there was no reason for the employer to suspect a risk of psychiatric injury to the worker, as it was reasonable for the employer to assume that her complaint of overwork was an industrial relations issue, rather than a medical issue (McHugh, Gummow, Hayne and Heydon JJ at [27]).
Consideration of Koehler by Queensland Courts
In Eaton, an administrative worker in a nursing home succeeded in establishing that she had suffered psychiatric injuries as a result of her direct manager’s authoritarian approach towards her. Due to the manager’s treatment of her, the worker was often observed to be teary, and shaking with a tremor in her hands.
The worker’s claim had been dismissed at first instance, but the Court of Appeal held that the employer owed a duty to ensure its managers took reasonable care to avoid psychiatric illness, particularly in the circumstance where the worker ‘was exhibiting a particular vulnerability’ (McMurdo JJA at [60]). It was found that the management style of the manger, coupled with the excessive hours required of the worker, caused her psychiatric injury.
Critically, the Court of Appeal found that the worker’s psychological state deteriorated noticeably over the course of time, and that in contrast with Koehler, such a risk was more than far-fetched or fanciful (McMurdo JJA at [34]).
Hayes involved four residential care officers employed in the disability services sector. The workers had been subject to complaints from other workers, and alleged they had suffered psychiatric injuries as a result of the failure of the employer to provide them with adequate support while the complaints were investigated.
The worker’s appeal failed.
The Court of Appeal split on the issue of whether the breach of duty by the employer had caused the workers to suffer psychiatric injuries, with the majority finding that causation had not been established. This was on the basis that the facts as established at trial were quite different from the much more extensive allegations of mistreatment recounted by the workers to the psychiatrist upon whose evidence the workers depended.
The High Court declined to grant special leave to appeal the decision in December 2016: Harris v State of Queensland [2016] HCASL 332.
Unlike the bulk of cases that looked to Koehler, Beven did not involve an interaction between an employee and an employer/manager, rather, it involved a worker’s interaction with a client. In this case, a family support worker suffered a psychiatric illness as a result of being assaulted by a client during the course of her employment.
The Court of Appeal distinguished Koehler on the basis that nowhere in the worker’s employment agreement was there a requirement that the worker was going to be placed in a position with a client which required her to ward off an assault.
This can be contrasted with the facts in Koehler where the worker alleged she suffered a personal injury doing the precise work which she had agreed to perform (Sofronoff P at [132]).
The appeal was ultimately dismissed. In doing so, Sofronoff P surmised that the employer should have dispensed of the client and sent her to another service as a necessary precaution to avoid risk of psychiatric harm to the worker (at [176]).
In this case, a worker alleged she suffered psychiatric injuries due to being ‘bullied, badgered and mobbed’ in the course of her work as an endorsed enrolled nurse at a hospital.
At first instance, the trial judge found that the incidents of alleged bullying were isolated and separated by a considerable period of time, and dismissed the claim. The worker appealed the decision.
In the Court of Appeal, the judges unanimously dismissed the claim on the basis that not only was there no duty, but there was no breach, and the worker’s psychiatric injury had not been caused by any breach of duty by the employer.
McMurdo JJA referred to the joint judgement of the High Court justices in Koehler who said that although the fact that psychiatric illnesses may be triggered by stress is accepted as general knowledge
‘[i]t is, however, a further and much larger step to take to say that all employers must now recognise that all employees are at risk of psychiatric injury from stress at work’ (at [3]).
His Honour pointed out that the employer’s knowledge of an employee’s psychiatric injury is significant. As an example, he noted that Koehler was a case in which ‘the employer had no reason to suspect that the employee was at risk of psychiatric injury’. As an example he contrasted it from Eaton, in which the ‘deterioration of [the employee’s] psychological state was apparent during the period in which she was mistreated by her supervisor’ (at [4]).
Henry J said that a psychiatric injury to the worker was not reasonably foreseeable, from the perspective of the employer, for the following reasons:
a) the worker did not exhibit or articulate signs that she was so materially distressed that a psychiatric injury was reasonably foreseeable in the absence of reasonable care; and
b) the methods by which concerns about the worker’s competency were raised were not so unusual or extreme that they would suggest to the employer that psychiatric injury was reasonably foreseeable (at [118-119]).
Rather, His Honour found that the employer was aware that concerns had been raised about the worker’s competency and ‘ordinary systemic measures’ were taken by the employer to address those concerns (at [119]).
One of the arguments made on appeal in Robertson relied on Robinson v State of Queensland [2017] QSC 165 (‘Robinson’), which found that that a health service had failed to take timely and effective action with respect to repeated, vexatious complaints by the CEO about the District Director of Nursing.
Henry J (in Robertson) contrasted the egregious conduct involved in Robinson to that found by the trial judge in Robertson, saying
‘[m]erely alleging a high number of workplace incidents will not take their apparent cumulative significance anywhere if, as here, the incidents turn out to be unremarkable workplace events from the perspective of an employer otherwise unaware of some special vulnerability of the worker concerned’ (at [147]).
Concluding remarks & key takeaways
It is notable that many of the appellate decisions in Queensland considering Koehler have arisen from the health care industry. It can be seen that psychiatric injuries are particularly acute in professional environments such as health care and law where such disclosures can have significant professional consequences.
The approach of the High Court in Koehler has been subject to academic criticism, especially with respect to the onus it appears to place on workers to disclose that workplace bullying, or unreasonable workload, is causing psychological distress or psychiatric injury.
Whatever is thought of the reasoning in Koehler, the High Court decision still holds considerable sway in the determination of psychiatric claims in Queensland.
That being the case, the following points can be extracted from the recent decisions:
- Workers can fail to establish any duty of care in employers to take reasonable steps to avoid a risk of psychiatric injury if:
a) The worker had freely entered a contract to undertake the work, albeit to perform more work than was the industry standard, indicating that she had not feared that undertaking the work would impact on her health; and
b) there was no reason for the employer to suspect a risk of psychiatric injury to the worker, as it was reasonable for the employer to assume that her complaint of overwork was an industrial relations issue, rather than a medical issue (McHugh, Gummow, Hayne and Heydon JJ at [27]).
2. The duty of the employer is to take reasonable steps to avoid a foreseeable risk of psychiatric injury to a particular employee.
3. Employers are entitled to take disciplinary action, including referring workers to APHRA in the case of health professionals, if there are genuine concerns about the competency of the worker (Robertson).
4. Employers can breach their duty of care if they fail to take timely and effective action with respect to vexatious complaints made about an employee (Robinson).
5. The fact that a worker complains of a multiplicity of incidents does not necessarily mean that there is a ‘cumulative significance’, placing the employer on notice of an issue, if the incidents themselves do not disclose any actual bullying took place (Koehler).
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Frequently Asked Questions
What did the High Court decide in Koehler v Cerebos?
The High Court found that the employee’s psychiatric injury was not reasonably foreseeable. Her workload complaints appeared to be industrial relations complaints, and the employer had no reason to suspect that undertaking the work was affecting her mental health.
When can an employer be liable for a workplace psychiatric injury?
Liability may arise where psychiatric injury to the particular employee was reasonably foreseeable and the employer failed to take reasonable steps to prevent the risk.
Does an employee need to tell their employer that work is affecting their mental health?
An express disclosure can help place the employer on notice, but observable signs of psychological deterioration may also make the risk foreseeable. The surrounding circumstances and the employer’s knowledge are important.
Can a demanding or authoritarian management style cause a compensable psychiatric injury?
It can where the management approach, working hours and visible deterioration in the employee’s condition make the risk of psychiatric injury reasonably foreseeable and reasonable preventative action is not taken.
Can employers investigate concerns about an employee’s performance?
Yes. Employers may investigate genuine competency concerns and take appropriate disciplinary or reporting action. Ordinary workplace processes do not necessarily make psychiatric injury reasonably foreseeable.
Do numerous workplace complaints automatically establish bullying or employer liability?
No. A large number of incidents does not necessarily create cumulative significance if the incidents are ordinary workplace events and do not demonstrate bullying or a known psychological vulnerability.
