An Employers duty to avoid psychiatric injury to an Employee

In Woolworths Ltd v Perrins,(2015) QCA 207, the Queensland Court of Appeal examined the scope and extent of an employer’s duty of care to avoid psychiatric injury to an employee.

The facts were that the employee had a troubled past of drug use, sexual abuse and imprisonment before commencing employment. He did not disclose such matters in his pre-employment assessment forms.

He applied to join a management training programme which did involve formal psychological testing and passed being offered a place in the programme. After that offer was received, he claimed to have made full disclosure of his history to a senior manager, and asserted his problems were in the past. Before actual commencement of his training programme, he was informed that he was removed from it because of absenteeism, for time well in excess of the stated and clear policy, and much of which was referrable to time in prison. A formal discussion occurred and the employee was apparently fully informed and accepting of the reasons for the decision. 12 months later, he was again offered an opportunity to participate in the same programme. Again he was removed from the programme on the day of its commencement.

Mr Perrins immediately felt unwell, went home, slept for days and eventually sought medical treatment. He was subsequently diagnosed as having a psychiatric illness. The expert evidence accepted by the primary judge was that the diagnosis was “adjustment disorder with depressed mood”, “dissociative disorder”, and “substance abuse disorder” all attributed to the events at his place of employment.

The employee commenced action against his employer pleading that his psychiatric injury was caused by the employers breach of the duty of care and cited 3 examples of unreasonable management action which exposed him to and led to and led to his injury.

The unreasonable management action pleaded centred around how the employer dealt with the employees acceptance into the programme, how they dealt with communication of the decision to withdraw him from it and with the knowledge of his issues, and knowing of his vulnerability to psychological injury.

In dismissing the claim, the Court said that the duty of care needed to be examined in the context of the contractual obligations, and that an employee could not maintain an action for breach of a duty of care where they were simply required to do that which they were contractually bound to do. The employers policies and procedures were known by the employee including the obligations to make full and proper disclosure. Further, the employer had a legitimate interest where it was investing time and money into management training programmes to ensure that applicants met its criteria. The Court also rejected the proposition that it was reasonably foreseeable that the employee would have suffered the injury pleaded.

The Court said: “…..disappointed ambition is a commonplace in the employment situation, sometimes resulting from events far more unfair than a colleague belatedly but accurately carrying out her duty, and sometimes disappointments occur on many more occasions than the two here, but psychiatric decompensation as a result is not commonplace. In my judgment very few people would react and suffer psychiatrically as did Mr Perrins if placed in his situation.”

In summary, the Court found that: “there was no foreseeable risk of injury against which Woolworths were required to guard. Assuming a foreseeable risk of injury, the pleaded causes of the psychiatric fail for lack of proof of causative effect or because the allegations depend on facts not found or that are unsupportable, a duty of care that is wider than the law imposes, actions or omissions that were not in breach of any possible duty, or some combination of each.”

The decision is a robust one for employers, clarifying the scope and extent of the duty owed by employers, and what is a reasonably foreseeable risk of injury. It also gives recognition to employer’s legitimate interests in selection of employees for management training, and highlights the benefit of sound documented policies, communication of those policies and the application of that process in the workplace.

However, as this case demonstrates, each case will depend on its own specific facts and circumstances and specific advice and guidance is recommended in dealing with these claims.

For further advice on any matters concerning employment matters, call Michael Sing to discuss and he’ll provide you fast and practical advice.

Michael Sing

Special Counsel

Brisbane 07 3009 8444
Email m.sing@rclaw.com.au

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Gavin McInnes

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