Psychiatric Injury Compensation

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Eaton v Tricare (Country) Pty Ltd [2016] QCA 139

The appellant in this matter was awarded damages in the amount of $435,583.98 for her employer’s failure to intervene where there was ongoing bullying and excessive workload – it was held that this amounted to a breach of the employers duty of care owed to the appellant. 

Background

The Appellant, Ms Eaton, worked in an administrative role at the Respondent’s nursing home for 3 years. At the time of her resignation, she had developed a psychiatric illness, suffering from depression and anxiety. On the basis of evidence provided by two psychiatrists, it was accepted in the proceedings that the illness had arisen as a direct result of her employment, in particular, Ms Eaton’s “consistently excessive” workload and the bullying conduct of a fellow employee, Ms Harrison.

Ms Eaton described Ms Harrison’s behaviour towards her as being “offensive, intimidating, humiliating and threatening”; the conduct was repeated and deliberate and was known, or ought to be known to Ms Harrison, to be likely to increase the stress which the plaintiff was feeling. Ms Harrison’s bullying comments to Ms Eaton included things such as “I’ve never met anybody so stupid as you”. Ms Harrison was Ms Eaton’s supervisor, and repeatedly acted towards her in a bullying manner and failed to address Ms Eaton’s excessive workload.

The Argument

Ms Eaton based her application on two main arguments – negligence and breach of the employment contract. Ms Eaton argued that the Respondent was vicariously liable for the bullying conduct of Ms Harrison. Ms Eaton also argued that the Respondent had failed to put in place measures of internal control which would have prevented Ms Harrison from behaving, or continuing to behave, towards Ms Eaton as she did and which would have addressed her workload.

The Original Decision

In the first instance, while the trial judge found that Ms Eaton’s injuries were a result of her employment, he dismissed Ms Eaton’s application on the basis that the Respondent had no relevant duty of care in the circumstances. The trial judge referred to Tame v New South Wales (2002) 211 CLR 317; [2002] HCA 35 and Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44; [2005] HCA 15 and said there was a threshold issue of whether the relevant duty was engaged by the reasonable foreseeability of psychiatric injury to the plaintiff. In His decision, His Honour was not satisfied that Ms Eaton had proved that the risk of her sustaining a recognisable psychiatric illness was reasonably foreseeable. His Honour stated, “the relevant question is whether the incident, alone or considered as part of a course of conduct, breached the employers duty to the plaintiff and caused the plaintiff’s serious mental illness. I find it very difficult to conclude so.” 

He did however hold that had Ms Eaton succeeded, the appropriate award for damages would have been $435,583.

On Appeal

In the appeal proceedings, Ms Eaton argued that the trial judge had erred in His decision on account of misunderstanding the content of her case. His Honour misunderstood the case to be that Ms Harrison engaged in “intentional wrongdoing”, providing that the proper basis for Ms Eaton’s complaint should be that of the intentional tort committed by Ms Harrison and that there had been no duty owed by the respondent.

In the appeal decision, Philip McMurdo JA  explored the relevant duty of care. The respondent, as an employer, owed a non-delegable duty of care to its employees to take reasonable care to avoid exposing them to unnecessary risks of injury. Given that there was no real dispute as to the facts, the relevant question was whether the respondent came under a duty to take reasonable care to avoid a psychiatric illness to Ms Eaton from her employment. There were several witnesses who could attest to the fact that they had noticed Ms Eaton to be physically shaking on several occasions, as being teary, and to have gone through an obvious emotional deterioration since Ms Harrison started working, additionally, Ms Harrison’s actions amounting to a failure to take reasonable care in her dealings with Ms Eaton. On this basis, McMurdo JA held that the resultant psychiatric illness was reasonably foreseeable, and disagreed with the trial judges conclusion on negligence.

Take Away

Employers can be held vicariously liable for the behaviour of their employees. Employers have a duty of care to take reasonable steps to ensure the safety of employees from workplace bullying and harassment, and from other unreasonable employment conditions, such as a sustained excessive workload, where it might pose a risk to employee health and safety.