WCRA: fundamental principles in psychiatric claims

Keegan v Sussan Corporation (Aust.) Pty Ltd [2014] QSC 64

Henry J summarised the fundamental principles to be considered in a claim for psychiatric harm in an employment context and emphasised the importance of the facts and knowledge, which will be determinative of the outcome.

Legal principles

[20] An employer’s duty under the law of negligence to take reasonable care for the safety of employees also arises as an implied term of the employment contract.[8] In the present case Sussan did not attempt to argue there is any material variation in the nature of the duty of care arising under the law of negligence as distinct from the law of contract.

[21] It is well established the employer’s duty of care includes an obligation to take all reasonable steps to provide a safe system of work[9] and to take reasonable care to avoid psychiatric injury.[10]

[22] The critical pre-condition to liability for negligently inflicting psychiatric injury is whether “in all the circumstances, the risk of a plaintiff… sustaining a recognisable psychiatric illness was reasonably foreseeable, in the sense that the risk was not far fetched or fanciful.”[11]

[23] It is not a separate pre-condition to liability that a person of “normal fortitude” might have suffered the psychiatric injury.[12] As the High Court explained in Koehler v Cerebos (Aust) Ltd,[13] the focus is not upon the hypothetical person of normal fortitude but rather upon the particular employee in the case under consideration and “invites attention to the nature and extent of the work being done by the particular employee and signs given by the employee concerned.”[14]

[24] Further, it is not enough to demonstrate only that a psychiatric injury was reasonably foreseeable and that a defendant’s negligence was the cause thereof. The magnitude of the risk and its degree of probability must also be considered.[15] As was explained by Spigelman CJ in Nationwide News Pty Ltd v Naidu:[16]

“[I]t is now well established that workplace stress, and specifically bullying, can lead to recognised psychiatric injury. That does not, however, lead to the conclusion that the risk of such injury always requires a response for the purpose of attributing legal responsibility. Predictability is not enough. …

An employer can be liable for negligence because of a failure to protect an employee against bullying and harassment. However, the existence of such conduct does not determine the issue of breach of duty. …

One of the elements required to be assessed is the degree of probability that the risk of psychiatric injury may occur, even when the reasonable forseeability test of a risk that is not far fetched and fanciful, has been satisfied.”

[25] Consideration of the degree of probability that the risk of psychiatric injury may occur is effectively enshrined in s 305B of the Workers’ Compensation and Rehabilitation Act 2003 (Qld) which provides:

“(1) A person does not breach a duty to take precautions against a risk of injury to a worker unless—

(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought reasonably to have known); and

(b) the risk was not insignificant; and

(c) in the circumstances, a reasonable person in the position of the person would have taken the precautions.

(2) In deciding whether a reasonable person would have taken precautions against a risk of injury, the court is to consider the following (among other relevant things)—

(a) the probability that the injury would occur if care were not taken;

(b) the likely seriousness of the injury;

(c) the burden of taking precautions to avoid the risk of injury.”

[26] The consideration of whether a reasonable person in the position of the defendant would have taken precautions necessarily involves a consideration of what a reasonable person would have done by way of response to the risk.[17] Importantly, that inquiry is prospective.[18] In Nationwide News Pty Ltd v Naidu Spigelman CJ explained the particular significance of the prospective nature of the inquiry in the case of psychiatric injury:[19]

“In any organisation, including in employer/employee relationships, situations creating stress will arise. Indeed, some form of tension may be endemic in any form of hierarchy. The law of tort does not require every employer to have procedures to ensure that such relationships do not lead to psychological distress of its employees. There is no breach of duty unless the situation can be seen to arise which requires intervention on a test of reasonableness.”

[27] The High Court’s emphasis in Koehler v Cerebos (Aust) Ltd upon the need to give attention to the nature and extent of the work being done by the employee and signs given by the employee heralds a logical starting point for the application of the above principles to the present case.

[28] Some fields of employment might of their nature bespeak a heightened risk of psychiatric injury. Here there was nothing extraordinary about the nature and extent of the work Mrs Keegan was employed to perform. Nor was it out of the ordinary that in performing her work Ms Keegan should be subject to supervision and, if necessary, correction by her store manager, Ms Clarke. Indeed, to a greater or lesser degree, virtually any employed person will be subject to some form of supervision and potential correction by or on behalf of their employer.

[29] The High Court explained in Koehler v Cerebos (Aust) Ltd[20] that:

“…[T]he employer engaging an employee to perform stated duties is entitled to assume, in the absence of evident signs warning of the possibility of psychiatric injury, that the employee considers that he or she is able to do the job.”

By parity of reasoning in the present case, Sussan was entitled to assume Ms Keegan considered herself able to cope with supervision and, if necessary, correction by her store manager, that being an inevitable incident of the performance of her duties. Obviously such an assumption would be less readily open where the nature of such supervision or correction was known or should have been known to be excessive or inappropriate or where its effect was known or should have been known to be out of the ordinary.

[30] It is therefore important to analyse what the facts of the present case actually were with an eye to whether there were signs warning of the possibility of psychiatric injury. Was Sussan aware Ms Clarke was so lacking in ability as a supervisor as to signal the possibility she might occasion psychiatric injury upon those she supervised? Was Ms Clarke’s actual supervision and correction of Ms Keegan of such an unreasonable or excessive nature as to signal the possibility it might occasion psychiatric injury to Ms Keegan? Did Ms Keegan exhibit signs suggesting the possibility Ms Clarke’s supervision and correction of her might occasion psychiatric injury? The analysis of the facts should also consider, in the event there were such signs, what Sussan’s response to those signs was with a view to considering whether it was a reasonable response.

Brisbane Barrister – David Cormack

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