Palmer & Ors v State of Queensland [2015] QDC 63

The four plaintiffs were engaged in employment at the Maryborough Office of the Office of Disability Services Queensland in 2008, in both administrative and managerial positions. A dispute arose in late 2008 and early 2009 between a number of employees with words, rumours and malicious complaints being exchanged, primarily facilitated Ms Johnson, and some of the plaintiff’s being delegated menial and unfulfilling work as a result. An independent investigation ultimately concluded that the complaints had no bearing. The plaintiffs alleged they suffered psychiatric injury and subsequently claimed damages as a result of the managerial treatment, including the investigation of complaints. Both liability and quantum were an issue.

Claims for pure psychiatric injury can be difficult to run, especially in the workplace as the establishment of reasonable foreseeability and the scope of an employer’s duty of care to prevent a purely psychiatric injury seems to be a recurring issue. A significant portion of pure psychiatric claims involve plaintiffs employed in a field where their life may be threatened or they may be exposed to traumatic experiences, for instance police officers[1], corrective services personnel[2] and paramedics[3].  Whilst in many cases the question of reasonable foreseeability is not usually determinative of the claim because of the nature of the conduct alleged and the injury sustained, in instances of managerial action and investigations it is. The decision in Palmer makes clear that in instances where the conduct in question may fall short of it being reasonably foreseeable that recognisable psychiatric injury would be sustained (as opposed to stress) or the alike it is important to go back to first principles.

McGill DCJ delivered the judgement and did not find a duty of care was owed, based on no vicarious liability and that because the injury was not reasonably foreseeable, there was no duty on the employer to take preventative measures.

In His Honour set out it as follows:

[68] The plaintiffs were employed by the defendant and therefore the defendant as employer owed them a duty to take all reasonable steps to provide a safe system of work. That extended in principle to a duty of care in relation to psychiatric injury as well as in relation to physical injury, but in the former case it is necessary to take care to identify correctly the content of the employer’s duty.[83] The central issue in relation to duty is whether the risk of a particular employee’s sustaining a recognisable psychiatric illness was reasonably foreseeable, in the sense that the risk was not farfetched or fanciful.[84]

His Honour then turned to and applied Hegarty v Queensland Ambulance Service [2007] QCA 366:

“[72] Even in an occupation likely to expose employees to particularly stressful situations, there are limits to the extent to which an employer is expected to be alert to the risk of psychiatric injury developing in an employee, particularly in circumstances where there has been no particular indication of the existence of a specific risk in relation to that employee. This is illustrated by the decision of the Court of Appeal in Hegarty v Queensland Ambulance Service [2007] QCA 366. In that case the Court of Appeal overturned a judgment in favour of a paramedic who was found to have experienced a cumulative stress reaction as a result of exposure to multiple traumatic events during 15 years of service.

[73] Keane JA, as his Honour then was, with whose reasons the other members of the Court agreed generally, said at [41]:

“I pause here to observe that this elegant formulation of the plaintiff’s case glosses over a number of issues. It must be said immediately that, while an employer owes the same duty to exercise reasonable care for the mental health of an employee as it owes for the employee’s physical well-being, special difficulties may attend the proof of cases of negligent infliction of psychiatric injury. In such cases, the risk of injury may be less apparent than in cases of physical injury. Whether a risk is perceptible at all may in the end depend on the vagaries and ambiguities of human expression and comprehension. Whether a response to a perceived risk is reasonably necessary to ameliorate that risk is also likely to be attended with a greater degree of uncertainty; the taking of steps likely to reduce the risk of injury to mental health may be more debatable in terms of their likely efficacy than the mechanical alteration of the physical environment in which an employee works.”

[74] Given the nature of the work to which a paramedic is exposed his Honour found that there was a foreseeable risk that that work would cause psychological stress and possibly psychiatric injury, but acknowledged that the defendant had taken at least some steps in the early 1990s to deal with that risk. The plaintiff succeeded at trial on the basis that his supervisors ought to have detected that he was in need of professional help to cope with stress and ought to have suggested that to him, but that approach was rejected on appeal by his Honour who seems to have regarded it as putting the standard of care required by an employer at too high a level. His Honour said at [47]:

“In the joint judgment of McHugh, Gummow, Hayne and Heydon JJ in the recent decision of the High Court in Koehler v Cerebos (Australia) Ltd, it was said that a stable appreciation of the content of the employer’s duty to take reasonable care is essential; and that it is erroneous to proceed on the assumption that ‘the relevant duty of care [is] sufficiently stated as a duty to take all reasonable steps to provide a safe system of work without examining what limits there might be on the kind of steps required of an employer.’ Further, ‘litigious hindsight’ must not prevent or obscure recognition that there are good reasons, apart from expense to the employer, why the law’s insistence that an employer must take reasonable care for the safety of employees at work does not extend to absolute and unremitting solicitude for an employee’s mental health even in the most stressful of occupations. A statement of what reasonable care involves in a particular situation which does not recognise these considerations is a travesty of that standard.”

[75] After some further analysis of the evidence and discussion of the submissions on appeal his Honour said at [89]:

“In my respectful opinion, there is much force in the defendant’s principal submission. Bearing in mind the plaintiff’s proficiency in his duties, his ambition, his apparent physical problems and his reasonable requests for a transfer from Gayndah, it is difficult to see how a layman in the position of any of the plaintiff’s supervisors, even one trained in the manner suggested by Professor Bryant, could have been alerted to discern in the plaintiff’s cluster of complaints a ‘signal’ that the plaintiff was not coping with the stresses of his job. It is even more difficult to see the basis on which the defendant’s officers could have been instructed to conclude that the only reasonable response to what the plaintiff actually said to his supervisors would have been advice to seek psychological assessment and assistance.”

McGill DCJ then considered the New South Wales Court of Appeal decision of Nationwide News Ptd Ltd v Naidu[4], which involved a security guard who had been the subject of bullying and harassing behaviour by his supervisor. The pivotal element was that the security guard had not previously complained about the supervisor’s conduct until the alleged psychiatric injury occurred. Spigelman CJ found that although the supervisor’s employer[5] was liable for the supervisor’s action, either directly or vicariously, there was no negligence or breach of contract on the part of the employer company.

“[79] As to the question, which is more relevant here, of the liability of the plaintiff’s employer, Spiegelman CJ said at [20], [21]:

“The prospective nature of the inquiry as to breach has particular significance in the case of the risk of psychiatric injury. 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 a situation can be seen to arise which requires intervention on a test of reasonableness.

Koehler affirms the line of High Court authority … which focuses attention on the purpose for which the inquiry as to foreseeability is undertaken, namely, to determine what reasonableness requires by way of response and, therefore, whether legal responsibility for the conduct should be attributed to the defendant for the injury to the plaintiff.”

[80] In that matter there was a good deal of evidence as to what was known by various other employees of the plaintiff’s employer as to the way the plaintiff had been treated, but it was held that the knowledge of most of these people could not be attributed to the employer, because of the positions they held. In the case of those employees whose knowledge could be properly attributed to the employer, it was held that what they had seen was not enough to suggest foreseeability of a recognised psychiatric illness, rather than simply suggesting an adverse effect on the plaintiff’s mind. The Chief Justice said at [58], [59]:

“The signs suggestive of psychiatric illness, rather than psychological disturbance, satisfy the not far fetched and fanciful test of foreseeability. However, they do not, in my opinion, reach the level of possibility which would require the employer … to intervene.

Workers are subject to stress in both their working and personal lives which can affect their mental health. Changes in personal behaviour over a period of years may occur for many reasons. So may the response of crying. These responses did not, in my opinion, indicate psychiatric illness to the degree that required a response from the actual or surrogate employer.”

[81] It seems to me that his Honour was there distinguishing between the test for whether there is a duty of care and the content of the duty of care; given that an employer’s responsibility is only to take reasonable care, not absolute care, the mere fact that psychiatric injury is reasonably foreseeable in accordance with the conventional test does not mean that there is necessarily an obligation on the part of an employer to take steps in response, and it is necessary in assessing whether the employer has fallen below the standard of reasonable care to have regard not merely to the foreseeable possibility of psychiatric injury but to the level of risk of such injury.”

In contrast to these decisions, courts are and will be more likely to find in favour of the plaintiff in circumstances of bullying when the plaintiff has made timely complaints and the employer has failed to follow its own or accepted practices, because in such instances, it is more likely to be reasonably foreseeable the conduct, the subject of the complaints and the unreasonable response of the employer, will cause a recognisable psychiatric injury (as opposed to stress or some other lesser complaint).

MCGill DCJ referred to two prior decisions where pure psychiatric claims had been made out.

The decision of Keegan v Sussan Corporation (Aust) Pty Ltd [6] was one such example where this was successful. It involved a retail worker who had been the subject of workplace bullying by a new manager. After a period of four days, the plaintiff contacted a more senior company officer and complained about the conduct of the manager in question, to which she was advised to attempt to work it out directly with her. The plaintiff attempted to do this, but it failed and she was subsequently too psychologically distressed to work after 11 days. At trial, the court found in favour of the plaintiff as she had taken reasonable steps to remedy the situation before the psychiatric injury, which was found to be reasonably foreseeable. In contrast, whilst the defendant had in place a process for dealing with workplace bullying, it was not followed and there was evidence the manager had received a warning for prior offending conduct.

The other decision was Wolters v University of the Sunshine Coast [2013] QCA 228. His Honour made the point that the trial judge in Wolters had found it was reasonably foreseeable the conduct of the supervisor could cause psychiatric injury because there was prior conduct of the supervisor that the employer was aware of. However, the appeal was not on this aspect, but causation as to whether the response of the employer was reasonable.

McGill DCJ although sympathetic, dismissed the claims because the defendant was not vicariously liable for the behaviour of Ms Johnson or those she recruited to her cause:

“[100] The test for vicarious liability in the context of some deliberate wrongful act undertaken by an employee was discussed by the High Court in New South Wales v Lepore (2003) 212 CLR 511. In that case a number of judgments were delivered and there was no judgment which stands as a statement supported by a majority of the members of the Court. I am however relieved of the burden of having to analyse the effect of the various statements by the fact that this was undertaken in Ryan v Ann Street Holdings Pty Ltd [2006] QCA 217; [2006] 2 Qd R 486 by Williams JA with whom Fryberg J agreed. His Honour said at [18]:

“What emerges from the various judgments in Lepore is that the critical test, in broad terms, involves a comparison between the intentional wrongful conduct and the type of conduct the employee was engaged to perform. If there is a ‘sufficient connection’, or a ‘sufficiently close connection’, or a ‘close connection’, it will be open to the tribunal of fact to conclude that the wrongful act was done in the course of employment, albeit in an improper mode. The connection is of critical importance, and as Gummow and Hayne JJ noted at para [217] where the opportunity for abuse becomes greater, so the risk of harm increases. Essentially that means that where an employer clothes an employee with authority which, if abused, could lead to great harm, then (the risk being known to the employer) the easier it will be for a court to draw the conclusion that the wrongful act was done in the course of employment.”

[101] The acts of Ms Johnson referred to in paragraph 5 are making the complaint against Ms Hayes, lodging the fair treatment appeal, and being rude to and speaking over Ms Palmer in her interactions with her. I can say at once that in my opinion the first and second of these were clearly not acts done in the course of her employment. Her job was to act in effect as supervisor of the RCOs who were working at particular houses caring for residents; it was no part of her job to be complaining about Ms Hayes or anyone else, nor was there any connection between her job and the making of that complaint, other than the fact that it provided a setting for the interactions between Ms Johnson and Ms Hayes which prompted Ms Johnson to make the complaint. The fact that the defendant has a mechanism in place for dealing with complaints by employees against superiors does not mean that the defendant is clothing the employee with authority to make such complaints, or that a complaint is or could be seen to be part of what the employee was employed to do. In my opinion it is clear that the defendant is not liable for these acts of Ms Johnson. The same applies to the acts of RCOs in making complaints.

[102] As to whether rude or overbearing behaviour towards Ms Palmer in their interactions were acts done in the course of Ms Johnson’s employment, again in my opinion there is not a sufficient connection with Ms Johnson’s job to make this behaviour something done in the course of her employment. Ordinarily misbehaviour between one employee and another at a personal level will not be something done in the course of employment. In circumstances where the employee perpetrating this behaviour is in a position of some authority over the victim such that it is part of the perpetrator’s job to correct and perhaps to reprimand the victim, rude or offensive behaviour can be characterised as an improper way of performing the function of supervisor, rather than simply independent rudeness within the workplace, so that the employer will be vicariously liable for it. However Ms Johnson was not in any sense the supervisor of Ms Palmer, so that being rude to Ms Palmer and speaking over her could not be characterised as an improper means of performing a function which it was part of her job to perform. Accordingly I do not consider that these matters were things done by Ms Johnson in the course of her employment either. Paragraph 6, so far as it relates to the acts or omissions of Ms Johnson and the RCOs, was not made out.

In terms of reasonable foreseeability and duty, His Honour made the point, which was reiterated elsewhere in the judgment:

“[122] In the circumstances that does not strike me as an inherently unreasonable way for the investigators to proceed. The plaintiff does not allege that this was negligence in itself, but rather that this provided a context within which there was a negligent failure to provide support. I accept that in fact Ms Palmer was not made aware of the details of the complaints against her prior to the first interview, but this was due to the approach adopted by the investigators and not to any refusal on the part of Ms Steele-Wareham to provide that information.

[123] As to the question of whether support or adequate support was provided, it does seem to be true that there was initially little in the way of support provided except for the reference to the employee assistance scheme, under which employees could access counselling at the expense of the Department. Later some support was provided by Ms Stokes.[116] The issue is whether there was an obligation to do more imposed by a duty of care to avoid psychiatric injury.[117] Counsel for the plaintiffs did not submit that there was negligence simply because complaints had been made and they were being investigated, or because the plaintiff had been removed from her position; rather it was said that the negligence related to a lack of support in the context where this had occurred. But it does not appear to me that this is a meaningful distinction.

[124] The need for support, if it existed, arose because the complaints were made against the plaintiff, and they were being investigated, which would be productive of anxiety for her, and because her being removed from her position would also be productive of anxiety for her. It follows from the decisions in New South Wales to which I have referred[118] that there can be no duty of care arising in such circumstances directly from the fact of the allegations, the investigation, or the removal from the position. It would in my opinion be inconsistent with that approach to say that, although there was no duty not to cause psychiatric injury by doing those things, there was a duty to provide support in response to those things so as to avoid psychiatric injury. In my opinion, there was no duty to provide special or additional support arising from the fact of the investigation of the complaints, and the removal of the plaintiff from her position.”

[156] Although the test for reasonable forseeability is not a high one, it is apparent from the authorities that it does not follow simply from the fact that a person is exposed to something likely to be found unpleasant, distressing or stressful. On the whole, I am not persuaded that there is a duty not to cause psychiatric injury in this way, and therefore necessarily there was no duty to provide support to avoid or reduce the risk of psychiatric injury in such circumstances. In any case, even if the risk of psychiatric injury was reasonable foreseeable, I do not consider that the risk was so great as to justify any particular precaution in response.”

Conclusion

“[216] There is no doubt that each of the plaintiffs in these matters has suffered a severe psychiatric injury as a result of the events that occurred in 2009 and 2010 in connection with their employment at the MSC. On the evidence that I have heard, they were subjected to considerable stress and anxiety in connection with that employment. Fundamentally, that arose out of the actions of one particular employee of the department, Ms Johnson. It is apparent from Exhibit 40 that Mr Costello, the manager between July 2008 and February 2009, had difficulty in managing Ms Johnson effectively; essentially she was resistant to his attempts to modify the difficult aspects of her behaviour towards other staff members. Perhaps in an ideal world she would have been identified as an undesirable employee and dismissed, but we do not live in an ideal world. The major stressor confronting the plaintiffs was simply the hostility generated by Ms Johnson, personally and through the others whose discontent she mobilised. In my opinion however the defendant is not vicariously liable for her actions in this respect, or the actions of those she recruited to her cause.

[217] Confronted with what became a difficult industrial situation, the Department adopted a policy essentially of seeking to appease the RCOs, which would inevitably be seen by those against whom they were complaining as taking sides against them. The Department had reasons for approaching the matter in that way, and, whether or not other courses were realistically open to the Department, clearly the decision to approach the matter in that way cannot be characterised as negligent. The same applies to the decisions to move Ms Palmer and Ms Hayes out of their positions, and to move Ms Greenhalgh on to a new position to which she would have been moving shortly in any event. This could and should have been handled with greater sensitivity by the Department, in particular by Ms Steele-Wareham, though I suspect that it would have been a significant psychological blow to those plaintiffs in any event, because however it was handled it would have been characterised by them as letting Ms Johnson and her allies win. It may be significant that Ms Harris, who was left in her position, still developed much the same psychiatric reaction, a factor which supports the view that it was the campaign of making complaints against the plaintiffs, and others, which was the crucial stressor which led to their psychiatric injury. This of course is not a matter for which the defendant is responsible.

[218] Ms Steele-Wareham did seem to manifest a lack of sympathy for the plaintiffs, and perhaps also for the others against whom complaints were made, and it is easy to see that there were things that she could and should have done better. It may be that she was genuinely sympathetic with the position of the RCOs, or she may have felt that it was important for the process of rebuilding an employment relationship with them for her to be seen as someone who was sympathetic to their position, and therefore she had to be careful to avoid manifesting any sympathy for those whom they regarded as the enemy; the effect on the plaintiffs would have been much the same in either case. It does not however follow that there was a negligent failure to take reasonable care to avoid psychiatric injury in any of her actions.

[219] Although I have a good deal of sympathy for the plaintiffs, and regret the terrible psychiatric problems that have engulfed them, I am not persuaded that on the evidence led before me any of the plaintiffs has proved that there was negligence on the part of the defendant in any of the respects alleged. It follows that in each matter the plaintiff’s claim must be dismissed. I shall however on a precautionary basis assess damages.”

[1] New South Wales v Burton [2006] NSWCA 12.

[2] Queensland Corrective Services Commission v Gallagher [1998] QCA 426.

[3] Hegarty v Queensland Ambulance Service [2007] QCA 366.

[4] (2007) 71 NSWLR 471.

[5] In this case, the security guard’s supervisor was employed by a separate company

[6] [2014] QSC 64.

Contributed by:

Thomas Clayworth, Honours Law Student at the Queensland University of Technology

Linkedin profile:  https://www.linkedin.com/pub/thomas-clayworth/74/7b5/9b3

NB: while the appeal was unsuccessful because of causation, the majority did find a duty was owed:

Hayes & Ors v State of Queensland [2016] QCA 191 (15/4063) Margaret McMurdo P and Mullins and Dalton JJ 29 July 2016

Applied by McGill J in his Honour’s subsequent decision of Lee & Anor v State of Queensland [2015] QDC 083

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