Employer found liable for employee’s conduct post-termination

06 April 2022

The NSW Personal Injury Commission accepted a worker’s psychological injury claim arising from a manager’s harassment and intimidation, continuing after termination, was found to arise in the course of the worker’s employment, as the manager’s conduct was a continuation of behaviour occurring during employment, and could not be categorised as a private dispute.

The background

The worker, was employed by the appellant as an ‘Open Spaces Officer,’ where he maintained local parks and streets. The worker claimed compensation for a psychological injury arising out of harassment and intimidation by his manager which continued after his employment was terminated.

State Cover, the insurer for the appellant, disputed liability for the worker’s claim on the basis that the incidents involving the manager followed the worker’s termination, and therefore did not arise out of, or in the course of the worker’s employment, pursuant to section 4(b)(ii) of the Workers Compensation Act 1987 (‘the Act’).

The decision at first instance

The worker commenced proceedings in the former Workers Compensation Commission. The Member found in favour of the worker, awarding on-going weekly compensation, medical expenses and referred the claim for whole person impairment to a Medical Assessor.

The issues on appeal

The appellant appealed the decision of the Member at first instance. Whilst it is uncontentious that the worker suffered from a psychological injury, the dispute related to how that condition came about, and whether it was in the course of the worker’s employment, pursuant to section 4(b)(ii) of the Act.

The appellant relied on the following grounds of appeal (1) the Member erred in law by applying the incorrect test under section 4(b) of the Act to determine whether the injury occurred ‘in the course of his employment’ (2) the Member erred in fact and law in proceeding on the basis that the relevant test under section 4(b) was whether there had been aggravation of the disease (3) the Member erred in fact and law in holding that the worker’s condition was predominately caused by his difficulties with management and (4) the Member erred in fact and discretion in holding that the failure of the worker to obtain promotion was not the predominant cause of his psychological condition.

The decision on appeal

The appellant argued that an ‘aggravation of disease’ required the aggravation to have occurred in the course of employment under section 4(b)(ii), and therefore, this could not be satisfied as the manager’s conduct occurred outside the course of his employment, post-termination. The Member held this approach was misconstrued. The relevant test is whether there is such a connection between the conduct complained of and the worker’s employment, that it may nonetheless be said that the workers aggravation of disease occurred in the course of his employment.

The Commission found that the worker, through no fault of his own, was subjected to completely unacceptable behaviour at the workplace. On the evidence, the Commission determined that this behaviour, amongst other stressors, caused psychological injury to the worker, and that this conclusion was open to the Member on the evidence at first instance, and involved no error.

Implications for you

An employer may still be found liable for an employee’s conduct post termination. Psychological injury claims arising from harassment post-termination may still be found to be ‘in the course of employment,’ if the worker can provide evidence that the behaviour is a continuation of events that occurred during the employment.

The manager’s employment was subsequently terminated, however, the harassment continued. Notably, the worker was successful in applying for a 12 month Apprehended Personal Violence Order against his manager, after he received life-threatening text messages.

Waverley Council v Sfuncia [2021] NSWPIC PD 43

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