When does workplace stress amount to a psychiatric injury?

15 December 2022

The Queensland Supreme Court recently considered the foreseeability of risk of a psychiatric injury being sustained in the workplace in circumstances where disciplinary action was taken against an employee.

In issue

  • A worker sought damages for psychiatric injury in the Queensland Supreme Court against his employer, Gympie Regional Council, as a result of the employer’s handling of an investigation into his work performance.

The background

The plaintiff was a manager at Gympie Regional Council (the Council) in the Local Laws Team. After an internal survey of staff revealed numerous complaints, higher management raised issues with the plaintiff regarding his performance and management style. The allegations amounted to potential serious misconduct. Meetings took place between the plaintiff and higher management regarding the issues between March 2014 and July 2014. In July 2014, the plaintiff was stood down from his duties whilst the allegations against him were being externally investigated. The plaintiff was told that the outcome of the investigations, depending on the findings, could result in disciplinary action including termination of employment. At the meeting in which he was stood down, the plaintiff displayed obvious signs of distress. Following the meeting, the plaintiff received further correspondence from the Council regarding the allegations and investigation process, and some further meetings also occurred.

The Council had told the plaintiff that his suspension would be lifted when the investigation report was delivered by 9 August 2014. The report was not delivered by this date, and the plaintiff shortly after lodged a medical certificate with the Council in relation to psychiatric injuries. The investigation report was ultimately delivered to the Council later in August 2014, and it found some allegations against the plaintiff were substantiated, while others were not. The results were not communicated to the plaintiff until January 2015. In October 2014, the plaintiff lodged a statutory workers’ compensation claim for work-related psychiatric injuries due to ‘bad management decisions’.

The plaintiff claimed that the Council was negligent in its dealing with his work performance issues by failing to strictly adhere to its own internal policies governing employee conduct and disciplinary action, and this resulted in him developing a psychiatric injury.

The critical issue for the court was whether it was reasonable to require an employer to contemplate the risk of psychiatric injury to a worker, and to take reasonable care to guard against such an injury. The court was also required to consider whether the Council owed the plaintiff a duty of care to provide a safe system of work when exercising a contractual right to stand him down from his employment.

The decision at trial

The court found that an employer’s policies and procedures are relevant to the content of the duty of care to workers and ‘may be indicative of reasonable steps that may be taken to a foreseeable risk, and the failure to comply with them may be evidence of a breach of a duty of care’. However, in the circumstances before the court, it was determined that:

1. While the plaintiff was informed of potential disciplinary action being taken against him during the meetings in 2014, and that these meetings were confrontational and likely to be uncomfortable to the plaintiff, this did not mean that the Council ought to have known that he was psychologically vulnerable, nor that there was a foreseeable risk of him sustaining a psychiatric injury. Accordingly, the Council was not required to take reasonable steps to avoid the risk of the plaintiff sustaining a psychological injury. Brown J stated in this regard:

'The Council would have been aware of the pressures upon Mr Potter caused by both the events of 30 June 2014 and 21 July 2014, which he had not apparently experienced before. However, the pressures were not of the level that they alone would make a psychiatric injury reasonably foreseeable assuming Mr Potter was a person of normal fortitude. An employer is entitled to assume that an employee is up to the usual pressures of a job including disciplinary procedures.'

2. Importantly, the risk of the plaintiff sustaining a psychiatric injury only became foreseeable to the Council once the plaintiff had submitted his medical certificate on 14 August 2014 in respect of a psychiatric injury.

3. The Council exercised a contractual right in suspending the plaintiff from his employment under his contract of employment, and accordingly, the Council did not owe a duty of care to provide a safe system of decision-making to avoid the risk of foreseeable injury in relation to suspending the plaintiff or carrying out the investigation. In this regard, Brown J stated:

'The employee would not be left without a remedy if the direction was not reasonable. If the direction was not found to be a reasonable direction, a remedy would be available for breach of contract…'

4. If there was a duty of care, the Council did not breach the duty to the plaintiff because:

a. The Council was required to follow its internal policies and procedures to investigate the allegations against the plaintiff, which did not give rise to a breach of duty.

b. Because the Council ought not to have been aware of the foreseeability of the psychiatric injury until 14 August 2014, any failure to lift the suspension of the plaintiff prior to then was not a breach of duty.

c. While the Council did not inform the plaintiff of the investigation findings until January 2015, this was not unreasonable given the Council was informed of the plaintiff’s psychological state, and the result of the findings may have exacerbated his condition.

d. The only unreasonable action of the Council was failing to provide the plaintiff with a support person in one of the 2014 meetings. This was prior to the plaintiff submitting his medical certificate, so it was not foreseeable that this would result in a psychiatric injury. All of the other steps taken by the Council in the meetings were reasonable and provided the plaintiff with appropriate support.

Implications for you

The decision shows the high burden of proof which workers must meet in order to show that an employer has breached its duty of care in cases of pure psychiatric injuries. For employers, it is important to note that when the employer becomes aware of the worker having developed or is developing a recognised psychiatric injury, this will often be the time where the risk of psychiatric injury becomes foreseeable.

Updated 15 December 2022: An appeal by the worker was dismissed by the Queensland Court of Appeal on 9 December 2022.

Potter v Gympie Regional Council [2022] QSC 9

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