We hear the words “duty of care” used commonly but in terms of an employment relationship, what does this really mean for employers and how far does the duty really go? By way of introduction, there are a number of duties that are owed by an employer to an employee. These include, but are not limited to:
- The duty to provide competent staff;
- The duty to provide a safe place to work;
- The duty to provide proper and adequate materials; and
- The duty to provide a safe system of work and supervision.
This article, however, will focus on the duty owed by an employer to an employee to take reasonable care to protect the employee against foreseeable injury arising out of their employment. This duty may arise as an implied term in the contract of employment, or as a separate tort duty, or occasionally as an express contractual term. The duty of care owed by an employer to an employee is personal and said to be non-delegable. Effectively, this means that the employer’s duty cannot be avoided by delegating the duty to some other party.
It is also important to understand that the standard of care is a standard of “reasonable care” and does not amount to a guarantee of the safety for the employee. What is reasonable care in the circumstances is influenced by current community standards and will vary from business to business. For example, a safe system of work in a bank will be very different compared to a farm environment. An employer must also take into account the possibility of thoughtlessness, or inadvertence, or carelessness, particularly in a case of repetitive work. However, it is an employer’s obligation to not merely provide a safe system of work but it is also an employer’s obligation to “establish, maintain and enforce such a system…”.
Safe Work Australia reports that 92% of serious work-related mental disorder claims are attributed to work-related mental stress and the typical time off work for such a claim is approximately 15.7 weeks. In this regard, work-related mental disorders can take a significant toll on a worker’s health, but it can also have a negative impact on fellow colleagues as well as the business itself through low productivity and damaging workplace culture.
Managing psychological injury risks and supporting mental wellbeing can be challenging for employers as each employee is different and are affected by their own personal circumstances. However, as a firm, we have personally experienced a significant increase in claims that include work-related psychological injuries and believe employers need to be far more mindful of their obligations and their workplace practices in this regard.
Where an employee pursues legal action against their employer for breach of the duty of care, the Courts will apply the following guiding principles in relation to the question of whether any ensuing psychological injuries occurred as a result of the alleged breach:
- As stated above, in the absence of any express contractual term, an employer has an implied contractual duty of care to take reasonable care for the safety of their employees. This duty also extends to taking reasonable steps to prevent employees from suffering psychiatric harm. However, the content of the duty cannot be considered without taking account of the obligations which the parties owe one another under the contract of employment and to that end, the Court has indicated that the substance of the obligations is “fixed” at the time of the formation of the employment contract;
- Accordingly, the Courts will consider whether the psychiatric injury suffered by the particular employee was reasonably foreseeable. The High Court decision of Koehler v Cerebos (Australia) Ltd (2005) HCA 15 is a leading authority in relation to claims for psychiatric injury that arises out of stress from an employee’s workload which was the facts in this case. Koehler emphasised there was a requirement to look to the content of the duty and the parties’ obligation under the contract of employment. The decision also accepted that an employer is entitled to assume, in the absence of warning of the possibility of psychiatric injury, that the employee considered themselves able to do the job at the time of executing the contract. As such, in this decision, there was no suggestion the employee was particularly vulnerable and although she had complained, there was no evidence that she was putting her health at risk. The High Court stated that it could not be a breach of the employer’s duty of care to insist upon the employee carrying out the contractual duties to which she had agreed. In Koehler the employee provided evidence which intended to provide a comparison to her workload and the industry standard. However, the Court acknowledged her workload was excessive based on industry standard but nonetheless noted that the parties entered into a contract of employment which departed from the standard and this was accepted willingly by the employee;
- Once the Court determined the impact and weight of the employment contract against the alleged breach of the duty of care, the Court in Koehler moved to apply, for the most part, the test for determining tortious liability and whether the risk of a particular employee sustaining recognisable psychiatric illness was reasonably foreseeable. The test for “reasonably foreseeability” is whether the risk was not farfetched or fanciful. In assessing foreseeability, consideration must be given to the nature and extent of the work being done by the particular employee and the signs given by the employee concerned;
- If a reasonable employer should, in the circumstances of the case, have foreseen the risk of psychiatric injury to the particular employee, the next question is whether the employer is negligent. This requires the Court to assess what a reasonable employer would do in response to a risk of foreseeable harm. It would also be prudent to consider the probability and gravity of the harm to the employee, the nature and capacity of the employer and the cost and inconvenience of taking precautions by the employer to reduce the risk of harm. These considerations are to be interpreted against the contractual matrix at the time the employment contract was formed; and
- If the employer is found to have breached its duty, the Court must consider whether the breach caused the harm and/or loss suffered by the employee concerned. In a practical sense, this requires the employee to establish that it was more probable than not that the risk of injury would have been prevented if the employer had exercised reasonable care and/or put in place measures to prevent the risk of injury from occurring.
The decision of Koehler on its facts involved an employee whose complaint was that she was unable to carry out her stipulated duties in the time provided to her. In light of Koehler it is difficult for a claim to be successful where stress resulted from the amount of work the employee was required to perform as part of their duties articulated in the employment contract. However, Australian courts are developing a larger awareness that not all work stress cases are the same and other categories of cases are emerging where appropriate breaches of duty have been found. For example, in circumstances where bullying, victimisation or harassment are present.
Recent High Court Challenge
Notably, the High Court of Australia recently considered whether an employer had a duty of care towards its employees during a workplace investigation in the decision of Toni Govier v The Uniting Church in Australia Property Trust (Q)  HCATrans 65.
The facts of the case included Ms Govier and another employee, given the pseudonym “MD” during the proceedings, who were both disability workers and were responsible for the care of the employer’s client named Tara. During a cross over of their shifts, Ms Govier and MD engaged in an altercation with Ms Govier suffering both physical and psychiatric injuries by MD and was hospitalised as result of the injuries.
On the following day, Unitingcare issued Ms Govier a letter instructing her to attend an investigation interview. Ms Govier was also directed not to discuss the incident with any other employee and was stood down on full pay pending the outcome of the investigation. Ms Govier did not attend the interview and presented a medical certificate to her employer which stated she was unfit for work.
However, a fortnight after the incident, Unitingcare issued a further letter to Ms Govier claiming she had refused to attend an interview and advising of their preliminary view that she had engaged in violent and inappropriate behaviour against MD. Unitingcare had spoken to MD and their client, Tara where they found that the incident involved kicking, hitting and pushing by Ms Govier. Ms Govier was provided five days to show cause why her employment should not be terminated.
Ms Govier’s employment was ultimately terminated and she was diagnosed with a chronic post traumatic disorder and a major depressive condition. As a result, Ms Govier claimed damages for the aggravation of her psychiatric injury, arguing that the content of the two letters aggravated her chronic, post traumatic and major depressive disorders, and, had she not received the letters, her injuries would not have been so severe.
At first instance in the District Court of Queensland, Ms Govier was unsuccessful. The judge rejected her submission that there was a duty of care to provide a safe system of work which extended beyond the conduct of tasks for which an employee is engaged and that included a duty to provide a safe system of investigation and decision making.
Ms Govier appealed to the Queensland Court of Appeal who ultimately agreed with the District Court. The Queensland Court of Appeal followed the authority of State of NSW v Paige  NSWCA 235 where they found that the employer did not owe a duty of care to conduct its disciplinary procedures so as to avoid psychiatric harm to an employee.
Ms Govier appealed to the High Court of Australia. The special leave question before the High Court was to consider whether the decision of Paige precludes the obligation of an employer from having a duty of care to an employee merely because the acts are done in the course of the workplace investigation. Ms Govier had argued her claim in both tort and contract, relying upon the implied obligations under the contract of employment.
Judge Edelman found that the contractual obligation and the tortious obligation were both entrenched in the same concept of an assumed responsibility but decided that the assumed responsibility was exclusively shaped by the terms of contract. On the other hand, Justice Gordon pointed out the contract of employment was not exhibited at trial and therefore they did not have the terms said to inform the conduct of the employer. Without having the contract of employment before them, they were unable to understand the contractual framework. In particular, the High Court was unable to properly consider the question as to the existence and scope of any duty of care under the contract.
In the end, the High Court found that given the contract of employment’s centrality to the determination of the issues, the proceeding was not a suitable occasion to determine the issues. Accordingly, special leave to appeal the decision to the High Court was not granted.
Consequently, the issue as to whether investigations form an aspect of the tortious duty to provide a safe system of work was left unanswered. As the decision of the High Court was not based on the merit of the argument but dismissed on a technicality as result of not having the terms of the contract before them, the issue has been left unsettled and therefore open to further argument and judicial consideration.
Lessons for Employers
Even though Ms Govier was, in this instance, unsuccessful, the case highlights the importance for employers to be mindful of an employee’s wellbeing during workplace investigations and ensure employers understand the scope of their duty of care and obligations, including having in place the tools and support necessary to meet these obligations.
The consequence of good employee management creates a positive and productive business, less workers’ compensation claims and an engaged workforce. In this regard, we suggest the following:
- Ensure you have an employment contract for each employee outlining their role and duties;
- Have in place clear policies and procedures to manage risk and complaints including bullying and harassment policies, investigation policy and disciplinary action policies;
- Be mindful of the risks associated with a workplace investigation including employees under investigation and suffering psychological injuries;
- Ensure the business engages investigators who are trained and experienced;
- Provide training to management in order to recognise and address safety risks including mental health;
- Where a breach of policy occurs, take steps to address the complaint or safety risk appropriately;
- Provide support to management in order to recognise and respond appropriately to employee concerns regarding managing workloads, being alert to increase absenteeism or significant changes in the employee’s performance or behaviour; and
- Provide employees training on mental health and how to manage stress – consider incorporating mental health programs or initiatives and providing access to employee assistance services.
If further information in relation to any aspect of this alert is required, or should you wish to further discuss the steps that can be taken to mitigate the risks in this area, please do not hesitate to contact us.
This alert is not intended to constitute, and should not be treated as, legal advice.
 McLean v Tedman (1984)155 CLR 306 at 313.