Scott Falvey, Wilson Lawyers: Recovering Damages for Pure Psychiatric Injury in the Workplace

© McInnes Wilson Lawyers 2013 Page 1 of 23 www.mcw.com.au 500889:4363346_1

Psychiatric Injury – when can bullying in the workplace lead to damages?1 By Scott Falvey• Principal• T 07 5443 9612• E [email protected]

“It may well be the case that it 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 injury always requires

a response for the purposes of attributing legal responsibility.”

per Spigelman CJ in Nationwide News Pty Ltd v Naidu2

This paper will deal with some of the legal principles associated with the recovery of damages at

common law for „pure‟ psychiatric injury. This reference to pure psychiatric injury is in the context of no

physical injury being suffered. That is, the psychiatric injury is a primary injury caused by wrongful acts

or omissions of a tortfeasor (or wrongdoer) as opposed to the psychiatric injury being secondary to, or

part of the consequence of, a primary physical injury.

This paper generally contemplates a potential claim for damages arising from psychiatric injury alleged

to be caused by, or as a result, of bullying, intimidation or harassment in the workplace.

There are restrictions in most Australian States, and national jurisdictions, as to when a person can

pursue a claim for damages for personal injury. Some States have „thresholds‟ of levels of impairment

that must be reached before an injured worker will have a „right to sue‟ or entitlement to claim for

damages and other States or jurisdictions have a scheme almost entirely regulated by statute. Rather

than focus on the minutiae of the processes or system that each jurisdiction has in this area – this paper

tries to distil the legal principles that operate to guide the circumstances when a Court might allow an

injured worker to recover damages at common law when such right to damages is available.

1 Scott Falvey LLB (Bond) LLM (Health and Medical) (Univ. of Melb.).

2 (2007) 71 NSWLR 471 at 477 - 478 at [21] – [26].

mailto:[email protected]


A review of this area of the law cannot be undertaken without considering the decisions of the High

Court in Tame v the State of New South Wales (Tame) and Annetts v Australia Stations Pty Ltd

(Annetts)3

The High Court radically overhauled the circumstances that an injured person could potentially pursue a

claim for damages for pure psychiatric injury.

In Tame the Plaintiff was driving her motor car when a vehicle travelling in the opposite direction collided

with her. The driver of the other vehicle was breath tested by police and had a blood alcohol reading of

0.14. The police took down all relevant particulars of the accident and told the Plaintiff the other driver

was at fault. A number of charges were laid against him. Unfortunately for Constable Morgan, he made

an error when filling out the police report and allocated the blood alcohol reading to the Plaintiff rather

than the defending driver. In the course of her rehabilitation the Plaintiff became aware of the police

report and that she had a blood alcohol reading of about 3 times the legal limit. She had a very strong

view on drinking. She was sensitive to the terrible effects drink driving could have on people in her

previous employment as a nurse. She took it as a serious affront to her reputation that she had been

incorrectly referred to as someone who had a blood alcohol reading in excess of the legal limit. She

decompensated and alleged she developed a psychiatric condition because of this misinformation. She

sued the police officer, Constable Morgan, who made the mistake and vicariously his employer the state

of New South Wales. The Plaintiff succeeded at first instance.4

Constable Morgan successfully appealed.5 The Plaintiff made application for special leave to the High

Court. She successfully secured special leave but her appeal was dismissed with costs.6

In Annetts, Mr & Mrs Annetts sued for pure psychiatric injuries. In that case their 16 year old son had

gone to work for the Defendant as a jackeroo in Western Australia. In December 1986 he was reported

as missing. It was clear he was in serious trouble. When Mr Annetts was informed of this by the police,

over the telephone, he collapsed. There was a long search for the boy in which the parents took part.

His bloodstained hat was found in January 1987 and in April of 1987 his body was found having died of

3 [2002] HCA 35.

4 (1998) 27 MVR 387.

5 (2000) 49 NSWLR 21.

6 [2002] HCA 35.


dehydration, exhaustion and hypothermia. Mr Annetts was shown a photograph of the skeleton which

he identified as that of his son. The Plaintiffs failed at first instance. It was held they failed to prove it

was reasonably foreseeable that they would sustain psychiatric injury. It was held it was not reasonably

foreseeable that a person of normal fortitude would have suffered psychiatric injury when having

communicated to them the news of their sons disappearance in these circumstances. Secondly, it was

held at first instance that they failed to prove they had suffered a „sudden assault‟ on their senses

because neither of the Plaintiffs perceived the incident or its aftermath. Further, it was contended there

were no facts conveyed to the parents which made the situation any more horrifying because of their

distance involved. There was a lapse in time between the communication of the boys disappearance

and a lack of any immediate consequence. Accordingly, it was contended that „causal proximity‟ was not

established. In other words the Court was not satisfied that any injuries that were suffered were so

closely connected to the alleged negligent communication of information that the injury was considered

to be too remote.

Historically there was a need for a sudden sensory perception or an „insult to the senses‟ for there to be

recovery in circumstances where a person was not a „primary victim‟ to an injury. The person in these

circumstances is referred to as a „secondary victim‟. In cases where the „secondary victim‟ seeks to

recover mere or pure psychiatric damage. On appeal the Plaintiff‟s were again unsuccessful. On appeal

the Court held that applying the „normal fortitude‟ test the Defendant would not have foreseen that the

parents would have suffered the deep anxiety and grief response that they did such that it would develop

into a psychiatric injury. The matter made its way to the High Court. The Annetts were successful

before the High Court. By now a majority of 4:3.

The essence of the majority decision of the High Court allowed for the recovery of pure psychiatric injury

even where the psychiatric injury has resulted from an experience other than a „direct insult to the

senses‟. It has removed the arbitrary requirements of the different „tests‟ that existed as „hurdles‟ for a

Plaintiff to overcome to be able to recover in this context.

However it is important to note that the decision in Annetts does not absolve a Plaintiff from still having

to prove that any psychiatric injury must be proven to be causally connected to the negligent conduct

which is the subject of the claim.


It was simply put by Gleeson CJ in his opening remarks concerning the 2 cases where he endorsed the

general tenor of what Gummow J and Kirby J said in their judgments:

I agree with Gummow and Kirby JJ that the common law of Australia should not, and does not, limit liability

for damages for psychiatric injury to cases where the injury is caused by a sudden shock, or to cases where

a Plaintiff has directly perceived a distressing phenomena or its immediate aftermath. It does not follow,

however, that such factual considerations are never relevant to the question whether it is reasonable to

require one person to have in contemplation injury of the kind that has been suffered by another and to take

reasonable care to guard against such injury. In particular, they may be relevant to the nature of the

relationship between Plaintiff and Defendant, and to the making of a judgement as to whether the

relationship is such as to import such a requirement.

Kirby and Gummow JJ squarely acknowledged the unique nature of injury litigation with respect to pure

psychiatric claims. They observed that advances in medical diagnosis enabled doctors and other health

care professionals to distinguish feigned from genuine claims and reminded us that it is necessary to

look at the primary aspects of the cause of action in negligence being breach, causation and a

recognisable psychiatric illness that is not too remote. They held:

A fundamental objective in the law of negligence is the promotion of reasonable conduct that averts

reasonable harm… It is the assessment, necessarily fluid, respecting reasonableness of conduct that

reconciles the Plaintiff‟s interest in protection from harm with the Defendant‟s interest in freedom of action.

So it is that the Plaintiff‟s integrity of person is denied protection if the Defendant has acted reasonably.

However, protection of that integrity expands commensurately with medical understanding of the threats to it.

Protection of mental integrity from the unreasonable infliction of serious harm, unlike protection from

transient distress, answers the „general public sentiment‟ underlying the tort of negligence that, in a particular

case, there has been a wrong doing for which, in justice, the offender must pay. Moreover, the assessment

of reasonableness, which informs each element of the cause of action, is inherently adapted to the

vindication of meritorious claims in a tort whose hallmark is flexibility of application.7

Gummow and Kirby JJ in their joint judgment identified four reasons why psychiatric injuries need to be

treated differently than physical injuries:

7 [2002] HCA 35 at [185].


1. Psychiatric harm is less objectively observable than physical injury and is therefore more likely to

be trivial or fabricated and is more captive to shifting medical theories and conflicting evidence;

2. Litigation in respect of pure psychiatric harm is likely to operate as unconscious disincentive to

rehabilitation;

3. Permitting full recovery from purely psychiatric harm risks indeterminate liability and greatly

increases the class of persons who may recover („the floodgates argument‟); and

4. Liability for purely psychiatric harm may impose an unreasonable or disproportionate burden on

Defendants.8

It is worth highlighting that all members of the High Court agreed that damages could not be recoverable

for any condition which was of a „lower order‟ than a recognisable psychiatric illness. This is a distinction

that was first advanced in New Zealand by the Court of Appeal in Van Soest v Residual Health

Management Unit.9

Accordingly, a Plaintiff who alleges psychiatric injury as a result of grief, anxiety, fear or annoyance will

not be able to recover and as Gummow and Kirby JJ emphasised:

Grief and sorrow are among the „ordinary and inevitable incidents of life‟; the very universality of those

emotions denies to them the character of compensable loss under the tort of negligence.10

Hayne J challenged how it is that distinctions can be drawn between distress and psychiatric illness:

Is it to be divided according to psychiatric opinion? That is, is the law to provide a remedy for any injury

which prevailing psychiatric opinion would classify as a psychiatric illness? Or is the law the prescribe the

criteria by which the distinction is to be made [no doubt leaving to the expert evidence of psychiatrists or

other suitably qualified witnesses to reveal whether those criteria are met in a particular case]? Psychiatric

illness cannot yet be correlated, in every case, with the abnormality of the physiological or biochemical brain

function. Objectively, verifiable proof of a psychiatric illness is not, or at least is not always, possible.11

8 Freckelton I, Compensation for “Pure Psychiatric Injury”: Resolution from the Australian High Court? 10 JLM 133 at 136.

9 [2000] 1 NZLR 179 at 197.

10 [2002] HCA 35 at [193].

11 [2002] HCA 35 at [289].


Does a Plaintiff still need to be „of normal fortitude‟?

No.

The majority rejected the notion that the normal fortitude of a Plaintiff needs to be established as a

separate and definitive test of liability.12

What the Court went on to explain is that liability is restricted to those circumstances where a Plaintiff

can establish that he or she has suffered a recognisable psychiatric illness which the tortfeasor or

Defendant by any objective standard, have known or ought reasonably to have known the Plaintiff could

have suffered.

If a tortfeasor does not know, or ought not reasonably to have known, that the Plaintiff was susceptible

or vulnerable to a recognisable psychiatric illness then the Defendant or tortfeasor will only be liable for

what is „reasonably foreseeable‟. It is submitted that this is the case both in terms of the class of

persons who the tortfeasor ought to have recognised could have been effected by their breach of duty

and in terms of the injuries potentially caused.

Notwithstanding this apparent „rejection‟ of the normal fortitude test, the Court still suggested that the

„ordinary fortitude‟ of an individual Plaintiff will serve as a useful determinant of whether or not a

psychiatric injury is foreseeable.13

Gummow and Kirby JJ put it this way:

The standard of „normal fortitude‟ is not a freestanding criterion of liability, but a postulate which assists in

the assessment, at the stage of breach, of the reasonable foreseeability of the risk of psychiatric harm.14

Hayne, McHugh and Cullinan JJ disagree with the majority and felt that the normal fortitude test should

still be heralded as a critical test to determine whether or not liability should fall against the tortfeasor.

Does a Plaintiff still need to have suffered „nervous shock‟?

12

[2002] HCA 35 at [16] per Gleeson CJ; at [62] per Gaudron J; at [188] per Gummow and Kirby JJ; Freckelton, I, Compensation for “Pure Psychiatric Injury”: Resolution from the Australian High Court? 10 JLM 133 at 137.

13 [2002] HCA 35 at [62] per Gaudron J.

14 [2002] HCA 35 at [189] .


No.

You will recall that reference to „nervous shock‟ in this regard is with reference to the „sudden affront to

the senses‟.

Does a person have to have directly perceived an event or its immediate aftermath in order to be able to

recover?

No.

By majority, the High Court determined that to treat someone who perceived a distressing event or its

aftermath are the only persons who may recover negligently for pure psychiatric harm, results in

anomalies that are incompatible for long established principles of negligence. Gaudron J neatly put it:

A person will be able to recover for psychiatric injury only if there is some special feature of the relationship

between that person and the person whose acts or omissions are in question, such that it can be said that the latter

should have the former in contemplation as a person closely and directly effected by his or her acts.15

General Principles – Liability for Psychiatric Injury

The four fundamental issues to be examined in a negligence action are:

1. The existence of a duty of care;

2. A breach of the duty of care so owed;

3. Damage occasioned by the breach of duty;

4. Foreseeability of damage.

Duty

An employer owes a duty of care to its employees to exercise reasonable care not to expose them to

any unnecessary risks of injury.16

15

[2002] HCA 35 at [52].


This duty is divided into subcategories such as the provision of a safe place of work, a safe system of

work and safe plant and equipment.17

It is clear that the duty extends to psychological injuries, however the decided authorities reveal that

such cases are rarely successful for reasons associated with foreseeability, breach and causation.18

The scope of the duty of care in situations of psychiatric injury resulting from workplace stressors involve

unique considerations. The High Court of Australia in Koehler v Cerebos (Australia) Limited (Cerebos)19

held:

The content of the duty which an employer owes an employee to take reasonable care to avoid psychiatric

injury cannot be considered without taking account of the obligations which the parties owe one another

under the contract of employment, the obligations arising from that relationship which equity would enforce

and, of course, any applicable statutory provisions.

In Cerebos, the High Court said this:

[21]. The content of the duty which an employer owes an employee to take reasonable care to avoid

psychiatric injury cannot be considered without taking account of the obligations which the parties

owe one another under the contract of employment, the obligations arising from that relationship

which equity would enforce and of course, any applicable statutory provisions.

…

[35]. The duty which an employer owes is owed to each employee. The relevant duty of care is

engaged if psychiatric injury to the particular employee is reasonably foreseeable. … that invites

attention to the nature and extent of the work being done by the particular employee and signs

given by the employee concerned.20

16

Hamilton v Nuroof (WA) Pty Ltd (1956) 96 CLR at 25. 17

Sappideen C., Fleming‟s The Law of Torts, 10th Edition, Law Book Co, 2011 (Fleming) at [24.40] page 591.

18 See New South Wales v Fahy (2007) 232 CLR 486, Koehler v Cerebos (Australia) Limited (2005) 222 CLR 44, Midwest Radio v

Arnold – unreported – Supreme Court Queensland – BC9900232. 19

(2005) 222 CLR 44 at [21]. 20

(2002) 222 CLR 44 at 53 and 57 [21] – [35].


Breach of Duty

Whether a breach of the duty of care an employer owes to an employee has occurred is a question of

fact, and involves a balancing of factors commonly referred to as the „Shirt calculus‟21 namely:

…the perception of the reasonable man‟s response calls for a consideration of the magnitude of the risk

and the degree of probability of its occurrence, along with the expense, difficulty and inconvenience of

taking alleviating action and any other conflicting responsibilities which the Defendant may have. It is only

when these matters are balanced out that the tribunal of fact can confidently assert what is the standard of

response to be ascribed to the reasonable man placed in the Defendant‟s position.

In cases involving psychiatric injury sustained in a workplace, other considerations can become relevant.

In particular, in a case where an injured worker alleges damage because of bullying and harassment a

Court will need to consider procedural fairness in relation to disputant co-workers.

Further, it is essential when analyzing the issue of whether a breach of duty has occurred to have regard

to the prospective nature of the shirt calculus, as detailed by the High Court in Rosenberg v Percival

(Rosenberg)22:

… in the way in which litigation proceeds, the conduct of the parties is seen through the prism of hindsight.

A foreseeable risk has eventuated, and harm has resulted. The particular risk becomes the focus of

attention. But at the time of the allegedly tortuous conduct, there may have been no reason to single it out

from a number of adverse contingencies, or to attach to it the significance it later assumed. Recent

judgments in this Court have drawn attention to the danger of a failure, after the event, to take account of

the context, before or at the time of the event, in which a contingency was to be evaluated… this danger

may be of particular assistance where the alleged breach of duty of care is a failure to warn about the

possible risks associated with a course of action, where there were, at the time, strong reasons in favour of

pursuing the course of action.

The development of a psychiatric injury from stressful events particularly lends itself to being governed

by the above considerations set out in Rosenberg.

21

This term refers to the legal test set out in a decision of the High Court of Australia in Wyong Shire Council v Shirt (1980) 146 CLR 40. 22

(2001) 205 CLR 434 at [16] per McHugh J.


Causation

Causation will be established if it appears the injured worker would not have suffered the injuries

complained of without the negligence of the employer, applying a test of „common sense and

experience‟23.

It is sufficient for an injured worker to prove that the tortuous act or omission by the employer was a

cause rather than the sole cause.24

Psychiatric injury claims involve unique questions of causation. Bullying and harassment claims often

involve a series of incidents. These are often disputed. For example, in Mid West Radio Limited v

Arnold25, the Trial Judge accepted that some events happened and were breaches of duty, but rejected

other events. The question then became whether the medical evidence apportioned the development of

the psychiatric injury to the accepted events and breaches only, or the wider alleged conduct. As it was

the latter, the injured worker lost on appeal.

Thus, it is insufficient for an injured worker to adduce medical evidence that the psychiatric condition was

caused by bullying or harassment generally. Rather, there is a need for there to be evidence to support

the contention that specific events occurred and that those events caused injury.

Foreseeability

Historically, psychiatric injury claims depended on whether the event in question was capable or

producing psychiatric injury in someone of „normal‟ fortitude. This test has been rejected by the High

Court as an overriding test.26

However, the extent to which the events in question were likely to cause psychiatric injury in a normal

person is still a relevant consideration in relation to foreseeability. This was the principle reason for why

the Plaintiff failed in the matter of Tame v New South Wales (Tame).

23

March v E and M H Stramere Pty Ltd (1991) 171 CLR 506 at 514. 24

Chapman v Hearse (1961) 106 CLR 112 at 120. 25

Unreported – Supreme Court of Queensland – BC9900232. 26

Tame v New South Wales; Annetts & Anor v Australian Stations Pty Ltd (2002) 211 CLR 317.


In some individuals even slight innocuous events could lead to psychiatric decompensation. This is what

occurred when Ms Tame discovered she had wrongly been recorded as driving under the influence of

alcohol in a police document. However, in the context of a workplace injury, an employer need only

have regard to preventing events that could foreseeably result in psychiatric harm to an employee.

Again, in Cerebos, the majority of the High Court said:

[33]. In Tame v New South Wales the Court held that „normal fortitude‟ was not a pre-condition to

liability for negligently inflicting psychiatric injury. That concept is not now to be re-introduced into

the field of liability as between employer and employee. The central enquiry remains whether, in

all the circumstances, the risk of a Plaintiff (in this case the Appellant) sustaining a recognisable

psychiatric illness was reasonably foreseeable, in the sense that the risk was not far fetched or

fanciful.27

Reasonable foreseeability involves more than mere predictability.28

Relevant principles are usefully summarised by Spiegelman CJ in National Wide News Pty Ltd v Naidu:29

[21]. [Cerebos] affirms the line of High Court authority, including, Tame, Annetts and Gifford30

, which

focuses attention on the purpose for which the enquiry 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.

[22]. As Gleeson CJ said in Gifford:

“Reasonable foreseeability involves more than mere predictability.”

In the same passage he Honour said:

”Advances in medical knowledge have made us aware of the variety of circumstances in which

emotional disturbance can trigger, or develop into, recognisable psychiatric injury.”

And concluded:

27

Above at 57 at [33]. 28

Guorgi v Pipemakers Australia Pty Ltd [2013] QSC 198. 29

(2007) 71 NSW LR 471 at 477 – 478 at [21] – [26]. 30

(2003) 198 ALR 100; [2003] HCA 33.


“[Advances] in the predictability of harm to others… do not necessarily result in a co-extensive

expansion of the legal obligations imposed on those whose conduct might be a cause of such harm.

The limiting consideration is reasonableness, which requires that a count be taken both of interests

of Plaintiffs and of burdens on Defendants.

The reasoning and result in [Cerebos] confirms this analysis. It may well be the case that

it 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.

It does appear that over recent decades the helping professions and the pharmaceutical

industry have medicalised many of the normal stresses of every day life, including working

life. The law has not expanded legal responsibility for conduct in the same way. [Cerebos]

makes it clear that the common law of Australia will not do so, failing to follow such

developments in other common law jurisdictions.

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. As Hayne J put it in Tame:

[a]. Plaintiff will not recover damages for an injury which psychiatric opinion recognises as a

psychiatric injury by demonstrating only that such an injury was reasonably foreseeable

and that the Defendant‟s negligence was a cause of the injury which the Plaintiff

sustained.”

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 foreseeability test of a risk that is

not far fetched and fanciful, has been satisfied.31

What an employer, acting reasonably, must do to satisfy the requisite duty of care, „requires looking

forward to identify what a reasonable employer would have done, not backward to identify what would

have avoided the injury.‟32

31

(2007) 71 NSW LR 471 at 477 – 478. 32

New South Wales v Fahy (2001) 205 CLR 434 at [31].


As the Supreme Court of Queensland‟s Court of Appeal observed in Hegarty v Queensland Ambulance

Service:

… „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 extent 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.33

The important of recognising the prospective nature of the enquiry in cases involving psychiatric injury

was emphasised by Spigelman CJ in Naidu:

The prospective nature of the enquiry as to breach has particular significance in the case of the risk of

psychiatric injury. In any organisation, including an 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.34

A Court when assessing the circumstances where it is alleged that an injury has been suffered as a

result of the „wrong doing‟ of another is a prospective, not retrospective, test.

This is again further highlighted by the High Court in Vairy v Wyong Shire Council:

[124]. Again, because the enquiry is prospective, it would be wrong to focus exclusively upon the

particular way in which the accident that has happened came about. In an action in which a

Plaintiff claims damages for personal injury it is inevitable that much attention will be directed to

investigating how the Plaintiff came to be injured. The results of those investigations may be of

particular important in considering questions of contributory negligence. But the apparent precision

of investigations in to what happened to the particular Plaintiff must not be permitted to obscure the

nature of the questions that are presented in connection with the enquiry into breach of duty. In

particular, the examination of the causes of an accident that has happened cannot be equated with

the examination that is to be undertaken when asking whether there was a breach of a duty of care

33

[2007] QCA 366 at [47]. 34

Above at 477 at [20].


which was a cause of the Plaintiff‟s injuries. The enquiry into the causes of the an accident is

wholly retrospective. It seeks to identify what happened and why. The enquiry into breach,

although made after the accident, must attempt to answer what response a reasonable person,

confronted with a foreseeable risk of injury, would have made to that risk…?35

Vicarious Liability

Vicarious liability is the liability of a person for the wrong doing of another, even if the first person has

done nothing wrong. Relevantly for the purposes of this paper, vicarious liability or vicarious

responsibility is in the context of an employer being vicarious liable for the wrong doing of one of its

employees – especially in the context of bullying and harassment in the workplace.

This does not mean that an employer is deemed to have done the wrongful act. It means the employer

is responsible or answerable in law for the wrong of another.

At present, the common law recognises vicarious liability only in employment situations.

One of the difficult features of claims for personal injury to workers in their workplace as a result of

bullying and harassment is that the circumstances that such injury might be suffered arises out of

deliberate and intentional acts or omissions by the wrongdoer or tortfeasor. Some legal commentators

argue that an employer should not be responsible for the actions of a wrong doing employee. However,

other legal commentators argue, there are really no „high minded legal principles underlying vicarious

liability; it is simply a policy device for fixing liability on a financially responsible Defendant.‟36

An employer will be liable to the negligent acts of employees when they are acting in the course of their

employment, if their acts can be regarded as wrongful and unauthorised modes of performing an

authorised task.37

This principle does not extend or apply to intentional acts of wrong doing.38

Can bullying be considered to be an unauthorised mode of performing authorised tasks?

35

(2005) 223 CLR 422 at 461 at 124. 36

See Queensland Law Reform Commission – Vicarious Liability – Discussion Paper – July 1995 at page 39; referring to Fleming. 37

See Fleming at page 450. 38

New South Wales v Lepore (2003) 212 CLR 511.


This is a decision which will ultimately turn on the facts of any given case. There could be

circumstances where acts of bullying might be as a result of negligence but then other circumstances

where the acts are intentional and malicious.

The relevant test is whether the acts were an attempt to further the interests of the employer, or an act

done purely in the interests of the actor or tortfeasor (wrongdoer).

Generally speaking, for vicarious liability to attach to a wrongdoers actions in the context of workplace

bullying, those acts would have to be characterised as „negligent‟ as opposed to „intentional‟ or even

criminal. For an injured worker to establish that the actions of a co-worker were not nice, less than

ideal, not politically correct or best office practice daily life in a workplace setting involves many different

personalities, which are required to interact with each other, and on certain occasions, and for certain

reasons, there can be an adverse interaction that does not necessarily be speak of conduct that will

amount to a breach of the duty of care owed. Again, much will turn on the factual matrix of any given

situation. However, some of the factual issues that will be relevant include the relationship between the

wrongdoer and the injured worker, concepts of „control‟ and „authority‟, the frequency and duration of

inappropriate behaviour and the employers awareness of such behaviour and any remedial action taken

(or not taken).

General Principles – Liability – Bullying in the Workplace

Generally, for an injured worker to recover damages for psychiatric injury (distinct from statutory benefits

or workers‟ compensation):

1. The injured worker must suffer a recognisable psychiatric illness. Mere stress, grief or sorrow,

however severe does not sound in damages.39

2. Recognisable psychiatric injury must be separately foreseen. That is, the foreseeable risk of injury

must be injury in that form.

3. In assessing whether psychiatric injury is reasonably foreseeable, it is assumed the injured worker

is a person of reasonable fortitude.40

39

Mt Isa Mines Ltd v Pusey (1970) 125 CLR 383 per Windeyer J.


4. The question of foreseeability of psychiatric injury is addressed with hindsight, that is foreseeability

of psychiatric illness is considered after the event, in the light of all that has happened.41

5. Foreseeability acts as a control mechanism.

6. The act or omission of the wrongdoer must have „caused‟ the psychiatric injury. There are often a

number of stressors which are working upon a particular person before he or she decompensates

to the point where there is a psychiatric illness. The stressor(s) alleged to constitute the breach of

duty, must have materially contributed to the injury before the „injury‟ has been suffered such as to

enable a „cause of action‟. If there are two possible causes, one consistent with negligence and

one not, and these are mutually exclusive rather than capable of being combined, an injured

worker will fail if each cause is of equal value such as to give rise to conjecture.

7. It is a well established principle of the law of negligence that a tortfeasor must take his or her victim

as he or she finds them. This includes all of the unusual susceptibilities to serious physical and

psychological injury. This is known as the „egg shell skull‟ rule. It applies in all cases of personal

injury including those involving psychiatric injury. A Defendant will be liable for the full extent of the

injuries caused, even though the injuries may not have been so extensive but for the special

vulnerability attributable to the particular injured worker. Yet in those circumstances where an

injured worker‟s pre existing susceptibility has already damaged the injured worker for example the

is already being treated by a particular psychiatric medication, damages are generally assessed on

the basis the Defendant is liable only for that loss which is caused by his or her negligence and not

in respect of any loss which was inevitable prior to the negligence. The injured worker can have a

special susceptibility or vulnerability to psychiatric injury and still recover damages. In this respect,

psychiatric illness can be coincidental rather than causal with respect to a breach of duty.

However it is important to note that there is a distinction between an inevitable manifestation of a

psychiatric condition and an acceleration of it. If there has been an acceleration of an already pre-

existing psychiatric condition or illness then this may still be the subject of a claim but it would be

regulated by those principles set out in decisions such as Wilson v Peisley42(Wilson) In Wilson the

40

White v Chief Constable of South Yorkshire Police (White) [1998] 3 WLR 1509. 41

Above in White at page 1520. 42

(1975) 50 ALJR 207; 7 ALR 571.


Plaintiff was injured in a motor vehicle accident. In addition to physical injuries the car accident

triggered a rare latent psychiatric condition. At first instance, in assessing damages the trial judge

took into account the Plaintiff‟s general psychological condition before the accident and the

possibility that some other event may have precipitated the disease had the negligence not

occurred. On appeal, the New South Wales Court of Appeal disagreed with this approach and

substantially increased the damages. Ultimately the case made its way to the High Court. The

High Court restored the trial Judge‟s award. The High Court considered the likelihood of the

Plaintiff developing this latent condition, in any event, justified a reduction in the award. A

Defendant cannot be held legally responsible for events which would have occurred anyway.

8. In any claim for damages alleging psychiatric injury arising from workplace bullying, the events that

are the subject of the claim are varied and must be analysed incident by incident. The analysis

often involves a Court assessing the different recollections of people, some time ago, in a forum

that is bereft of the context and circumstance at the time that injurious act (or omission) occurred.

9. Provided mental injury of some sort is foreseeable43 it matters not how drastic or unusual the form

of mental injury is.

In Hoffmeuller v Commonwealth 44 Glass JA usefully said:

Mt Isa Mines Ltd v Pusey … establishes the legal position that a Defendant is liable for the particular mental

condition of the Plaintiff no matter how rare a clinical phenomena it may be, if mental disturbance of some

kind was foreseeable there is a possible consequence of the Defendant‟s breach of duty.

Where is the law heading?

In Patrick Stevedores (No. 1) Pty Ltd v Vaughan45 the Court of Appeal upheld an award of damages

totalling $610,604.32 for the psychiatric injury the injured worker suffered as a result of him being

required to „cross a picket line‟ during the waterfront dispute. The Court of Appeal found that the

Defendant employer had in effect created a dangerous situation in the way it had determined that it

would seek to break up the monopoly the union had with respect to workforce membership. In this

43

Mt Isa Mines v Pusey (1970) 125 CLR 383. 44

(1981) 54 FLR 48. 45

[2002] NSWCA 275.


regard the Defendant had „locked out‟ and dismissed most of its workforce. The union took industrial

action in protest against this. In addition to a number of legal challenges and separate court cases the

union established a picket line at the work site in and effort to dissuade workers continuing to provide

labour to the Defendant. Obviously the environment was emotionally charged and there were regular

and patent expressions of tension. The injured worker argued that his injury was as a result of physical

attacks at work and constant abuse from friends and coworkers who were members of the Maritime

Union of Australia. The injured worker was called a „scab‟ and there was evidence that threats had been

made against him and his family. The injured worker was a committed unionist.

The Court considered that it was inevitable that there would be major confrontations between those on

the picket line and workers who were brought onto the work site – of which the injured worker was one.

The Court said that the Defendant employer should not have required workers like the injured worker to

provide labour in an environment where they were being subjected to threats of physical harm and

abuse. When the Defendant chose to send in workers across the picket line it did so at the risk of

exposing those workers to a reasonably foreseeable risk of injury of the type suffered by the injured

worker.

This case is of interest because of the significant award of damages and the preparedness of the Court

to compensate an injured worker in circumstances where the injured worker clearly exercised a certain

level of independent choice. In the context of the industrial dispute in which this case occurred, and the

injured worker‟s commitment to the union, it would appear that he chose to cross the picket line in the

circumstances that he did. This exercise of choice was not sufficient to undermine the employer‟s

obligation to respond reasonably to a foreseeable risk of harm.

In MidWest Radio Limited v Arnold46 an injured worker sued her employer in relation to a psychiatric

condition which she said the employer should be held vicariously liable. Her allegations centred on the

conduct of her superior. The injured worker alleged her superior was abusive, belittling, sarcastic,

aggressive and generally bullied her. This was often accompanied by her being exposed to foul

language. Apparently this was the general „demeanour‟ of the injured worker‟s supervisor and he

treated other people in a similar way. At first instance, the Trial Judge was satisfied that as the injured

46

Unreported – Supreme Court of Queensland DC9900232 - Court of Appeal – 12 February 1999.


worker‟s supervisor was one of „the controlling minds‟ of the Defendant, his conduct was inappropriate

and for this the Defendant should be held vicariously liable. The Defendant newspaper appealed. The

majority of the Court of Appeal47, overturned various findings of fact relating to the occurrence of certain

incidents involving the injured worker‟s superior. The consequence of this was that the factual basis

upon which a psychiatric diagnosis had been made was undermined. The Court of Appeal highlighted

the injured worker had a vulnerable personality. In light of the injured worker‟s vulnerabilities and in

considering the duty owed is that which would be owed to an average person of normal fortitude, once

the factual matrix necessary to justify the psychiatric diagnosis that was made was undermined – the

injured worker could not establish a causal connection between the alleged condition and the negligent

conduct. The Defendant newspaper was successful on its appeal. The injured worker failed.

In Wylie v South Metropolitan College of TAFE48 the Supreme Court of Western Australia‟s Full Court49

rejected an injured worker‟s appeal that the Trial Judge should have found that she was given duties and

hours of work which were calculated to, and did, place her under so much physical and mental strain

that it was foreseeable that, and there was a risk that, she might develop psychiatric or psychological

disorders or illnesses. The appeal went on to contend that the illnesses which did develop were indeed

caused by those circumstances.

The worker‟s claim was brought in circumstances where there was evidence that between 1993 and

March 1996 she was a busy Assistant Librarian who worked a lot of overtime with quite a lot of the work

that she had to do, being work which persons with a higher level of formal education and training would

usually be engaged to do.

The Trial Judge found that the worker‟s duties were not beyond her capacities although the Trial Judge

accepted that the demands in terms of the volume of work and the position she occupied were very

considerable. This finding was endorsed on appeal.

However, both Courts, at trial and on appeal, were not satisfied that the Defendant breached any duty of

care owed to the worker by way of the circumstances that she was required to undertake her work.

47

McPherson JA and Williams J. 48

[2003] WASCA 34. 49

Murray, Anderson and Steytler JJ.


More importantly, even if the worker had of been able to establish a breach of duty, neither the Trial

Judge nor the Full Court were satisfied that any breach associated with the system of work was

causative of any recognisable or compensable psychiatric illness.

Both Courts found that any psychiatric illness the worker suffered was as a result of an unrelated fall in

March 1996, and the pain and loss of mobility caused by this rather than any specific aspect associated

with her allegations that she was exposed to excessive responsibility or excessive work commitments.

His Honour Justice Murray framed the ultimate question to be determined on appeal as follows:

[As to] the „duty‟ questions; the question [is] whether the Respondent owed to a class of persons of which

the Appellant was a member, in this case the Respondent‟s library employees, a duty of care not to ask

persons to perform duties in superior positions to those they presently occupied and not to work hard in the

performance of those duties, but to restrict those employees to duties of a less demanding nature, which it

may be satisfied is within their capacity, in case they should suffer such psychological trauma as will

amount to the contraction of a recognised psychiatric illness.

The worker‟s appeal was dismissed.

In Guorgi v Pipemakers50 the Supreme Court of Queensland‟s Court of Appeal51 dismissed the injured

worker‟s claim for a psychiatric injury allegedly arising from bullying, harassment and discrimination in

the workplace relating to his ethnicity which was alleged to have occurred on 14 November 2009. The

issue was whether an employer had condoned racial orientated jokes and banter in the workplace in

circumstances where it was reasonably foreseeable the injured worker would suffer psychiatric injury.

In this case, the injured worker was not accepted as a credible witness.

The Court found that multicultural workplaces did involve joking and banter with racist overtones contrary

to the employer‟s policies and procedures (which were only contained in an induction booklet). In these

circumstances, the Court was satisfied that the work system and in particular the response by

management when it was aware that such joking and banter was taking place amounted to a breach of

the duty of care that the employer owed.

50

[2013] QSC 198. 51

Per Boddice J.


However, notwithstanding the Court finding that the employer had breached the duty of care that it owed

to the injured worker, the Court was not satisfied that it was reasonably foreseeable that the injured

worker would suffer a psychiatric injury in circumstances where the injured worker himself was found to

be an active participant in the joking and banter. Further, the Court found that the injured worker had

never advised the employer that the joking and banter was putting him at risk of any psychiatric harm.

Further, the Court was not satisfied that the racial incident which occurred on 14 November 2009 was

different to anything that had previously occurred. There were also issues in this case with respect to

the nature of the psychiatric condition that was the subject of the claim. The injured worker alleged that

he had suffered post traumatic stress disorder as a result of the joking and banter that was the subject of

the claim. There was a contest in expert medical evidence as to whether the injured worker did in fact

suffer from a post traumatic stress disorder. The Court ultimately found that the injured worker did not

suffer from this disorder preferring the expert evidence of one psychiatrist over another in that the

diagnostic criteria for a post traumatic stress disorder had not been met in all of the factual

circumstances of this case. Much of the evidence discrediting this injured worker arose during the

course of the trial with respect to the injured worker‟s failure to disclose a history of fraud involving the

Australian Taxation Office.

In Brown v Maurice Blackburn Cashman, the Victorian Court of Appeal upheld the decision of a Victorian

County Court to reject a workplace bullying claim against an employer. In this case, the injured worker

was an employed solicitor. The solicitor was employed by Maurice Blackburn Cashman Lawyers. The

injured worker‟s central allegation was that after she returned from maternity leave she was

„systematically undermined, harassed and bullied by a fellow employed solicitor in a law firm‟.52 It was

alleged that this inappropriate behavior occurred despite the injured workers complaints and request for

intervention by management at the law firm. The injured worker alleged that the employer should be

vicariously liable for the acts of the co-worker.

At first instance, the Trial Judge assessed the injured worker‟s complaints in this way:

Whilst I accept that [Maurice Blackburn Cashman]‟s duty of care to its employees was informed by its

understanding of the potential link between work stress and the risk of psychiatric injury, [Maurice

Blackburn Cashman]‟s knowledge of Work Safe Victoria‟s Guidance Note on Prevention of Bullying and the

52

See Swan v Monash Law Book Co-Operative [2013] VSC 326.


managing partner‟s knowledge of Law Institute Journal Articles identifying an obligation on a legal practices

to protect employees from the risk of psychiatric injury in cases of perceived harassment, none of these

generalised background matters could be substituted for an examination of the facts in the case as a basis

for postulating a duty of care.53

At first instance during the trial, the Court found that there was no systematic harassment or repeated

unreasonable behavior on the evidence that was made available to it. Further, the Court of Appeal

rejected the attacks that were made on the Trial Judge‟s reasoning on these issues.

The Victorian Court of Appeal held this:

Insofar as it may be true that in a given case a series of inappropriate behaviours may collectively amount

to bullying, when individually they would not, the facts as found by his honour simply did not establish a

basis for such a case. The Appellant failed to prove materially inappropriate behaviours on the part of [the

employee]. At best she established instances of robust expression of frustration concerning work road

made to a departmental head. The Appellant did not prove „repeated unreasonable behaviour‟ directed

towards her which created a risk to health in accordance with a definition of bullying adopted for the

purposes of the case.54

In this case, the consequence was that the notional concept of „cumulative harassment‟ did not assist

the injured worker in establishing that the risk of psychiatric injury was foreseeable before she had made

any complaint of psychiatric distress to her employer. This finding was significant because the critical

task for the Court about whether or not the employer had breached the duty of care owed, was to identify

what a reasonable person‟s response (what a reasonable employer‟s response) was to the risk of injury

that befell this injured worker. The consequence of the Court finding that there was no risk of injury that

was reasonably foreseeable until the injured worker had made a complaint or warned that she was at

risk of psychiatric distress. The evidence in Maurice Blackburn Cashman‟s case was that until the

injured worker complained of the risk of psychiatric distress, there was nothing that the employer ought

to have done to have taken any remedial action in relation to the injured worker or any adverse

interaction she might have been suffering as a result of her relationship with co-workers. There was

53

[2013] VSCA 122 per Osbourne JA. 54

Above at [187] – [188].


evidence, and the Court found, that after the injured worker had made such a complaint the employer

responded reasonably and appropriately.

Mr Scott Falvey Principal McInnes Wilson Lawyers

Health & Medicine

Scott Falvey, Wilson Lawyers: Recovering Damages for Pure Psychiatric Injury in the Workplace