Law news: compensation for psychiatric injury; NSW workplace deaths legislation

Cases

Law news: compensation for psychiatric injury; NSW workplace deaths legislation

Compensation claims based on psychiatric injury have been confined by a High Court ruling; and it appears that only ‘rogue employers’ face jail terms for workplace deaths under proposed NSW legislation.

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Compensation claims based on psychiatric injury have been confined by a High Court ruling; and it appears that only ‘rogue employers’ face jail terms for workplace deaths under proposed NSW legislation.

Psychiatric injury claims confined: High Court

The High Court has ruled that an employee, who found the workload of a position that she had voluntarily accepted excessive to the point that she suffered a disabling psychiatric illness, was not entitled to recover damages for negligence from her employer.

The High Court noted that it was particularly important to assess whether the occurrence of such an illness was foreseeable. If the employer was aware of the risk and it was therefore foreseeable, the employer may be liable. But in this case, the worker was fit and healthy and did not give any indication of any risk of psychiatric injury.

Background

Ms K was employed three days a week as a merchandising representative of the respondent (the employer). She could not perform the duties expected of her to her satisfaction. She repeatedly told management that changes had to be made. She said that the work expected of her had to be changed, or she should have more time in which to do it, or she should have help to do it. No changes were made. Five months after starting work Ms K became sick. At first a physical disorder was suspected but further consideration revealed that she was suffering a psychiatric illness. Her work was a cause of that illness.

The issue before the court was: Did the employer breach its duty of care to provide Ms K with a safe system of work? The Full Court of the WA Supreme Court had found fro the employer.

High Court dismisses appeal

All members of the High Court dismissed the appeal. Justices McHugh, Gummow, Hayne and Heydon delivered a joint judgment and Justice Ian Callinan delivered a separate judgment. The joint judgment concluded:

'… to begin the inquiry by focusing only upon questions of breach of duty invites error. It invites error because the assumption that is made about the content of the duty of care may fail to take fundamental aspects of the relationship between the parties into account.

The Full Court [WA Sup Ct] was right to conclude that a reasonable person in the position of the employer would not have foreseen the risk of psychiatric injury to the appellant. Because appellant did not prove that the employer ought reasonably to have foreseen that she was at risk of suffering psychiatric injury as a result of performing her duties at work, her claim in negligence should have failed at trial.

There are two reasons why the Full Court was right to reach the conclusion it did. First, the appellant agreed to perform the duties which were a cause of her injury. Secondly, the employer had no reason to suspect that the appellant was at risk of psychiatric injury. It may be right to say that it is now a matter of general knowledge that some recognisable psychiatric illnesses may be triggered by stress.'

Koehler v Cerebos (Australia) Ltd [2005] HCA 15 (6 April 2005)

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Only ‘rogue employers’ face jail terms for workplace deaths - Minister

Only the ‘very small number’ of rogue employers whose complete disregard of basic safety requirements results in the death of an employee will face prosecutions that could result in jail sentences under the forthcoming NSW Workplace Fatalities Act.

That became clear following a statement by the NSW Minister for Commerce, John Della Bosca, that consultation with peak union and employer bodies had produced constructive proposals to modify the draft Workplace Fatalities Bill.

‘During months of consultation I have not yet spoken to an employer who has argued that rogue employers who cause the death of vulnerable workers should be not be subject to the full force of the law,’ Della Bosca said.

‘The Government, business and unions are in agreement that we want legislation to target the very small number of rogues whose complete disregard of basic safety requirements results in the death of an employee.

The draft consultation Bill increases existing jail terms to five years and allows a Court to impose fines of up to $165,000 for an individual and $1.65million for a corporation (second offender).

Questions still outstanding

WorkplaceInfo put the following questions to Della Bosca’s office on what changes were being contemplated for the draft Bill:

  • Will the new Bill limit prosecutions where penalties include jail terms to employers who act ‘recklessly’ or ‘negligently’ (or any similar form of words?

  • How broad will the defences be to charges that involved jail sentences?

  • Will employers have right of appeal if convicted and sentenced to a jail term?

  • Will unions be able to initiate prosecutions as they now can? Including where there are jail sentences?

  • Who will have the right to bring prosecution where the penalty includes jail sentences?

  • Will there be a further round of consultations with unions and employer groups when the Bill is revealed?

  • When do you expect the legislation will be passed?

  • What are the kinds of people (managers, directors etc) to whom the jail sentence provisions would apply?

A spokesman for the Minister said they were unable to answer the questions as consultations with unions and employers were continuing.

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