Management hopes dashed: no psych injury compo

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Management hopes dashed: no psych injury compo

The Queensland Court of Appeal has found an employer could not reasonably have foreseen that twice withdrawing an employee from a training program would cause him to suffer psychological injury. The decision overturned an order for $585,152 in damages.

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The Queensland Court of Appeal has found an employer could not reasonably have foreseen that twice withdrawing an employee from a training program would cause him to suffer psychological injury. The decision overturned an order that the employer pay the man $585,152 in damages.

The primary judge had not identified a breach of the employer’s duty of care.

[Full text of this case: Woolworths Limited v P [2015] QCA 207 (27 October 2015)]

Tough entry requirements for management training program


A man employed from May 2008 as an order selector, forklift operator and truck unloader applied towards the end of that year to join the employer’s management training program. The selection process was thorough and included psychological testing, interviews with managers and a research project to enable applicants to make a presentation to a panel.

The forklift operator was one of the few who was offered a place in the program. However, in July 2009, about a week before the course was to start, the HR manager withdrew the offer because he had been absent from work almost 489 hours over the past 12 months. Employees were entitled to 76 hours personal leave per year.

The following year, the forklift operator was again offered a place in the management training program. When he turned up on 5 July 2010 to register, he was again removed from the program because of excessive absenteeism. He was upset, went home, and later sought medical attention. He was diagnosed with psychiatric illness, namely adjustment disorder with depressed mood, dissociative disorder and substance abuse disorder, all attributed to circumstances arising from work.

District Court finds for worker


The forklift operator brought an action against his employer in the District Court of Queensland, claiming its unreasonable management action had caused his psychiatric injury. The unreasonable management action had included:

  • allowing him to progress though the selection process and then excluding him at short notice “due to well known issues”
  • using issues from the past to deny him entry to the course
  • taking these actions knowing that he had been vulnerable to psychological behaviour and/or injury.

The evidence established that the forklift operator, born in 1977, had had a troubled life. He had suffered abuse as a child, become a drug addict as a teenager and committed drug offences, including break-ins. He had probably been using amphetamines as recently as April 2007.

When he was 26, his young son, not yet one year old, had died, which had brought on depression requiring psychiatric care from time to time. He had spent about two months in prison in 2008 after driving while disqualified.

The District Court found in the forklift operator’s favour and ordered the employer to pay damages amounting to $585,152 because of its breach of duty of care.

Appeal finds no breach of duty


The employer appealed to the Qld Court of Appeal, submitting that it had not breached its duty of care to the forklift operator and that the risk of psychiatric injury had not been reasonably foreseeable.

The court noted the primary judge had not identified any act or omission that constituted a breach of duty of care by the employer. Employers generally recognised that employees may be exposed to stress at work, but it was not clear how the employer in this case could have foreseen the risk of psychiatric injury to the forklift operator.

When applying for the job in April 2008, the forklift operator had answered “no” to the following two questions on the application form:

  • “Are you on any medication at the moment, or recovering from illness?”
  • “Are there any factors or circumstances, either physical or emotional, which you feel may impact negatively on your performance?”

The purpose of the employer’s management training program had been to identify future leaders, and it had specified certain criteria that applicants had to meet. The forklift operator had represented himself as fit for a management role, both physically and emotionally. Nothing had alerted the employer to any psychological vulnerability.

The letter offering the successful applicants a place in the program had specified that they were not guaranteed a leadership position upon completing the course and that, if failing to fulfil any requirements of the course, they would go back to their previous positions in the company. Applicants were on notice they had to be able to deal with disappointment.

The employer’s duty of care had not extended to an obligation not to withdraw the forklift operator from the training course.

Foreseeability


The court confirmed the level of absenteeism that prevented the forklift operator from participating in the course in 2010 had not been carried over from 2009. For the past 12 months he had again exceeded the permitted level, a fact he should have been aware of himself.

Although the employer had twice removed him from the training program for not meeting the basic criteria relating to attendance, it had not been reasonably foreseeable this would create a risk of causing him mental anguish amounting to significant psychiatric injury.

The forklift operator claimed he had told the employer’s logistics manager in February 2009, in connection with the first application to the training course, that he had been a drug addict, lost a child and suffered depression, adding that he had worked his way through it all and cleaned himself up. This was supposed to have alerted the employer to the vulnerability of this applicant.

However, the logistics manager had no memory or record of such a conversation. If he had been aware of it, rather than taking it into account in the forklift operator’s favour, he might well have decided that it would not have made the forklift operator a suitable candidate for a management position.

The court accepted that, at the time of the forklift operator’s second rejection, the employer had no reliable evidence he might have been psychologically vulnerable.

Credibility


There were further instances in court that cast doubt on the forklift operator’s credability, such as recollections that were shown to be inaccurate when compared with other contemporaneous notes or statements previously signed by him, examples of situations where he unrealistically painted the employer in an unfavourable light and himself in a good light, and conflicting histories that he had given to medical practitioners.

Conclusion


The appellate court confirmed that, in addition to the lack of foreseeability of injury, there were no reliable causal links between the employer’s actions and the forklift operator’s psychiatric injury.

The court unanimously allowed the employer’s appeal and set aside the earlier District Court judgment.

The bottom line: The actual duty of care in issue will be analysed by courts in hearing common law damages claims. In this case the finding was that the duty did not extend to cover the injury suffered by the worker.

Woolworths Limited v P [2015] QCA 207 (27 October 2015)

See also: Woolies' WHS duty led to psych test and dismissal 

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