Legal experts examine employers’ duty of care, and look at a recent High Court decision that would have changed the lay of the land.

It is uncontroversial to say that employers have a duty to provide a safe system of work to their employees. Trapdoors over spike-filled pits in the office are generally frowned upon, and tripwires triggering flamethrowers are forbidden. But how far does this duty go? Are employers required to ensure that their employees aren’t offended when being performance managed? Do employees owe any responsibility for employees’ mental health during a workplace investigation?

It has been accepted since 2002 that an employer’s duty of care does not extend to disciplinary procedures which lead to termination of employment. Back in 2002, the NSW Court of Appeal found that Peter Paige, a school principal, who had allegedly suffered psychiatric harm as a result of the manner in which the Department of Education had terminated his employment, was not able to recover damages from the Department.

The Court’s reasoning was that to impose a duty of care to conduct disciplinary procedures in a manner which avoids psychiatric harm would be inconsistent with other pre-existing statutory schemes, such as employees’ ability to make unfair dismissal claims. It would also prevent employers from being able to carry out investigations and being able to make termination decisions in an efficient manner.

Now, obviously, this decision was not a green light for employers to go out and try to inflict as much psychological damage on their employees as possible. But it did serve as some comfort that the law would not be imposing a further restriction on how employers can manage their employment issues.

(For on what obligation employers have when it comes to resilience, read our article.)

The recent decision

Fast forward to 2009. Toni Govier, an employee of UnitingCare Community, is the alleged victim of an attack and beating by a co-worker. Govier flees by car and is hospitalised. The very next day, UnitingCare sends her a letter directing her to attend an urgent investigation interview, and stands her down on full pay.

Govier is unable to attend due to being too ill, and two weeks later she receives a further letter claiming that she refused to attend the interview, and that there have been preliminary findings that she had engaged in violent and inappropriate behaviour. Govier was also told that her employment would be terminated within five days unless she could show cause why her employment should not be terminated.

Govier subsequently started legal proceedings, claiming that the timing, manner and content of UnitingCare’s letters caused her to suffer a chronic post-traumatic stress disorder and a major depressive order. She was unsuccessful in both Queensland’s District Court and Court of Appeal, as both courts rejected her submissions that UnitingCare owed her a duty of care beyond the conduct of the tasks for which she was employed.

In other words, there was no duty to provide a safe system of work in UnitingCare’s investigation and decision making processes, consistent with the 2002 Paige case.

Govier sought and was granted special leave to appeal to the High Court, hoping that it would overrule or at least narrow the impact of the Paige case, which would enable her to recover damages arising from UnitingCare’s handling of the investigation.

On 13 April 2018, the High Court began hearing Govier’s claim and… 46 minutes later dismissed her application with costs against her. Why? Govier had failed to put forward her employment agreement as evidence, which the High Court found was central to the issues in question, namely whether or not the claimed duty of care might interact with both the contractual obligations between an employer and employee.

The lay of the land

So, for now, the rule from the Paige case remains, until another case comes before the High Court to determine the issue once and (more or less) for all. But what does this mean for employers?

1. Until the Paige case is overruled or narrowed, employers will not be held liable for damages arising from the manner in which they conduct investigations or termination decisions. However, this does not mean that employers should not be mindful of their employees’ mental health during disciplinary proceedings!
2. Employers should consider including provisions in their employment agreements requiring employees to cooperate and participate in any workplace investigations and disciplinary proceedings which they are involved in. This will create an express contractual obligation for employees to assist employers in carrying out their disciplinary processes.
3. Employers should review their disciplinary policies and procedures to ensure they are up to date and that their employees are afforded procedural fairness at all times. Also, staff carrying our disciplinary investigations and making termination decisions should be trained to be familiar with their employer’s disciplinary policies and procedures.

Aaron Goonrey is a Partner and Luke Scandrett is a Lawyer in Lander & Rogers’ Workplace Relations & Safety practice. Aaron can be contacted at agoonrey@landers.com.au