Hefty psychological injury bill a warning to employers

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Proactively managing mental health risks in the workplace critical

A recent $435,584 injury damages case, in which a Queensland employer was found vicariously liable for a manager’s harmful treatment of a subordinate, demonstrates the importance of proactively managing mental health risks in the workplace.

In this particular case an administrative assistant for an aged care facility claimed she was forced to resign due to depression and anxiety brought about by the bullying conduct of her new manager and an excessive workload. She alleged the manager consistently belittled her in front of others including saying she “had never met anyone so stupid” and telling her to “get over it” when she complained about working extra hours.

The Court of Appeal ultimately ruled the employer had breached its duty of because the visible deterioration in the employee’s psychological state under her new manager had made the risk of psychological injury “reasonably foreseeable”.

Justice Philip McMurdo added: “Reasonable care required [the manager] not behave towards the appellant in a harassing and belittling fashion.”

In referring to “the culmination of a multiple stressors over time” the court highlighted the need for employers to be vigilant in monitoring the mental health of employees and intervening to minimise workplace stresses while still respecting privacy.

In this case the employee’s shaky and teary demeanour, in contrast with her bright and bubbly demeanour before the commencement of the new manager, was cited as physical evidence of deteriorating health. Employers are also encouraged to pay close attention to medical certificates citing stress or bullying, prolonged or frequent absences, and comments made by employees about their health being affected by work.

Besides the risk of a claim for psychological injury, overlooking employee distress leaves employers open to a subsequent claim for workers’ compensation as well as an application for a stop-bullying order. Not to mention the damage that can be done to your reputation as an employer of choice.

Source: Victorian Chamber of Commerce and Industry

Are you confused about your rights and responsibilities as an employer?  Not knowing could cost you thousands. 

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