Mental Health: Employer Liability

Mental Health at Work – Employer Liability for Psychiatric Injury

Workplaces can cause stress and sometimes when that stress is extensive, it can lead to mental health issues, including depression and anxiety.

Although Australian employers have a duty of care towards their employees, the law currently limits the liability of employers when their employees sustain psychological injury in the course of their work.

If you’re facing significant stress at work and are worried about the long term impacts on your mental health, you should read the following post to give you a broad idea about what steps you should take to notify your employer.

Duty of care: reasonably foreseeable risk of psychological injury

Australian courts recognise that employers have a duty of care to take reasonable steps to avoid or reduce a foreseeable risk of psychological injury. Courts have interpreted this principle narrowly, reducing the number of cases where employees could get compensation from their employer.

In a significant High Court case in 2005, an employee tried to get compensation from her employer for psychological injury as a result of overwork. Her full time position in the company was made redundant and she was rehired part time. After she signed her new employment contract, she realised that her workload was much more than she could achieve. She contacted her employer on several occasions notifying them that the workload was too much along with suggestions as to how to reduce it. The employer didn’t reduce the employee’s workload.

The High Court decided that this employee’s psychological injury wasn’t reasonably foreseeable. In their decision, they emphasised the following:

  • Although the employer knew the employee was overworked, the employee never mentioned or provided evidence that she was suffering psychological deterioration or illness.
  • There were no other circumstances to notify the employer that the employee was becoming unwell, such as if she had taken extensive periods of sick leave. The employee continued to do her work.
  • The employee knew what the workload would be before she signed the contract and she wasn’t being asked to do anything that wasn’t in the contract.

The High Court was also careful to distinguish “mere stress” from psychological injury. Stress alone is not enough to make employers liable.

Workplace bullying and your mental health

It is possible that psychological injury resulting from workplace bullying and harassment would more easily meet the “reasonably foreseeable” requirement. No employee consents to this behaviour in his or her contract and it is widely recognised that bullying and harassment can lead to psychological injury.

Employers who don’t address bullying and harassment claims are likely to be vicariously liable for the actions of their employees due to a failure to provide a safe workplace. This means that if one employee bullies another, the employer could be liable to the bullied employee.

However, even in cases of bullying, courts have been slow to find employers liable. Courts tend to consider the seriousness of the alleged bullying or harassment and the extent of the evidence of psychological illness as opposed to “psychological disturbance”. Courts will also consider any attempts by the employer to resolve a situation such as through mediation.

Making sure your employer takes responsibility for your mental health

Unfortunately, it appears that in order to meet the “reasonably foreseeable” test, an employee must present evidence to their employer of their psychological injury. This could be in the form of a medical certificate stating that their mental health is deteriorating. It is possible that extensive absences from work attributed to mental health issues could also assist in meeting the test.

Many commentators have pointed out that this standard is contradictory. This is because once an employee provides medical evidence of psychological injury, the injury isn’t “foreseeable”, it has already happened. Additionally, employees are in a difficult position if they don’t themselves realise the impacts of their workplace on their mental health until it’s too late.

As you can see, getting compensation from employers for psychological injury is very difficult in Australia. So if you are worried about your mental health due to your workplace environment or responsibilities, along with seeking medical advice, you should contact an employment lawyer to make sure you’re treated fairly by your workplace and that you get the support and compensation you need.

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