Psychiatric Injury Claims and an Employer’s Liability

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Table of Contents

• Duty of Care 
• The Three Facets of a Psychiatric Injury Claim
• Contracted Tasks
• Key Takeaways
• Frequently Asked Questions

Work stress is unavoidable, and we have all experienced it at one point or another. Unrealistic workloads, high expectations, strict deadlines, long hours and socio-personal issues with fellow colleagues can all contribute to work-related stress. Unsurprisingly, stress claims, also known as psychiatric injury claims, continue to gain prevalence. However, just because a worker suffers a psychiatric injury does not automatically make you liable for the injury as an employer. This article will discuss the extent of your liability for psychiatric injury claims.

Duty of Care 

Employers owe a duty of care to their employees to take reasonable care of their health and safety. The nature of this duty of care depends on the specific circumstances of the workplace. 

For example, it might be general knowledge that stress can bring about some psychiatric injuries and workplaces can be stressful. However, where an employee agrees to perform the duties they were required to perform under their contract of employment, the law may not impose an overarching duty on all employers to recognise that their employees are at risk of psychiatric injury from stress at work.

Additionally, an employee must demonstrate that the workplace conditions caused their psychiatric injury. 

Nevertheless, there are three facets of a psychiatric injury claim you should consider.

The Three Facets of a Psychiatric Injury Claim

An employee must fulfil three conditions before they can make a psychiatric injury claim against you.

1. A Recognised Psychiatric Illness

The employee must at the outset show that they have sustained a “recognised psychiatric illness”. This refers to diagnosable conditions rather than non-specific symptoms. In this regard, it is not enough that the employee merely feels distressed, anxious or overwhelmed. The employee must obtain a medical diagnosis rather than list symptoms, such as generalised anxiety disorder or depression.

An employee’s predisposition to psychiatric illness does not dissolve you of your liability to an employee’s psychiatric injury. The law requires you to take your employees as you find them. In this regard, employers must be vigilant and take special care to avoid and alleviate precursors to psychiatric injury. One recognised precursors include workplace bullying and harassment. Bullying and harassment may include; 

• intimidation tactics;
• verbal abuse or threats;
• ridicule;
• exclusion; and  
• unjustifiable criticism. 

As a general note, all employers are under a contractual duty to provide their workers with a safe working environment.

2. Reasonable Foreseeability

The second hurdle that an employee must overcome before effectively mounting a psychiatric injury claim is showing that the type of injury they sustained was reasonably foreseeable. To put it another way, it must have been reasonably apparent that the employee would eventually fall victim to the injury as a result of their work routine or another aspect of their work life. 

What is reasonably foreseeable will depend on the nature and environment of the work activity. The hurdle can be a difficult one to overcome and will ultimately require the employee to establish that: 

1. the worker suffered or was in the presence of a sudden and traumatic work event; and 
2. the employee displayed visible signs of trauma over a defined period which reasonably illustrated that the worker was succumbing to a psychiatric illness.

Additionally, an employer’s duty exists only if the risk of psychiatric injury was reasonably foreseeable in a particular set of circumstances. That is to say if it was reasonably foreseeable that the particular employee (as opposed to your entire workforce) would suffer harm. 

3. Failure To Take Reasonable Steps To Prevent Injury 

The last limb of the test requires the employee to show that you failed to take reasonable steps to prevent or alleviate the risk of them acquiring a psychiatric illness. Again, this will be assessed against the nature of the work activities which collectively make up the employee’s role. In a sense, this requirement imposes a burden on you to look into the future and take preventative measures to minimise the risk of injury.

Contracted Tasks

For example, a recent High Court case saw a merchandising representative bring a psychiatric injury claim against her employer. The employee claimed that her employer imposed an excessive workload despite repeated complaints that she could not cope. The Court found that the employer had not breached its duty of care to prevent psychiatric injury. This was because the employee had agreed to perform the duties she was required to perform under her contract of employment. 

In saying that, the exception is not absolute. You may be held liable for a psychiatric injury sustained as a direct result of an employee performing contracted activities where:

• the employer varies the duties to be performed after the contract of employment has been executed; or
• terms are implied into the employment relationship under a legislative enactment or the common law.

In any event, you should seek legal advice if you are facing a claim for psychiatric injury. 

Key Takeaways

In today’s hectic work environment, it is important that both employers and employees are aware of their rights, responsibilities and courses of action when something goes wrong. If a psychiatric illness is affecting you or someone that works for you, the best thing to do is try to address the cause of the problem and alleviate the damage sooner rather than later. As an employer, it is important to recognise that you owe a duty of care to your employees to take reasonable care of their health and safety. However, whether the scope of this duty extends to taking reasonable care to avoid psychiatric injury depends on you and your employee’s specific obligations in the workplace. 

If you want to find out more about psychiatric injury claims or your liability as an employer, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions