Local government to pay over one million dollars in damages after Supreme Court of Queensland decides workers' compensation claim for psychiatric injury in favour of former payroll supervisor

In brief

The case of Ackers v Cairns Regional Council [2021] QSC 342 concerned a workers' compensation claim to the Supreme Court of Queensland (Court) for psychological injury suffered while the plaintiff was employed as the supervisor in the payroll unit of the Cairns Regional Council (Council). 

The plaintiff suffered from a long-standing depressive illness which worsened in connection with a number of events that occurred during the year the plaintiff worked for the Council. In September 2015, the plaintiff was stood down for medical reasons and has not since returned to work. The plaintiff alleged that the Council breached its duty to take reasonable care to avoid unnecessarily exposing the plaintiff to a foreseeable risk of psychiatric injury in three main ways: 

1. the Council's investigation of a union complaint against the plaintiff; 

2. the plaintiff's allegedly excessive hours of work; and 

3. the Council's imposition of a Performance Improvement Action Plan (PIAP) on the plaintiff. 

The Court found that the Council's actions with respect to the union complaint and the plaintiff's hours of work did not constitute a breach. The Court found, however, that the Council did breach its duty of care when it unreasonably targeted the plaintiff with a PIAP in circumstances where the plaintiff was not a person of normal fortitude and the Council had corporate knowledge that the plaintiff had been displaying signs of psychological distress. 

Court finds that the Council owed the plaintiff a greater degree of care 

The Court considered the scope of the duty of care owed to the plaintiff in this case and observed at [8] that "[a] greater degree of care may be required where the employer imposes a workload upon an employee which, by its nature, will be abnormally stressful or where an employee is exhibiting signs of psychological distress." 

The Court found that there were a number of stressors which would have indicated to a reasonable person in the Council's position that the plaintiff required a greater degree of care, including the following:

• The exceptional stress that the plaintiff and the plaintiff's team were under as a result of an ongoing staff shortage in the Council's payroll unit. 

• The plaintiff worked additional hours to accommodate the increased workload, including two overnight shifts. 

• The plaintiff was emotionally impacted by a union complaint made against the plaintiff. 

• On 9 July 2015, the plaintiff disclosed to the plaintiff's supervisor that the plaintiff suffered depression and was taking anti-depressant medication. 

• The plaintiff was observed on multiple occasions to be withdrawn and displaying obvious signs of psychological distress such as shaking and crying. 

Court finds that the Council did not breach its duty of care with respect to investigating a union complaint against the plaintiff or the plaintiff's "excessive" work hours 

In May 2015, the Council received two letters from the Services Union complaining about serious workplace health and safety concerns in the payroll unit and specifically, the behaviour of the plaintiff. After conducting an investigation, the relevant Council officers advised the plaintiff that three complaints against the plaintiff had been substantiated and issued the plaintiff with a written warning. 

The plaintiff alleged that the Council had breached its duty by not investigating the complaints in a manner consistent with its usual processes or in a way that affords employees natural justice and procedural fairness. The Court found that while the Council did owe the plaintiff a duty in connection with its handling of the union complaint, there was no breach of that duty as proper process was followed. 

The Court also considered whether there had been a breach with respect to the quantity of hours that the plaintiff worked. This quantity was contested and the Court found that the plaintiff did work a substantial additional amount of hours for the period of 25 March 2015 to 30 June 2015, which averaged at 12 hours a week outside of ordinary working hours. 

Nevertheless, the Court did not consider that the volume of extra working hours was enough to, in and of itself, cause psychiatric injury to a person of normal fortitude. 

Ultimately, the Court concluded that the real significance of the Council's handling of the union complaint and the plaintiff's additional working hours was the Council's knowledge of the emotional impact those circumstances had on the plaintiff. 

Court finds that the Council breached its duty of care by imposing a PIAP on the plaintiff in circumstances where it was reasonably foreseeable that the imposition would cause the plaintiff psychiatric harm

The plaintiff alleged that one of the plaintiff's supervisors began targeting the plaintiff with the imposition of a PIAP after the discovery of a number of errors in the payroll unit, only some of which were made by the plaintiff personally. 

The Council advanced an argument to the effect that liability in negligence for a breach of the duty of care to avoid foreseeable risk of psychiatric injury is incompatible with the existence of the right to require competent job performance. The Court rejected this argument, finding that an employer can be liable for a breach of its duty of care to avoid a foreseeable risk of injury when the breach involves a purported correction of job performance which is carried out in bad faith or contrary to the employer's own processes and procedures. 

The Court strongly disapproved of the Council's decision to personally hold the plaintiff responsible for the payroll unit's inadequate performance when the most obvious likely cause was its sustained inadequate staffing. The Court considered that the imposition of the PIAP, therefore, proceeded on a flawed and unfair premise and did not conform with the Council's administrative requirements. 

The Court found that the Council had breached its duty by giving no consideration to the plaintiff's psychiatric state in deciding to place the plaintiff on a PIAP when it had accumulated corporate knowledge of the pressures the plaintiff had been under as a result of the understaffing and the signs which made the risk of psychiatric injury foreseeable. A reasonable person in the position of the Council would have avoided the pursuit of the PIAP in the first place or intervened to stop the pursuit of the PIAP. 

Court finds that the Council's breach caused the plaintiff to suffer psychiatric injury 

The Court applied the statutory test for causation from section 305D of the Workers' Compensation and Rehabilitation Act 2003 (Qld) and found "…but for Council's breaches of its duty of care in connection with the imposition and pursuit of the Performance Improvement Action Plan, it is unlikely [the plaintiff] would have suffered [the] psychiatric injury. Those breaches were a necessary condition of the occurrence of the injury and it is appropriate the scope of Council's liability should extend to the injury so caused." (at [402]). 

Conclusion

The Court ordered judgment for the plaintiff in the sum of $1,099,132.69 and set a date to hear from the parties as to costs.