Qld Court of Appeal upholds decision to dismiss a claim for psychiatric injury suffered by an employee who was suspended on full pay during performance investigation

In brief: The Court of Appeal recently considered the foreseeability of psychiatric injury in Potter v Gympie Regional Council [2022] QCA 255, in a claim made by an employee who was subject to an investigation following performance complaints made by other employees

Background

The appellant, Ron Potter, was a manager at the Gympie Regional Council (respondent) in the Local Laws Branch. He had been employed with the respondent since 2008 and held the position of manager since 2014. Issues were raised in respect of the appellant's work performance following a staff survey in late 2013. 

On 21 July 2014, the appellant was suspended on full pay pending a formal investigation into allegations of misconduct. The investigation was completed in early August 2014 and excused the appellant of serious misconduct but identified lesser misconduct and poor management issues.

On 9 August 2014, the appellant provided a medical certificate to the respondent stating that he was unfit for duty. A further medical certificate identified that the appellant was suffering from workplace stress.

The appellant was not informed of the results of the investigation until 22 January 2015. He did not return to work and his employment was subsequently terminated. 

The appellant commenced a claim for damages for psychiatric injury in the Supreme Court of Queensland against the Council on the grounds that he should not have been suspended from his employment during the investigation. 

Brown J found: 

1. The respondent did not owe a duty of care to the appellant to prevent him from suffering psychiatric injury arising from its lawful direction in suspending his employment during the investigation.
2. Based on the evidence of witnesses in their dealings with the appellant prior to his suspension, it was not foreseeable the appellant would suffer psychiatric injury as a result of the suspension as the employer was not aware the appellant had any history of psychiatric injury or vulnerability (see Koehler v Cerebos (Australia) Ltd).
3. If a duty of care was owed, it was not breached by suspending the appellant from his employment as such action was reasonable and bona fide given the complaints regarding the appellant's performance.
4. Any breach in suspending the appellant's employment was not a necessary condition to causing the plaintiff's psychiatric injury because the complaints, investigation and findings made, would have led to the same result. 

The claim was dismissed at first instance and the Court of Appeal upheld the primary judge's findings. 

Implications for employers

This decision identifies that an employer will not be found liable for a psychiatric injury suffered by an employee if it exercises its rights under a contract of employment, including suspension of the employee's employment, to investigate the employee's performance of his or her role. 

However, employers must ensure that the performance management process is undertaken reasonably, having regard to the circumstances of the employee at the time.