Employer’s failure to act on specific and known risk of psychiatric harm leads to liability

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This article was written by Bobbi Murphy.

In a decision handed down in February 2017, Wearne v State of Victoria, the Supreme Court of Victoria has highlighted that employers must respond pro-actively where they are aware of a specific risk of harm to an employee.

The plaintiff, a youth justice case manager at the Department of Health, suffered a breakdown after more than 12 months of a deteriorating relationship with her immediate manager. The Court found that the manager's conduct was not sufficiently repetitive to constitute bullying, but that the Department had long been aware the relationship was causing the plaintiff extreme stress and she was at risk of psychiatric harm. In this context, its failure to address the situation was negligent, and the plaintiff was awarded a total of $625,345 for pecuniary loss and pain and suffering.

Implications for employers

The case highlights the need for employers to respond promptly to known risks, and the need for robust processes for handling conflicts and guiding managers. Specifically:

  • investigations matter – the Court found that a responsible employer would have undertaken a formal investigation into the situation;
  • risk mitigation includes training and guidance for managers – it was clear that manager's management style was ineffective and causing anxiety to the plaintiff and the Department should have provided her with training or direction to ensure appropriate handling of the situation; and
  • employers must have appropriate policies for handling bullying and interpersonal conflicts, and should consider formal counselling where necessary.


The plaintiff was employed by the Department as a youth justice case manager. She claimed damages for pain and suffering and pecuniary loss for a psychiatric injury sustained in the course of her employment between approximately February 2007 and 7 November 2008, when she suffered a breakdown and did not return to work.

She alleged that the Department exposed her to bullying and harassment on the part of her immediate manager, Ms Skerry, which exacerbated her pre-existing chronic adjustment disorder and depression. The plaintiff also struggled to adjust to changes occurring in the Department at the relevant time, notably an increased focus on office-based work and report writing. She began having panic attacks, problems with memory and concentration, and depleted confidence. She was not moved despite alerting senior management and asking to be moved in May 2007 and again in April 2008.

The plaintiff relied on numerous incidents that she alleged amounted to bullying, which included:

  • excessive and unreasonable criticism, including micro-management of her work performance;
  • providing her with inconsistent expectations and instructions on how she was to carry out her duties;
  • exercising managerial functions in a way that was inappropriate and unreasonable;
  • providing feedback in a manner and/or location that was inappropriate and embarrassed or humiliated her;
  • isolating her from the rest of the team by not passing on social or professional news; and
  • failing to assist her by providing documents and processes to help reach work targets and goals.


The Court found that Ms Skerry's behaviour created a risk to the mental health of the plaintiff, and some incidents between them could be objectively regarded as having a tendency to cause the plaintiff hurt, humiliation, anxiety and stress. However, the Court found that the allegation of bullying was not made out, since most of these incidents also involved valid directions, instructions and supervision. While Ms Skerry was "at times overly harsh and insensitive", the behaviour was not sufficiently repetitive to constitute bullying, and she did not set out deliberately to demean, belittle or harass the plaintiff.

On the contrary, the Court found that the Department had breached its duty of care with respect to the plaintiff by exposing her unnecessarily to risk of injury. Four managers in the Department knew of and understood in general terms the plaintiff's psychiatric vulnerability in 2007, and at least two also knew this vulnerability was being strained by her deteriorating relationship with Ms Skerry. All three of her direct supervisors were put on notice by September 2008 that she was "extremely vulnerable" to suffering a mental breakdown. However, the Court found that while these managers at times gave lip service to their concern with her mental state, it carried little weight in their actual decisions or deliberations.

The Court found that incidents in the lead-up to the plaintiff's breakdown could and should have been avoided. The Department had a duty of care to ameliorate the clear risk of psychiatric injury by taking steps including but not limited to:

  • moving the plaintiff to the supervision of a different team leader;
  • developing and implementing an appropriate policy for receiving and appropriately handling complaints of bullying and serious interpersonal conflict;
  • finding a suitable alternative position for the plaintiff that avoided the stressors affecting her;
  • changing the plaintiff's working conditions;
  • adopting more pro-active solutions in respect of educating supervisors with the necessary skills to appropriately manage persons such as the plaintiff; and
  • adopting more pro-active solutions including counselling, training and professional development to assist the plaintiff with work place change, report writing, acceptance of feedback and managing work stress.

After appropriate deductions, the plaintiff was awarded a total of $625,345, being $210,000 for pain and suffering and $415,345 for pecuniary loss.

Wearne v State of Victoria [2017] VSC 25

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