2 min read

When are you liable for not picking up signs an employee has poor mental health?

Mental health of employees has obviously become a significant issue for human resource management. The increased awareness of the issue (e.g. R U OK? Day) is causing employers to consider whether they need to train their managers to identify signs that an employee’s mental health is poor and to respond appropriately.

The potential liability for failure to act in response to evident signs of an employee's poor mental health was underscored in the High Court decision in Kozarov v Victoria (2022). The decision concerned a solicitor working on prosecuting serious sexual offenders who developed serious psychiatric injuries due to vicarious trauma experienced at work. The High Court unanimously ruled the employer was on notice of the signs that the employee’s work was exposing her to serious psychiatric injury. The employer therefore had a duty to take proactive steps to reduce the risk of that injury.

The Court acknowledged the employer had implemented an Employee Assistance Program but found that it was insufficient to mitigate the risks associated with the nature and intensity of the work. The Court suggested that the employer should have taken more proactive steps, such as rotating the employee out of the psychologically harmful work environment.

As a general proposition, an employer will not ordinarily breach any legal duty by not training managers to identify when workers are presenting to work with poor mental health. However, it will certainly reduce the employer’s legal exposure in the areas set out below to provide this training:

  • Negligence: Under the common law of negligence, an employer may be held liable for a worker's psychiatric injury if evident signs of risk are present, and the employer's response is inadequate. The case of Kozarov v Victoria and the authorities considered by the High Court affirm this principle. However, mere complaints of stress or overwork may not trigger this liability. Instead, liability arises when a worker displays aberrant behaviour or other symptoms that should reasonably alert an employer to their breaking point. Prompt action and appropriate measures, guided by training, can significantly reduce the risk of negligence claims.
  • Work health and safety legislation: Employers have a positive duty under work health and safety laws to provide a safe working environment, including addressing psychosocial hazards. When an employee shows signs of poor mental health, it is essential to consider if workplace factors contribute to their condition, such as workplace bullying or poor job design. Furthermore, an unwell employee can pose a hazard to others, making it essential for managers to recognise mental illness and take steps to eliminate or control workplace hazards. By recognising mental illness and taking proactive steps to eliminate or control workplace hazards, employers can fulfil their duty to provide a safe working environment.
  • Bullying, workers compensation and other claims: If a worker is showing poor mental health because of their experience with other employees or a system of work, prompt identification of this will allow appropriate preventative action and possibly reduce the risk of the impacted employee making a claim about their situation, e.g. workplace bullying, workers’ compensation claims, forced dismissal. By identifying workplace experiences that contribute to poor mental health, employers can mitigate the risk of legal consequences while promoting a healthy work environment.
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