2 min read

The effects of workplace bullying can outlast conduct

The Case

Ward v Allianz Australia Insurance Services (2019)

Mr Ward worked for Allianz as an accounts manager. Mr Ward reported to Mr Smith, the State Manager. Mr Smith had an aggressive management style, which involved yelling at Mr Ward, slapping him across the back of his head and shoulder-charging him.

In January 2004, another employee complained about Mr Smith’s bullying behaviour and left Allianz. Mr Ward was interviewed and reported Mr Smith’s aggression towards him. Mr Smith was then transferred away and Mr Ward no longer worked directly with him. However, Mr Ward had ongoing ill health and took sick leave at various times. By August 2010, Mr Ward was struggling with his work and commenced leave in December 2010, never returning to his position.

Mr Ward claimed common law damages in the District Court under the Workers Compensation Act 1987 (NSW) for a range of psychiatric conditions, caused by the bullying and harassment by Mr Smith. Allianz conceded that Mr Ward’s condition was to some extent caused by Mr Smith’s conduct.

The Verdict

The District Court was tasked with considering whether the bullying by Mr Smith caused Mr Ward’s injuries and if so, whether Allianz was vicariously liable for Mr Smith’s behaviour.

The District Court held:

  • Mr Ward’s psychiatric injury was an expected and likely consequence of Mr Smith’s conduct;
  • Mr Smith was recklessly indifferent to this consequence; and
  • Mr Ward’s injuries were caused by Mr Smith in the position of authority vested in him by Allianz and hence Allianz was vicariously liable to Mr Ward for Mr Smith’s conduct.

The District Court awarded Mr Ward the sum of $1,394,421.91 plus interest and costs.

The Lessons

Employers have both a common law and statutory duty to protect the health, welfare and safety of employees. Not only should employers take action when instances of bullying are reported, but be proactive in policing compliance. As this case shows, years after the bullying of an employee ceases, the consequences can continue, exposing the employee to ongoing ill health and the employer to the risk of liability for many years.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.

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