In the recent decision of Eaton v TriCare (Country) Pty Ltd [2016] QCA 139 (3 June 2016), the Queensland Court of Appeal has confirmed that an employer was vicariously liable for the actions of its manager who bullied and harassed an employee.
Background
From June 2007 to March 2010, Ms Eaton was employed by TriCare (Country) Pty Ltd (TriCare) as an administration assistant at TriCare’s nursing home at Pt Vernon, Qld.
Ms Eaton reported directly to the manager during 2009 and 2010. Ms Eaton gave evidence that during this time, the manager adopted an authoritarian approach towards her and was often offensive and intimidating. Ms Eaton’s complaints against the manager included that the manager:
Ms Eaton resigned shortly after the 2010 incident. She claimed that she had developed a psychiatric illness, depression and anxiety as a result of the abusive and belittling action of the manager and the excessive hours she was required to work.
Appeal Court’s decision
Ms Eaton’s claim for compensation was dismissed at first instance but that decision was overturned by the Appeal Court.
The Appeal Court stated that it was without argument that Tricare owed a non-delegable duty of care to its employees to take reasonable care to avoid exposing them to unnecessary risks of injury. That duty, the Appeal Court said, did not place a legal responsibility on Tricare to provide a happy, conflict-free workplace or politely behaved managers, but it did require Tricare’s managers to take reasonable care to avoid psychiatric illness to an obviously vulnerable employee such as Ms Eaton.
The question to be determined was whether the risk of psychiatric illness was evident to Tricare and/or the manager, or ought to have been evident.
Fellow workers gave evidence that Ms Eaton’s demeanor had previously been “happy go lucky,” “very outgoing,” and “bright and bubbly”. However, Ms Eaton’s apparent psychological state noticeably deteriorated during the period 2009 to 2010 whilst she was under the direct control of the manager. Ms Eaton was often observed at work to be teary, shaking, and with a slight tremor in her hands.
The Appeal Court held that in those circumstances, there was more than a far-fetched or fanciful risk that Ms Eaton would suffer a psychiatric illness without the exercise of reasonable care by TriCare to avoid or minimise her stressful experiences in the workplace.
The Appeal Court said that the manger ought to have foreseen that Ms Eaton was particularly vulnerable. The management style of the manger coupled with excessive hours Ms Eaton was required to work, was negligent on the part of the manager. TriCare was therefore vicariously liable to compensate Ms Eaton for the manager’s actions.
The precise amount that TriCare was ordered to pay was $435,583.98 plus costs.
Lavan comment
This case demonstrates the importance of employers being observant about the interaction and working relationship between its employees, particularly where there is a power imbalance such as the working relationship between a manager and an employee under their supervision.
Hence, any changes in an employee’s behavior that could be uncharacteristic should be investigated to ensure that there are no underlying issues present (such as bullying and intimidating behavior from other employees or supervisors).
It is important that employers address any apparent tension between management and employees in the workplace to ensure it does not escalate into bullying which may expose employees to unnecessary risks of harm and injury and employers to potential legal proceedings.
