Unreasonable meeting called

Key words

Employer liability – psychiatric injury – reasonable foreseeability of injury – duty of care – risk of psychiatric injury – performance management – disciplinary meeting

Facts

The Plaintiff was employed by the Defendant as an internal sales supervisor, having worked for the Defendant in internal sales between 1997 and 2003, and then from 2005 onwards. The Plaintiff psychiatrically decompensated as a consequence of attending a meeting with the Defendant’s managing director in February 2019 during which the Plaintiff was told that his supervisory role was to be relinquished and his salary would be reduced.

Before the meeting, the Defendant knew the Plaintiff was an emotional person who could become quite easily stressed and anxious. In the weeks before the meeting, the Plaintiff had been observed crying and visibly distressed at work because of personal issues.

The Defendant contended that over the two years before the meeting, the Plaintiff was aware the Defendant considered his work performance to be below standard (which was denied by the Plaintiff).

The meeting was initiated by the Defendant late on a Friday. The Plaintiff was not given any prior notice of the meeting or what was to be discussed. During the meeting, the Plaintiff asked for a job description of his demoted role but was not provided with one. The meeting was held in an open-plan office which meant the discussions could be heard by others in the workplace.

Decision

Rosengren DCJ, delivered on 2 August 2024. Judgment for the Plaintiff in the sum of $395,767.

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Ratio

Her Honour rejected the Defendant’s submissions that, based on the decisions in Paige and Govier, no duty of care was owed in these circumstances.

Instead, Her Honour found a duty of care was owed because the conduct of the managing director in convening the meeting was not something to which the Plaintiff had contractually agreed, and the meeting was not undertaken as part of any disciplinary process or investigation.

Her Honour held that there were clear signs that ought to have alerted the Defendant to the Plaintiff’s psychological vulnerability and that it was irrelevant whether prior observations of the Plaintiff’s distress in the workplace were related to personal rather than work issues.

The demotion of a long-term employee was considered to be a serious matter which would inevitably cause any employee disappointment, unhappiness and distress, but against the Defendant’s awareness of the Plaintiff’s psychiatric vulnerability, a reasonable person in the position of the Defendant was on notice that a failure to address perceived performance deficiencies prior to the meeting would risk psychiatric injury.

Her Honour otherwise considered that even in the absence of the Plaintiff’s pre-existing vulnerability, the circumstances in which the meeting occurred was sufficiently unreasonable as to give rise to the risk of psychiatric injury, which would have been very distressing for any employee.

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Her Honour held that a reasonable person in the Defendant’s position ought to have provided the Plaintiff with prior written notice of its concerns about his performance, given the Plaintiff proper opportunity to respond to such allegations prior to the meeting, ensured the meeting was conducted in a confidential and calm manner and provided the Plaintiff with the opportunity to bring a support person. A failure to undertake these reasonable steps each constituted a breach of the duty of care owed.

Causation was not established regarding the failure to bring a support person, but the remainder of the breaches were considered to have materially caused the psychiatric injury, notwithstanding his pre-existing vulnerability.