Employer duty of care greater where risk of injury at work is obvious

An employer’s duty of care to its employees is greater when there is an obvious risk of psychological or physical injury (whether or not it results in a workers compensation claim) due to the nature of the work and/or the working environment. Zagi Kozarov was a dedicated and hard working solicitor, repeatedly exposed to traumatic sexual material which caused her to suffer psychiatric injury. She brought a WorkCover common law claim for compensation against her employer after being diagnosed with PTSD and depressive disorder.

The ultimate High Court decision in this case might be a trigger for a change in the way that workers compensation claims have been approached in Victoria.

In April 2007 the Victorian Office of Public Prosecutions set up a specialist sexual offences unit called the SSOU. Its purpose is to prosecute serious sexual offences.

The unit employed 25 solicitors as well as administrative and other staff.

In June 2009, Ms Kozarov joined the unit as a lawyer. Her work involved regular exposure to traumatic material including child pornography, information relating to other child and adult sex offences and interaction with survivors of trauma.

She expressed concerns early in her employment about the emotional effects of those repeated exposures on staff. At staff meetings she expressed that the work was having an affect on her daily life and the way that she perceived risks to her own children.

She was known by her supervisors to be a hard working, dedicated and loyal employee, who worked on a higher number of files than recommended by the SSOU.

In May 2011 she was promoted.

Despite this, Ms Kozarov’s health was worsening. Several times in 2011 she raised concerns about the impact of the type of work and the workload, on her mental health.

She was experiencing worsening anger, anxiety, disordered eating and sleeplessness.

In August 2011 Ms Kozarov suffered a significant deterioration in her mental health.

In 2012 she hit rock bottom and was unable to continue to work in the SSOU.

The Supreme Court of Victoria

The trial judge (Jane Dixon J) held the defendant (the State of Victoria) liable to the appellant (Ms Kozarov) in negligence and awarded damages in her favour. Ms Kozarov was awarded $435,000 in compensation.

The Court of Appeal

The Court of Appeal overturned the result, ordering that the defendant was not liable for Ms Kozarov’s injuries and losses.

The Court of Appeal determined that although the State of Victoria had breached its duty of care to Ms Kozarov, it had not been established the negligence was a cause of her injuries: in particular that even if the defendant had acted reasonably in 2011, Ms Kozarov’s injuries would not have been avoided.

The High Court of Australia

Ultimately, the High Court found that Ms Kozarov (and other employees in the SSOU) was employed on the basis that her employer would ensure that policies in place to reduce risks to mental health were applied. The mental health risks for SSOU employees were considered part and parcel of the role; that is, risk was inherent based on the tasks the employees were required to undertake on a daily basis.

In making its determination in favour of Ms Kozarov, the High Court delivered a clear message.

The focus of her claim at all times had been whether the employer had been put on notice of a potential psychiatric injury, or whether there had been evident signs warning of possibility of psychiatric injury. This is called a “Koehler notice” because of the principle from the case of Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44.

The case of Koehler stands for the principle that an employer “is entitled to assume, in the absence of evident signs warning of the possibility of psychiatric injury, that the employee considers that he or she is able to do the job”.

The High Court, however, made clear that Ms Kozarov’s claim was made unnecessarily complex because of undue focus on the case of Koehler, which did not apply in this case.

The Court expressed that given that the risk of psychiatric injury was inherent to the role and known to the SSOU, it was unnecessary for Ms Kozarov to prove that she had put her employer on notice of the possibility of a psychiatric injury.

High Court Justices Keifel CJ and Keane J stated [6]:

It should be understood, however, that the circumstances of a particular type of employment may be such that the work to be performed by the employee is inherently and obviously dangerous to the psychiatric health of the employee. (just as other kinds of work are inherently and obviously dangerous to the physical health of the employee). In any such case, the employer is duty-bound to be proactive in the provision of measures to enable the work to be performed safely by the employee. The present was such a case.

The Court went on to find that the employer was in breach of its duty of care to Ms Kozarov from the very start of her employment at the SSOU.

The High Court found that Ms Kozarov had been injured as a result of vicarious trauma stemming from unsafe systems of work, and found in her favour.

This case does not change the law and does not get rid of the Koehler principle altogether.

In many cases, an employer will need to be on notice of a potential psychiatric injury before it can be said that they have failed to appropriately respond to or reduce that risk.

An employer has a duty to exercise reasonable care to avoid a foreseeable risk of psychiatric or physical injury to employees.

However, where that risk is obvious or inherent to the role, it is not necessary for the employer to be warned of that risk. It is accepted that they are already aware of that risk.

This case is a timely reminder that the obligations of an employer to take reasonable steps in relation to its employees will be greater in workplaces where there is an inherent danger of physical or psychiatric injury to employees.

In many cases, this will involve the employer taking proactive steps to enable its staff to work safely.