A recent decision of the Queensland Court of Appeal (QCA) has set the record straight in finding that an aged care provider was vicariously liable for the belittling and aggressive conduct of its manager, and awarding the worker $435,583.98 in damages for a psychiatric injury.

Ms Eaton started work as an administrative assistant for an aged care provider in June 2007.

Fellow workers recall Ms Eaton being a ‘bright and bubbly’ colleague until a new manager joined the team in 2009, following which she was often seen holding back tears with trembling hands.

In March 2010, following an incident where her manager screamed at her for taking a message for a patient, Ms Eaton tendered her resignation. A few months later, Ms Eaton attempted to return to work as an administrative assistant at a hospital but found after one day that she was unable to do so due to an ongoing depression and anxiety.

Subsequently, Ms Eaton lodged a claim in the Brisbane District Court (DC) against the aged care provider for damages of $587,869 on the basis that the aged care provider was vicariously liable for the manager’s bullying conduct, was negligent in failing to implement control measures to prevent the manager from bullying her, and failed to address her complaints of stress.

At first instance, the DC Judge Devereaux found that the manager was belligerent, offensive and intimidating, consistently belittled and yelled at her in front of others, and told her she had ‘never met anybody so stupid as you’. However, with respect to her claim for damages, Judge Devereaux found that the aged care provider was not vicariously liable because her injury was not reasonably foreseeable.

On appeal, the QCA overturned the decision at first instance finding that the employer breached its duty of care to the worker in failing to realise, despite evident deterioration, that ‘there was more than a far-fetched or fanciful risk that [she] would suffer a psychiatric illness without the exercise of reasonable care by her employer to avoid or minimise her stressful experiences in the workplace’.

In doing so, the QCA referred to the High Court’s position in Koehler v Cerebos (Australia) Ltd [2005] HCA 15 that ‘the relevant duty of care is engaged if psychiatric injury to the particular employee is reasonably foreseeable’.

Accordingly, the aged care provider was ordered to pay Ms Eaton $435,583 in damages for future loss of earnings.

This case serves as a timely reminder that employers have a legal responsibility to take reasonable care to avoid a risk of a psychiatric injury to an employee who is exhibiting a particular vulnerability. As such, it is vitally important that employers treat any suspected or alleged bullying seriously, to ensure they’re not expose to a hefty claim down the track.