Suspension of employment – misconduct meeting – performance meeting…

…allegations of misconduct – investigation – pure psychiatric injury

The plaintiff was a manager for the Gympie Regional Council.

After six years of service, performance issues were raised against him which resulted in a performance meeting occurring on 30 June 2014.

Following this meeting, unrelated to his performance allegations were made that he revealed confidential information about another employee which allegedly constituted serious misconduct worthy of dismissal.

A second meeting was then held on 21 July 2014 where the plaintiff was informed he was suspended on full pay pending investigations about the serious misconduct.

Two weeks following his suspension, on 9 August 2014 the plaintiff supplied the council with a medical certificate claiming he was unwell due to psychiatric injury and claiming sick leave from 9 August 2014 onwards.

The investigation ultimately cleared the plaintiff of serious misconduct but found lesser misconduct and poor management style. Regardless, he did not return to work and his employment was subsequently terminated.

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The plaintiff claimed damages for psychiatric injury caused by the act of suspending him pending the investigation, including in circumstances where the council failed to follow its own policies and procedures relating to the suspension of employees.

The plaintiff’s claim was dismissed at trial. The plaintiff appealed.

Decision

Appeal dismissed.

Ratio

The Court of Appeal unanimously upheld the decision of the trial judge to dismiss the claim, finding that that:

1. There exists no implied term of mutual trust and confidence between an employer and employee in Australia, cf the situation in England.
2. It is an implied term of an employment contract that an employer can give its employees reasonable and lawful directions.
3. In so doing, an employer does not owe an employee a duty of care in relation to suspending their employment on full pay pending an investigation if it can be proven that the decision to suspend was a reasonable and lawful direction made in the circumstances.
4. The allegations against the plaintiff, if proven, would have constituted serious misconduct worthy of dismissal and it was therefore in the interests of staff welfare that the plaintiff be removed from the workplace while the complaints were investigated.
5. In the premise, the decision to suspend the plaintiff was a reasonable and lawful direction and made bona fide, and therefore no duty of care was owed to the plaintiff.
6. Even if a duty of care was owed, the risk of psychiatric injury from suspending the plaintiff was not reasonably foreseeable, as:
   • The plaintiff only informed his employer of his psychiatric symptoms via the medical certificate delivered two weeks after his suspension.
   • Before this and prior to his suspension, the plaintiff appeared to be an ordinary happy employee not suffering from any particular problem or vulnerability to psychiatric injury.
   • Absent employer knowledge about some particular problem or vulnerability of the plaintiff, an employer is entitled to assume that its employees are up to the normal pressures of the job which they signed up for, including occasional stressful situations such as the one presently involving the plaintiff.
7. Although the employer did not follow its own suspension policy in suspending the plaintiff, their suspension policy was a guideline only and was not required to be strictly followed unless it formed part of the plaintiff’s contract of employment, which it did not.
8. The expert psychiatric evidence indicated that the plaintiff’s psychiatric injury was caused by the totality of the events surrounding the cessation of his employment, including his performance issues and the allegations of misconduct made against him prior to his suspension, and not solely by the suspension of his employment. Therefore causation for the injuries was not established, as negligence was only claimed in regards to his suspension which failed.

Decision delivered 9 December 2022 – Mullins P, Flanagan JA and Williams J.

This compensation law casenote appears courtesy of Travis Schultz & Partners (TSP), where the author, James Leggo, is an Associate. As part of the firm’s commitment to providing ongoing legal education, TSP practitioners review relevant judgments and prepare case summaries for the legal profession. A free searchable catalogue of compensation law casenotes is available at schultzlaw.com.au/case-summaries (registration required). The full version of the judgments can be found at austlii.edu.au.

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