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This week, we look at a case heard earlier this year, Elisha v Vision Australia, focusing on the concept of foreseeable harm in employment law and psychosocial risk management.
Australian employers may be liable for psychiatric injury caused by a breach of an employment contract, High Court rules
From Adam Elisha
"I’m Adam Elisha. My High Court case is Elisha v Vision Australia Ltd.In 2015, after a holiday in Vietnam with my family, I went back to my job of nearly 9 years and was immediately stood down on fabricated allegations - allegations fabricated BY my employer, then fired without notice, by email, by (my ‘family’ at) Vision Australia.I sued Vision Australia for breach of contract. A black and white breach, clear as day."
Vision Australia:
Using the case law HERE, it seems VA looked to argue two key things
Procedural fairness and policy alignment:Vision Australia contended that they had followed procedural fairness in their disciplinary process and that their actions were in line with their disciplinary policies and procedures. They emphasised the incorporation of these policies into the employment contract and argued that they had adhered to these policies in their disciplinary actions against Mr. Elisha.
Foreseeability and remoteness of harm:VA seemed to argue that any psychological harm caused by their actions (specifically the manner of Mr. Elisha's dismissal) was too remote to be considered a direct consequence of their actions. They debated the scope of their contractual duties and the extent to which these could foreseeably lead to psychiatric injury, suggesting that the link between their procedural actions and Mr. Elisha's psychological harm was not direct or foreseeable.
Key facts:
Case Reference: Elisha v Vision Australia Ltd [2024] HCA 50
Issue: The case involved a claim by Mr Elisha, who alleged that his employer, Vision Australia, had terminated his employment in a manner that breached his employment contract and caused him psychiatric harm.
Outcome: The High Court affirmed that employees are entitled to recover damages for psychological illness or injury caused by a breach of their employment contract, including breaches related to the manner of termination.
Key insights for employers:
Australian employers may be liable for psychiatric injury in a breach of contract
Procedural fairness and ensuring policy aligns with actions: Employers must ensure that their dismissal procedures and any significant employment actions are not only legally compliant but also align with their own policies and documented practices.
Management of foreseeable risks: Employers need to consider and manage the foreseeable risks associated with employment actions that could lead to increased stress, such as restructures, terminations, and significant workplace changes.
As always, thank you for reading and we hope you found this insightful!
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