Court decision

High Court refuses to consider an employer's duty to take reasonable care in conducting workplace investigations

By Anna Hendry and Damon King / 23 April 2018

Following the decision of the New South Wales Court of Appeal in State of New South Wales v Paige, it became well established that an employer does not owe an employee a duty to take reasonable care in the conduct of workplace investigations. It was anticipated that this decision might come under scrutiny in the recent appeal in the matter of Govier v The Uniting Church in Australia Property Trust to the High Court of Australia.

In Govier, the Appellant sustained a psychiatric injury which she alleged was caused by the issuing of two letters to her by the employer:

  • The first was issued the day after she was involved in a workplace assault involving a co-worker. The employer notified the Appellant that she was stood down on full pay pending an investigation into the incident and was required to attend an interview the following day.
  • The second was issued two weeks later and notified the Appellant that as she had refused to attend the interview, a preliminary finding had been made that she had engaged in violent and inappropriate behaviour against her co-worker. The Appellant was given five days to show cause as to why termination of employment was not warranted because of that preliminary finding.

The letters were controversially issued in circumstances where the employer had been given a medical certificate by the Appellant stating she was unfit for work (after she had been hospitalised because of her injuries). The Appellant argued that the letters were issued in breach of the employer’s duty to take reasonable care in the conduct of investigations and that the breach caused an aggravation of her psychiatric injury.

The Appellant was unsuccessful in the District Court of Queensland and again in the Queensland Court of Appeal where the authority in Paige was followed.

In Paige, the New South Wales Court of Appeal declined to impose a duty of care on an employer to conduct its disciplinary procedures so as to avoid psychiatric harm to its employee on the basis that:

  • state industrial law imposes obligations on public sector employers in relation to the conduct of investigations and sanctions on employers who do not fulfil those obligations; and
  • to impose the tortious duty of care contended for by the Appellant would be incompatible with the obligations imposed on employers under industrial laws.

On appeal of Govier to the High Court of Australia, the Appellant sought to distinguish the decision in Paige on the basis that in that case, the workplace investigation was disciplinary in nature and resulted in the termination of the Appellant’s employment. Clearly then, the investigation fell squarely within the ambit of the state industrial laws, whereas in Govier, the investigation did not necessarily relate to, or need to involve, a disciplinary outcome. The High Court did not appear to accept this distinction, noting that termination was one possible outcome of the employer’s investigation.

Ultimately, the High Court found that in order to consider whether the proposed duty was compatible with the legislative and contractual context of the employment relationship, it was necessary to have the employment contract in evidence along with any applicable workplace policies.  As the contract and policies were not in evidence in the earlier proceedings, the High Court found that a proper consideration of the question as to the existence and scope of any duty of care was not possible. Leave to appeal was revoked effectively disposing of the litigation.

Take Away Points

The common law position remains that an employer does not owe an employee a duty of care to fairly and reasonably conduct its disciplinary procedures so as to avoid psychiatric harm to its employee in accordance with the authority of State of New South Wales v Paige.

However, we anticipate that there will eventually be an attempt to have such a duty to take reasonable care imposed by the High Court in circumstances where the relevant employment documentation has been put into evidence and either:

  • termination of employment is not, at least, one of the possible outcomes of the investigation; or alternatively
  • other circumstances exist whereby the employee is arguably placed in a special position of vulnerability and those circumstances are known to the employer and not appropriately accommodated.

For further information or discussion, please contact a member of the Insurance and Risk or Industrial and Employment Law team at HopgoodGanim Lawyers.

Anna Hendry
Special Counsel
Anna is a Special Counsel who advises exclusively in insurance litigation, acting on behalf of major public liability insurers, workers’ compensation insurers and self-insurers, compulsory third party insurers and professional indemnity insurers.
Damon King
Senior Associate
Damon King is a Senior Associate in our Workplace and Employment practice.
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