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The Supreme Court of Victoria has awarded $625,000 in damages for a psychiatric injury, where an employer failed to introduce appropriate policies and procedures to manage bullying and harassment claims.

In Wearne v State of Victoria [2017] VSC 25 a worker who was employed as a case manager at the Department of Human Services alleged that she had sustained an aggravation of a pre-existing adjustment disorder due to bullying and harassment by her supervisor. Specifically, the worker argued that:

  • from at least 4 March 2005, the employer knew or ought to have known that she was vulnerable to psychiatric injury as she had reported her condition and, as a result of which, she had been transferred to another office
  • she was provided with a reduced workload and underwent counselling after her transfer
  • her new supervisor was made aware of her previous issues but treated her "unkindly, unfairly and was bullying her", and
  • the employer failed to take reasonable steps to stop the injury from occurring and/or deteriorating.

The worker's psychiatric injury was found to be serious and the matter was heard before the Court on the questions of negligence and quantum of damages.

Actions the employer should have taken

The Court found in favour of the worker. In relation to the allegations of negligence, it found that:

  • moving the worker to a different team with a different supervisor was an option that could have been undertaken by the employer to alleviate the worker's injury.
  • while the employer had a process in place for dealing with bullying and harassment complaints, it was not followed and the process itself was flawed because it required the alleged perpetrator to sign the complaint document, and
  • a reasonable employer would have:
    • instigated a formal investigation
    • offered formal counselling for the alleged perpetrator
    • trained the alleged perpetrator on how to deal with the worker's mental health issues
    • implemented a formal early intervention plan for occupational stress
    • arranged a formal mediation between the parties, and
    • moved the worker to another supervisor.

The Court found the employer to have been negligent as, had the employer undertaken the above steps, the worker would not have sustained the injury. The Court awarded damages of $210,000 for pain and suffering and $415,345 for loss of earnings. The amount for damages was based on the worker's loss of enjoyment of life and the severe ongoing consequences of her condition, which precluded her from returning to work.

Take proactive action

It is crucial for self-insurers to have policies and procedures in place to manage bullying and harassment claims. These policies and procedures should answer the question, "What would a reasonable employer in the specific circumstances do to reduce the risk of injury and deal with a bullying and harassment complaint in an effective manner?"

Policies and procedures must be realistic, efficient, effective and easy to follow. They should consider the impact the process has on the worker making the allegations and identify issues that need to be addressed as well as, if appropriate, offer a solution that minimises the risk of injury. 

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