Workplace flexibility in action

The current relatively conservative makeup of the High Court has a range of manifestations, not just in more newsworthy decisions like indefinite detention of asylum seekers or preservation of barristers’ unconscionable immunity from suit.

One may also argue with some force that the Court’s current approach to developing the common law, especially in relation to workplace injuries, is also being adversely affected by an approach that appears to owe more to ideology than application of logic or legal reasoning.

In Koehler v Cerebos (Australia) Ltd, a bench of five Justices (Gleeson CJ and Kirby J being absent) dismissed an appeal by a female employee who had suffered a fairly serious debilitating psychiatric injury as a result of workplace conditions. The facts were:

Before taking up the job as a part-time merchandising representative, the appellant had been employed full-time by the employer as a sales representative. She worked in that position between November 1994 and April 1996. As a sales representative the appellant negotiated sales of the employer’s products to independent supermarkets. She was supported by a merchandiser who would set up the display of the goods in the supermarkets.

In March 1996, the employer, having lost the right to distribute an important range of products, retrenched the appellant. It offered her re-engagement as a part-time merchandising representative from 29 April 1996 and she accepted the offer. The letter of engagement set out only the bare bones of her contract of employment. It stated her starting date, and that her working week was Monday to Wednesday (or 24 hours). …

When she reported for work on the first day of her new job (29 April 1996) she was shown a “territory listing”. When she saw the stores that were listed she said at once that there was “no way” she could “do this in 24 hours”. Her supervisor told her to try it for one month and, if she felt that she could not cope, she should let him know. This she did. …

The Commissioner accepted the evidence given by persons familiar with work of the kind undertaken by the appellant in connection with supplying products to supermarkets to the effect that the appellant’s workload “was too much to maintain in three days” and that her workload “was very similar to that of a full-time employee”. It was on the basis of this evidence that the Commissioner found that the appellant’s workload between 29 April 1996 and 2 October 1996 was “excessive”.

In other words, Ms Koehler had been made redundant and was then re-employed on a much reduced salary to perform in 3 days per week the work she had previously done in five. It’s hardly surprising that the Commissioner (in effect the trial judge) found not only that Ms Koehler’s workload was “excessive”, but that “with its knowledge of the industry and the particular workload of the appellant the employer required no particular expertise to foresee a risk of injury to the appellant“.

However, the High Court took a much narrower view of the foreseeability requirement in establishing liability for negligence. It agreed with Hasluck J’s formulation in the Full Court of the WA Supreme Court:

“[I]n the absence of external signs of distress or potential injury a reasonable person in the position of the [employer] could not have foreseen that the [appellant] was exposed to a risk of injury as a consequence of her duties as a merchandiser. The presence of complaints about the workload may have suggested to a reasonable employer that remedial action was required in order to avert an industrial dispute but on the evidence in this case the nature of the complaints was not enough to alert a reasonable employer to the possibility of injury.”

McHugh, Gummow, Hayne and Heydon JJ put it even more succinctly, observing that “the employer had no reason to suspect that the appellant was at risk of psychiatric injury“, although they later expanded on what they meant by this:

Here there was no indication (explicit or implicit) of any particular vulnerability of the appellant. As noted earlier, she made many complaints to her superiors but none of them suggested (either expressly or impliedly) that her attempts to perform the duties required of her were putting, or would put, her health at risk. She did not suggest at any time that she was vulnerable to psychiatric injury or that the work was putting her at risk of such an injury. None of her many complaints suggested such a possibility. As the Full Court said, her complaints may have been understood as suggesting an industrial relations problem. They did not suggest danger to her psychiatric health. When she did go off sick, she (and her doctor) thought that the illness was physical, not psychiatric. There was, therefore, in these circumstances, no reason for the employer to suspect risk to the appellant’s psychiatric health.

McHugh, Gummow, Hayne and Heydon JJ further explained their reasoning in this passage:

It may be right to say that it is now a matter of general knowledge that some recognisable psychiatric illnesses may be triggered by stress. It is, however, a further and much larger step to take to say that all employers must now recognise that all employees are at risk of psychiatric injury from stress at work. Yet it is that proposition, or one very like it, which must lie behind the Commissioner’s conclusion that it required no particular expertise to foresee the risk of psychiatric injury to the appellant.

But surely it isn’t necessary to posit a proposition anywhere near as broad or general as that to found the Commissioner’s decision. It is only necessary to put a proposition that an employer ought to realise, if they sack a worker and re-employ her to do the same job in 60% of the time previously required (and actually needed), then there are two likely outcomes:
(a) the employee will make little or no attempt to do the job properly, and will probably then be sacked (or not have their contract renewed, which amounts to the same thing), such employers not usually being renowned for taking responsibility for or reversing their own unreasonable decisions; or
(b) dedicated employees will continue striving to do the job even under impossible conditions, until their health eventually breaks down.

Surely commonsense tells one, as the Commissioner found, that an employee given an excessive workload for a long enough period will eventually get sick, and it doesn’t require any particular expertise to know this. On appeal at least, it wasn’t disputed that Ms Koehler did suffer a serious psychiatric illness as a result of workplace conditions, and it appears not even to have been in issue that the workload was excessive. The case simply turned on the issue of “foreseeability”.

The Court also ignores the practical reality of such situations to an almost breathtaking extent. It appears to be suggesting that a worker would need to have made clear complaints of the likely (and emerging) health effects of the excessive workload, or even have developed a pattern of taking sick leave days. Only complaints of the specificity or the existence of facts of that sort could have signalled the risk of injury to the employer to a sufficient extent to make the injury “foreseeable” in a legal sense. But a dedicated employee, especially one who has previously been made redundant and is therefore acutely aware of the insecurity of her employment situation, is obviously going to be very wary of either taking sick leave or signalling ill-health to the employer. Either action is very likely to result in non-renewal of the contract of employment: the ability to take such peremptory action against “non-performing” employees (however unreasonable the performance demand may be) is one of the prime reasons for employers to embrace casualisation, outsourcing and part-time contract employment options. It’s the very essence of the “flexible” working conditions so beloved of neoliberals.

In the long run, I’m optimistic about the future of workplace relations, irrespective of the Howard government’s actions or those of employers like Cerebos. The retirement of babyboomers will soon turn a long-term oversupply of workers into a chronic undersupply, however much Costello implores people to have more babies or Vanstone increases immigration rates while still pandering to the electorate’s xenophobia by continuing to symbolically beat up on asylum seekers. When that occurs, companies which treat their skilled, dedicated employees as precious resources will thrive, while those like Cerebos will deservedly suffer in the marketplace.

But until that day comes, you would at least hope that the High Court would shape the common law in a way that imposes a modicum of social responsibility on unscrupulous employers. Instead, the Koehler decision gives the green light to those who believe “human relations” means screwing every last drop of work out of their employees regardless of the health and social cost.

About Ken Parish

Ken Parish is a legal academic, with research areas in public law (constitutional and administrative law), civil procedure and teaching & learning theory and practice. He has been a legal academic for almost 20 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in the early 1990s.
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Mindy
Mindy
2021 years ago

Have I read this right? Because she didn’t complain of suffering a psychiatric illness because of work, her employer is not responsible? So logically all employees should be at least trained to the level of psych nurses so that they can spot the symptoms? Oops, forgot they don’t train psych nurses anymore either.

Ken Parish
Ken Parish
2021 years ago

Mindy

Exactly. It’s a quite extraordinary decision, I think, at least in terms of commonsense.

John Morhall
John Morhall
2021 years ago

Ken

This decision is a sad one in that it would appear, at least in part, to focus on the nature of the contract of employment and the express commitment of the employee to undertake the work, whether reasonable or not, in determining whether the employer had a duty of care. McHugh J et al stated:

“At least the following questions are raised by the contention that an employer’s duty may require the employer to modify the employee’s work. Is an employer bound to engage additional workers to help a distressed employee? If a contract of employment stipulates the work which an employee is to be paid to do, may the employee’s pay be reduced if the employee’s work is reduced in order to avoid the risk of psychiatric injury? What is the employer to do if the employee does not wish to vary the contract of employment? Do different questions arise in cases where an employee’s duties are fixed in a contract of employment from those that arise where an employee’s duties can be varied by mutual agreement or at the will of the employer? If an employee is known to be at risk of psychiatric injury, may the employer dismiss the employee rather than continue to run that risk? Would dismissing the employee contravene general anti-discrimination legislation?

They seem to be suggesting that it does not matter how onerous the task, or how difficult it would be to achieve it, the mere fact that it has been contracted to be achieved, and because at the time of employment the employee did not specifically complain about or overtly evidence psychiatric illness, it is sufficient for the employer not to have a duty of care. This notwithstanding that the employee herself was not aware of the fact that she had developed a psychiatric injury.

The Court seems to have disappeared into a legal labyrinth in making its determination that because the employee had accepted a contract of employment, which may even on its face, be fundamentally inequitable, such acceptance of the contract conditions on the employee’s part is sufficient to suggest that the employer would be unaware of any consequences of its fulfilment. Common sense would seem to suggest that her complaints were indicative of her concerns about being able to achieve the work, and it would be reasonable to deduce that both the employer and employee would have been aware that the work required to be undertaken was more than could be reasonably achieved within the contracted work hours. Common sense would seem to suggest that if not caused by overwork, then what? There appears to have been no reasonable alternative suggestion for the onset of the condition. The fact that the woman undertook to contract on the basis of the work as an alternative to redundancy seems to have no bearing on the outcome.

The Court seems to interpret Annetts as saying that it is the impression that the employer gains of the employee that is the determinative factor in determining the question of foreseeability (she appeared to be working fairly independently and may not have had any direct regular interface with the company). There appears to be no consideration of if it was not work induced, what was it?

A 2001 US survey by the Families and Work Institute “Feeling overworked

Ken Parish
Ken Parish
2021 years ago

John

Your comments are well made. However I should add that the passage you quote, where McHugh et al ask a series of questions, was somewhat rhetorical in nature, in that it concluded effectively with a statement that it wasn’t really necessary to answer any of these questions, because the scope of any duty of care in this case was determined by application of a narrow test of foreseeability, and application of that test resulted in the conclusion that no duty of the type contended for by Ms Koehler arose at all.

Now I’m not a tort law specialist, and presumably I’m missing an important distinction that someone else will hopefully elucidate for us, but it seems to me that the High Court in Koehler adopts an unduly narrow view of the generally accepted test of foreseeability as explained in any number of cases and summarised in this extract from Halsbury’s Laws of Australia:

“It is not necessary for the plaintiff to show that the precise manner in which his or her injuries were sustained was reasonably foreseeable; it is sufficient that a consequence of the same general character as that which occurred, affecting a class of persons to which the plaintiff belonged, was reasonably foreseeable as a consequence of the defendant’s conduct.”

As I suggested in the primary post, I would have thought it was eminently foreseeable that if an employer overworks an employee for long enough, the employee will get sick. The precise type of illness may not be foreseeable, maybe not even whether it will manifest in a physical or psychiatric form, but illness/injury of some sort is certainly foreseeable to the point of inevitability.

John Morhall
John Morhall
2021 years ago

i agree (sorry no caps) it seems that the court has missed the common sense perspective in favour of a narrow view of foreseeability which does not accord with some of the earlier precedents as you point out> the difficulty will be that it sets the basis for the lower court”s decision making for future cases remind me to read those delightful dickensian novels again> sorry about the lack of caps _ my keyboard is phi upsilon kappa”d>