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High Court to Reconsider Definition of Work: Implications for Employers' Duty of Care

The High Court is currently deliberating a case that could significantly redefine employers' duty of care in relation to the disciplining and dismissal of workers. This case arises from the appeal by a former consultant for Vision Australia, who is challenging a Victorian Supreme Court of Appeal judgment concerning his dismissal and subsequent psychiatric injury.

High Court to Reconsider Definition of Work: Implications for Employers' Duty of Care
High Court to Reconsider Definition of Work: Implications for Employers' Duty of Care

Background of the Case

The consultant, who worked in adaptive technology for Vision Australia, developed a major depressive disorder after his dismissal in 2015. His termination followed an incident with a hotel owner during a work trip. Initially, the Supreme Court found no breach of duty of care by Vision Australia but awarded $1.44 million in damages for lost earnings and pain and suffering due to the organisation's failure to adhere to its own disciplinary processes.


Challenging Historical Precedents

The legal team for the consultant, led by Perry Herzfeld SC, Eitan Makowski, and Stephen Puttick of Eleven Wentworth, is challenging the applicability of the 1909 House of Lords' Addis ruling. This ruling has historically prevented Australian courts from awarding damages for psychiatric injury resulting from wrongful dismissal. Vision Australia contends that overturning this precedent would disrupt contractual certainty and business operations.


However, the consultant's lawyers argue that the Addis ruling should not preclude the recovery of damages for psychiatric injury caused by wrongful dismissal. They emphasise that the case is as much about contractual breach leading to psychiatric injury as it is about compensation for the manner of dismissal.


Legal and Societal Implications

The consultant's legal team asserts that the correct approach should be based on ordinary contractual principles, as seen in the High Court's 1993 decision in Baltic Shipping Co v Dillon. They argue that the law must evolve in line with changing societal expectations, a concept supported by cases such as Johnson v Unisys.


The lawyers also rebut Vision Australia's claim that this appeal only concerns compensation for the manner of dismissal, stating that it also addresses the broader issue of recovering damages for psychiatric injury due to contractual breach.


Modernising the Definition of Work

A key point of contention is the definition of a 'system of work.' Vision Australia has argued for a narrow definition, limited to the performance of workplace tasks. In contrast, the consultant's legal team argues that this narrow approach is outdated and fails to reflect the realities of the modern workplace.


They contend that employers' duty to provide a safe system of work should logically extend to disciplinary and termination processes. Limiting this duty is seen as arbitrary and incoherent, neglecting the comprehensive nature of workplace health and safety.


Potential Outcomes and Impact

If the High Court decides to overturn the Addis precedent, it could pave the way for employees to seek damages for psychiatric injuries resulting from wrongful dismissals. This would represent a significant shift in the legal landscape, aligning with modern expectations of workplace safety and mental health considerations.


Employers may need to reconsider their contractual terms and disciplinary procedures to mitigate potential liabilities. While some argue this could introduce uncertainty, the consultant's legal team maintains that clear, express terms in contracts can address these concerns.


Conclusion

The High Court's decision in this case has the potential to reshape the understanding of employers' duty of care in Australia. By expanding the definition of a safe system of work to include disciplinary and termination processes, the court could enhance protections for workers' mental health, reflecting contemporary workplace standards.


As this case progresses, it will be crucial for employers and employees alike to stay informed about the implications for employment contracts and workplace practices.


Stay tuned to 1800ADVOCATES for further updates on this landmark case and its impact on employment law in Australia.

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