Australia: Employer Breached Duty Of Trust And Confidence – Damages Of Almost $400,000 Awarded

Last Updated: 28 August 2008
Article by Andrew Tobin

Andrew Tobin - Partner

A recent decision of the South Australian Supreme Court has highlighted the need for employers to listen to their employee's concerns and act upon grievances. The court awarded almost $400,000 to a former school teacher who had been overworked, bullied and harassed, finding that the Department of Education and Children Services (DECS) had breached its implied duty of trust and confidence by failing to manage the teacher's workload and failing to respond to the teacher's complaints.

The 'implied duty of trust and confidence' affects every employment contract and is being increasingly relied upon in Australia to justify common law damages claims by employees against their employers (or former employers).

Mr McDonald was a business studies teacher who, while employed at the Mt Barker High School, became involved in the repair and maintenance of the school's computers. He was not trained or qualified to perform these duties. This additional workload caused Mr McDonald to become stressed and he resigned from the school. Mr McDonald had informed DECS of the stress he was suffering and the cause of the stress, but it took no action to find out the extent of his stress or to reduce or effectively manage his stress.

Mr McDonald then took up a role at the Brighton Secondary School in 1997, teaching computers and mathematics. Throughout his time there he again became more involved in the information technology (IT) systems, requiring him to work additional hours and to reduce his teaching load. During 1997, Mr McDonald was required to assist with the implementation of a completely new computer network for the school. Other members of staff were employed to help Mr McDonald in this task. Mr McDonald found it difficult to teach his classes with these extra duties and having to assist his colleagues with their IT queries.

In 1998, Mr McDonald was appointed as the fulltime coordinator of IT for 5 years. The principal at the time, Ms Schupelius, advised Mr McDonald to give up his teaching responsibilities to devote himself to his IT duties, but Mr McDonald did not want to do so. However, he did give up all but 2 subjects and continued to manage the computer network.

In 2000, Mr McDonald had to purchase new computers for the school. For budgetary reasons, he had to buy second-hand computers. This created considerably more work for Mr McDonald and his staff to get them to a reasonable standard for use by students. Mr McDonald alleged that during this time he was exposed to an excessive workload and was not given any training or counselling in how to deal with these pressures. That year, Mr McDonald was also told that his position as IT co-ordinator would not be renewed.

Mr McDonald wrote a letter of resignation on 23 January 2001, stating that he was constructively dismissing himself and would sue the school for constructive dismissal. Mr McDonald then met with the District Superintendant and the acting principal of the school, Mr Potts, seeking to have his role clarified. He had previously complained to Ms Schupelius, who had promised to review his position and to prevent teachers and other students from asking him to perform IT tasks.

In July 2001, Mr Mitchell took over from Mr Potts as principal of the school. Mr Mitchell removed Mr McDonald from his IT responsibilities and employed others to take over his role. He did not discuss this with Mr McDonald. The new employees then denied Mr McDonald access to his computer and took the telephone from his office. Mr McDonald was then denied an alternative role at the school for which he applied. Mr McDonald consequently took 6 weeks sick leave after being diagnosed with stress.

On Mr McDonald's first day back after stress leave, he was confronted by Mr Mitchell and told to fill out a transfer form. When Mr McDonald refused to do so, Mr Mitchell said that he would fill it out for him, which he ultimately did. In so doing though, Mr Mitchell did not include many of the details that might have seen Mr McDonald transferred to an appropriate role.

Mr McDonald resigned in 2003. At that time, he was suffering from an adjustment disorder with anxiety and other illnesses. He maintained he was constructively dismissed.


The Court decided that DECS had breached its implied duty of trust and confidence, duty of care and duty of good faith to Mr McDonald in:

1. failing to manage, or attempting to manage, Mr McDonald's health and welfare;

2. failing to adequately address Mr McDonald's grievances;

3. failing to consult Mr McDonald over staffing decisions in the area for which he was responsible (the Court described this as sinister);

4. not clarifying Mr McDonald's role;

5. failing to tell other staff not to ask Mr McDonald to fix computer problems;

6. failing to grant Mr McDonald an interview for the co-ordinator's position which he had previously performed.

The Court also decided that Mr McDonald had been subject to victimisation. The school principal had demeaned Mr McDonald when he complained about being victimised. It was clear to the Court that the school was attempting to force him out.

The Court said that Mr McDonald's resignation in 2003 amounted to a constructive dismissal on the basis that there was an irretrievable breakdown in the employment relationship. It was clear that Mr McDonald had been left to his own devices, performing duties that were different and far more onerous than those for which he applied. It would not have been reasonable for Mr McDonald to put up with the employer's conduct.

Lessons For Employers

While this case involved the failure of an employer to adequately respond to the increased workload and grievances of the employee, it highlights the potential actions available to employees faced with victimisation and bullying in the workplace. Employers considering 'managing out' an employee should think carefully about the implications of these kinds of actions and should ensure any performance management process is handled in a considerate and transparent manner. Communicating with employees is vital in reducing the risk associated with stress claims.

A starting point for appropriate management of these types of issues is the documentation and implementation of appropriate policies and systems dealing with bullying, harassment, victimisation and grievance resolution.

© HopgoodGanim Lawyers

Australia's Best Value Professional Services Firm - 2005 and 2006 BRW-St.George Client Choice Awards

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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