Australia: $1.7 million in damages for victim of workplace bullying by CEO

The Queensland Supreme Court last month awarded $1,703,530 in damages against an employer, whose Chief Executive Officer's "unjustified blaming, humiliation, belittling, isolation, undermining and contemptuous disregard" of the plaintiff employee resulted in serious psychiatric injury. The employer was found vicariously liable for the CEO's actions and to have breached its own duty of care.

Repeated mistreatment and harassment of employee by CEO

Ms Robinson was the District Director of Nursing for the Cape York Health Service and brought her claim against the State of Queensland for negligence and vicarious liability. Ms Robinson complained that, from March 2010 to 17 January 2011, the CEO repeatedly harassed and mistreated her. This conduct included:

  • unjustified, loud and aggressive disciplining and belittling of her in public and in front of other staff on multiple occasions;
  • failing to inform her of allegations against her and failing to provide those allegations in writing despite repeated requests;
  • isolating her on many occasions, including by failing to address her reasonable queries, failing to meet her for requested private discussions, and circumventing her in communications with staff; and
  • humiliating her by making substantive decisions about her employment and communicating these decisions to staff without first consulting or advising her.

This mistreatment caused the plaintiff to develop a chronic adjustment disorder. The plaintiff never returned to work and subsequently entered into compulsory retirement due to her injury.

Employer liable

Justice Henry found that the CEO's conduct constituted unlawful workplace bullying and harassment, and a breach of the employer's own Workplace Harassment Human Resources Policy, which required managers to continually model appropriate and ethical behaviour.

His Honour stated:

"In an era when the potentially grave psychological harm done by workplace harassment and bullying is well known, unjustified blaming, humiliation, belittling, isolation, undermining and contemptuous disregard of an employee by a CEO was conduct collectively raising a foreseeable and not insignificant risk of psychiatric injury".1

Because the perpetrator was the CEO of the employer, Justice Henry found it "uncontroversial" that the employer be inferred to have knowledge of the CEO's conduct. However, His Honour noted that, even if the bully were not the CEO, the repetitive and public nature of the harassing conduct would nevertheless have compelled the inference that the employer failed to adequately monitor its employee's conduct.

Thus, because the "probability of potentially serious psychiatric injury" arising from workplace harassment was "sufficiently well known", the employer's failure to take timely and determinative action to prevent the conduct made it vicariously liable, and was a breach of its duty to take reasonable care to avoid psychiatric injury.2

Justice Henry awarded the plaintiff $1,703,530 (less the amount of workers' compensation payments already received). This sum accounted for past and future economic loss, medical and rehabilitation expenses, and general damages for pain and suffering.

Key lessons for employers

This decision is yet another reminder for employers of the importance of ensuring that they have appropriate policies and procedures in place to address workplace bullying, including psychological bullying.

  • However, having well drafted policies and procedures and nicely-worded messages of support from the Executive will not be enough on their own for an employer to avoid vicarious liability. Employers must also ensure that employees understand how to raise, and feel comfortable raising, any concerns they may have in this regard.
  • Further, leaders have a critical role to play and must convey the message that bullying behaviour is unacceptable – no matter who you are – and will not be tolerated under any circumstances.

Most importantly, where the alleged perpetrator is a senior executive or manager, the employer must ensure that its procedures provide for a prompt and impartial investigation and for appropriate disciplinary action to be taken if the allegations are substantiated.

Footnotes

1Robinson v State of Queensland [2017] QSC 165 at [304].

2 Ibid [305].

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