Australia: Managing mental health – employers must respond proactively to known risks of psychiatric harm

Last Updated: 17 May 2018
Article by Belinda Winter and Annie Smeaton

In Wearne v State of Victoria [2017] VSC 25, the Supreme Court of Victoria highlighted the importance of a proactive response from employers who become aware of a specific risk of harm to an employee.

A state government employee with known mental health issues, who suffered a breakdown after a mounting conflict with her supervisor was not properly addressed, was awarded more than $600,000 in damages.


Ms Wearne was employed by the Department of Human Services as a case manager assisting in youth welfare in the criminal justice system.

In March 2005, Ms Wearne reported an incident of work-related stress that resulted in a successful WorkCover claim. Following the March 2005 incident, Ms Wearne attended a meeting where the Department developed a documented action plan for an early intervention strategy for occupational stress. The return to work strategy that was put in place for Ms Wearne involved her transfer to a different office within the Department in a similar role. Ms Wearne was mostly off work, with medical certificates for work related stress and anxiety, for approximately one month until she returned to work and was transferred to the different office.

As a result of the March 2005 incident, Ms Wearne remained anxious about any ongoing contact with a number of staff from her former workplace and experienced ongoing stress arising from those events, both of which the Department knew about.

The Department put in place a number of support processes for Ms Wearne, including a reduced case load and ongoing counselling and support. Ms Wearne initially transitioned well into her role at the new office, receiving favourable performance development and recognition feedback from her acting team leader. However, she continued to experience anxiety, which affected her from mid to late 2005.

Around the time that Ms Wearne moved to the new office, Ms Wearne continued to believe, and the Department acknowledged, that she was suffering from post-traumatic stress following the March 2005 incident. Ms Wearne took long service leave from July to September 2006 to deal with stress. The Department approved a secondment for Ms Wearne, at the Department's expense, on her return from leave. The secondment was a positive experience for Ms Wearne, but, as it was about to end, Ms Wearne became anxious about returning to the office.

On her return to the office, the Department placed Ms Wearne with a new team leader, Ms Skerry. Ms Wearne told Ms Skerry directly that the March 2005 incident caused her anxiety resulting in a post-traumatic stress disorder.

Ms Wearne described her initial impression of Ms Skerry's supervision: 'She seemed nice on the outside'; that 'she would be smiling as she criticised me ... it started off small and little bits and got more and more'. In around May 2007, Ms Wearne asked if she could be moved to the supervision of another team leader. Initially, the issue behind this request seemed to be supervision of report writing. The process for Ms Skerry to review and sign off on Ms Wearne's reports had escalated into a source of conflict between them. The Department responded that a team change would be disruptive to others, and rejected Ms Wearne's request.

In February 2008, Ms Wearne reported to Ms Skerry that she had been experiencing panic attacks, which Ms Skerry accepted as genuine. Ms Skerry admitted that she was aware that there was a real risk of a mental breakdown for Ms Wearne, and that she had a responsibility to handle her with 'kid gloves'.

The relationship between Ms Wearne and Ms Skerry continued to deteriorate from mid-2008 onwards however notwithstanding this the Department decided that it was best to leave Ms Skerry and Ms Wearne in the same team 'to try to work it out as professionals'.

Ms Skerry's demeanor suggested mounting frustration with having to manage Ms Wearne and ultimately resulted in an incident in late October 2008 where Ms Skerry confronted Ms Wearne after she became concerned that Ms Wearne had breached client confidentiality. Ms Skerry's response in this situation served to increase Ms Wearne's stress and anxiety. On 7 November 2008, Ms Wearne broke down at work and did not return to the workplace.

Ms Wearne alleged that Ms Skerry's bullying and harassment 'exacerbated her pre-existing chronic adjustment disorder with mixed anxiety and depression.' Ms Wearne claimed damages for pecuniary loss, pain and suffering for a psychiatric injury sustained as a result of her exposure to bullying and harassment on the part of her supervisor.


The Court was satisfied that the Department knew that Ms Wearne was not in a good frame of mind, that she experienced anxiety and stress that had resulted in periods of leave in an attempt to recover her health, and that Ms Wearne was vulnerable to a psychiatric injury.

There was no evidence that the Department considered the implications for Ms Wearne's mental state and her psychological health when rejecting a team change. Further, the Department ought to have been aware that their decision not to transfer Ms Wearne was not assisting the proper management of her workplace wellbeing.

The Court accepted that, in all the circumstances, the Department knew, or ought to have known, of some, if not all, of the small incidents between Ms Wearne and Ms Skerry and that the cumulative effect of them was to unnecessarily increase the stress and anxiety experienced by Ms Wearne.

The Court considered that the Department 'paid lip service' to Ms Wearne's vulnerability to harming her mental health through her relationship with Ms Skerry but that consideration carried little weight in their deliberations. The suggestion that there 'could be benefits' for both of them in working through, rather than shifting, issues demonstrated that the substantial risk for Ms Wearne's health was not given proper consideration.

The Court was not persuaded that Ms Skerry's conduct constituted bullying, humiliation or harassment of Ms Wearne for the following reasons:

  • The incidents were 'manifestations of interpersonal conflict' between Ms Skerry and Ms Wearne rather than instances of bullying.
  • Ms Skerry's behaviour created a risk to Ms Wearne's mental health, but her directions were valid and reasonable.
  • Ms Skerry's management style was somewhat rigid and inflexible, and she was at times overly harsh and insensitive towards Ms Wearne, but her behaviour was not unreasonable.
  • When viewed as a whole, Ms Skerry's behaviour was not sufficiently repetitive to constitute bullying.

However, the Court found that the Department breached its duty of care and exacerbated Ms Wearne's psychological injuries when it failed to exercise the standard of care 'reasonably expected of an employer'.

The Court found that a reasonable employer would have appreciated the need to avoid injuring Ms Wearne's mental health. Further, the danger of Ms Wearne's deteriorating relationship with Ms Skerry was recognised by the Department and the Department's approach, that the two work it out like professionals, was held to be an 'abject failure'.

The Court considered the severity of Ms Wearne's psychological injury and that she had been incapable of working since her breakdown in 2008 in deciding to award her $210,000 in damages for pain and suffering and loss of enjoyment of life and $415,345 in pecuniary loss.


Employers are required to take reasonable steps to protect employees from mental illness or aggravation of mental illness. If an employer becomes aware that an employee is affected by significant mental health pressures, the employer is obliged to consider that factor in discharging their duty to take reasonable care.

Where there is a known and specific risk of psychiatric harm, employers should respond promptly to reduce that risk to avoid breaching their duty of care. To that end, employers need to have robust processes in place for handling bullying complaints and serious interpersonal conflicts, including (where appropriate) policies, training and guidance for managers to ensure appropriate management of mental health in the workplace.

© Cooper Grace Ward Lawyers

Cooper Grace Ward is a leading Australian law firm based in Brisbane.

This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please contact Cooper Grace Ward Lawyers.

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Belinda Winter
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