On appeal from the Supreme Court of Western Australia
Representation:
A G Braddock SC with N J Mullany for the appellant (instructed by Marks & Sands)
B W Walker SC with D R Clyne for the respondent (instructed by Dibbs Barker Gosling)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Koehler v Cerebos (Australia) Ltd
Negligence – Duty of care – Psychiatric injury – Content of an employer's duty to an employee to take reasonable care to avoid psychiatric injury – Whether employer breached its duty to provide employee with a safe system of work by failing to take the steps identified by employee – Whether reasonable person in position of employer would have foreseen the risk of psychiatric injury to the employee – Relevance of employee's agreement to perform the work which brought about her injuries – Whether the law of negligence should be developed in such a way as to inhibit the making of agreements involving more work than an industry standard.
Contract – Contract of employment – Freedom of parties to stipulate that an employee will do more work than an industry standard – Whether the law of negligence should be developed in such a way as to inhibit the making of agreements involving more work than an industry standard.
McHUGH, GUMMOW, HAYNE AND HEYDON JJ.
The issue
The appellant was employed three days a week as a merchandising representative of the respondent (the employer). She could not perform the duties expected of her to her satisfaction. She repeatedly told management that changes had to be made. She said that the work expected of her had to be changed, or she should have more time in which to do it, or she should have help to do it. No changes were made.
Five months after starting this work the appellant fell ill. At first a physical disorder was suspected but further consideration revealed that the appellant was suffering a psychiatric illness. Her work was a cause of that illness.
Did the employer breach the duty of care it owed the appellant to provide her with a safe system of work?
In the District Court of Western Australia, Commissioner Greaves found that the appellant's workload was excessive, that the employer needed no particular expertise to foresee that there was a risk of injury to the appellant of the kind that ensued and that, by not increasing the appellant's hours of work or giving her assistance, the employer failed in its duty to ensure that all reasonable steps were taken to provide the appellant with a safe system of work.
On appeal to the Full Court of the Supreme Court of Western Australia (Malcolm CJ, McKechnie and…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Koehler v Cerebos (Australia) Ltd [2005] HCA 15
Case
[2005] HCA 15
Decision Date
CaseChat Overview and Summary
The High Court of Australia heard an appeal from Cerebos (Australia) Ltd concerning a claim for psychiatric injury brought by its former employee, Ms. Koehler. Ms. Koehler had accepted a position as a part-time merchandising representative after being retrenched from a full-time sales role. Her letter of engagement specified a 24-hour work week, but upon commencing her new duties, she was presented with a territory listing that she immediately stated was impossible to complete within the allocated hours. Despite her repeated oral and written complaints to management about the excessive workload and insufficient time, her concerns were not addressed, and no adjustments were made to her duties or territory. The employer's appeal to the Full Court of the Supreme Court of Western Australia had been allowed, with that court finding that the employer could not have reasonably foreseen the risk of psychiatric injury. Ms. Koehler then appealed to the High Court.
The central legal issues before the High Court were whether the employer breached its duty of care to Ms. Koehler by failing to provide a safe system of work, specifically by not taking steps to mitigate the risk of psychiatric injury. This involved determining whether a reasonable employer would have foreseen the risk of psychiatric injury given the circumstances, and the relevance of Ms. Koehler's agreement to perform the work that led to her injuries. The Court also considered whether the law of negligence should be developed in a way that would inhibit parties from entering into employment agreements that involved performing more work than an industry standard.
The High Court dismissed the appeal, upholding the decision of the Full Court of the Supreme Court of Western Australia. The Court reasoned that while an employer owes a duty of care to its employees to take reasonable steps to avoid psychiatric injury, the employer's duty is not to prevent all risk of injury, but only such risks as a reasonable employer would foresee. In this case, Ms. Koehler's complaints to management, while frequent, focused on the feasibility of completing the work within the given hours and did not suggest that her health was being adversely affected. The Court found that the employer could not reasonably have foreseen that Ms. Koehler was exposed to a risk of psychiatric injury. The Court also noted that the law should not be developed in a way that prevents parties from freely agreeing to terms of employment, including undertaking more work than might be considered standard, provided those terms are not otherwise unlawful.
The appeal was dismissed with costs.
Orders
Orders of the court
Appeal dismissed with costs.
Background
Background to the litigation
On appeal to the Full Court of the Supreme Court of Western Australia (Malcolm CJ, McKechnie and Hasluck JJ) that Court held[1] that the employer could not reasonably have foreseen that the appellant was exposed to a risk of psychiatric injury as a consequence of her duties at work. That being so, the employer's appeal was allowed. The appellant now appeals to this Court. The Full Court was right. The appeal should be dismissed.[1]Cerebos (Australia) Ltd v Koehler [2003] WASCA 322 at [75].The facts It is desirable to say a little more about the facts. 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). The letter "confirmed" her salary structure at a particular hourly rate, a car allowance of a stated amount per kilometre and said that "[o]ut of pocket expenses to support incidental expenditure [would] apply". The appellant's letter of engagement said nothing about the duties she was expected to perform. 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. It is not necessary to describe the appellant's complaints to management in any detail. It is enough to say that she complained orally and in writing on many occasions that she had too big an area, too many stores and very little time. Her weekly written reports sometimes recorded that she was working more than eight hour days. But all her complaints were directed to whether the work could be done; none suggested that the difficulties she was experiencing were affecting her health. She told management that there were two ways to solve the problems she was encountering: to reduce the number of stores she was to visit, or to have her work a fourth day. She nominated the stores that should be removed from her list and identified the representatives to whom they could be given. The employer took neither of the steps the appellant suggested and took no other action to alter the work expected of the appellant.