Patrick Stevedores (No 1) Pty Limited v Vaughan

Patrick Stevedores (No 1) Pty Limited (the employer) appealed to the Court of Appeal of New South Wales against a judgment awarding damages to Mr Vaughan (the employee) for psychiatric injury suffered during an industrial dispute. The employee alleged that the employer had breached its duty of care by failing to take reasonable steps to protect him from psychiatric harm arising from the employer's confrontation with the union.

The central legal issues before the Court of Appeal were whether the employer owed a duty of care to the employee to prevent psychiatric injury, whether that duty had been breached, and whether any economic benefit derived by the employer from its actions could outweigh its duty of care. The court was also required to consider whether there was any relevant distinction between the duty of care owed in respect of psychiatric injury compared to physical injury in the employment context, and whether the damages awarded were appropriate.

The Court of Appeal affirmed the employer's duty of care to take reasonable steps to prevent psychiatric injury to its employees, finding no material distinction between this and the duty to prevent physical injury. The court held that the employer's conduct in confronting the union, which led to the employee's psychiatric harm, was unreasonable and constituted a breach of its duty of care. The court rejected the argument that any economic benefit to the employer could excuse this breach, emphasizing that the employer's obligation to provide a safe working environment was paramount. The court found that the damages awarded were not excessive and upheld the original judgment.