Vision Australia Ltd v Elisha

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2023 0018

VISION AUSTRALIA LIMITED	Applicant
v
ADAM ELISHA	Respondent

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JUDGES:	McLEISH, KENNEDY and MACAULAY JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	6 September 2023
DATE OF JUDGMENT:	1 November 2023
MEDIUM NEUTRAL CITATION:	[2023] VSCA 265
JUDGMENT APPEALED FROM:	[2022] VSC 754 (O’Meara J)

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CONTRACT – Breach – Respondent employed by applicant as adaptive technology consultant – Respondent alleged to have engaged in serious misconduct by reason of ‘aggressive and intimidating’ behaviour towards hotelier – Respondent stood down from employment and required to attend disciplinary meeting – Subsequent termination of employment – Alleged failure to give opportunity to deal with allegations about respondent’s character – Due process provisions contained in enterprise agreement and applicant’s disciplinary procedures – Whether parties objectively intended enterprise agreement and/or disciplinary procedures to form part of contract of employment – Whether relevant parts of disciplinary procedures intended to have contractual effect – Where judge held applicant breached contractual terms as incorporated – Judge’s findings affected by impressions about witnesses – Whether judge’s findings ‘glaringly improbable’ or ‘contrary to compelling inferences’ – No error established.

CONTRACT – Damages – Psychiatric harm – Damages for psychiatric harm in respect of breach of contract – Whether damages for psychiatric harm too remote – Whether damages not available at law – Least burdensome performance rule – Leave to appeal granted – Appeal allowed.

NEGLIGENCE – Whether applicant owed respondent duty of care with respect to processes leading up to and resulting in termination of respondent’s employment – Judge found duty not recognised at law – No error established.

Fair Work Act 2009 (Cth), s 392(4).

Hadley v Baxendale (1854) 9 Ex 341, Addis v Gramophone Co Ltd [1901] AC 488, Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64, Baltic Shipping Co v Dillon (1993) 176 CLR 344, Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144, Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193, Aldersea v Public Transport Corporation (2001) 3 VR 499, State of New South Wales v Paige (2002) 60 NSWLR 371, Russell v Trustees of the Roman Catholic Church for the Archdiocese of Sydney (2008) 72 NSWLR 559, Soliman v University of Technology, Sydney (2008) 176 IR 183, Shaw v State of New South Wales (2012) 219 IR 87, Commonwealth Bank of Australia v Barker (2014) 253 CLR 169, Romero v Farstad Shipping (Indian Pacific) Pty Ltd (2014) 231 FCR 403, Govier v The Uniting Church in Australia Property Trust (Q) [2017] QCA 12, European Bank Ltd v Evans (2019) 240 CLR 432, Lee v Lee (2019) 266 CLR 129, Martinez v Griffith [2019] NSWCA 310, Lloyd v Healthscope Operations Pty Ltd [2021] VSCA 327, Potter v Gympie Regional Council (2022) 313 IR 222, applied; Johnson v Unisys Ltd [2003] 1 AC 518, Goldman Sachs JBWere Services Pty Ltd v Nikolich (2007) 163 FCR 62, Moore v Scenic Tours Pty Ltd (2020) 268 CLR 326, considered.

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Counsel
Applicant:	Mr PM O’Grady KC with Mr LR Howard and Mr GA Worth
Respondent:	Mr JP Brett KC with Ms E Latif and Mr E Makowski
Solicitors
Applicant:	IDP Lawyers
Respondent:	Arnold Thomas & Becker

TABLE OF CONTENTS

PART A: INTRODUCTION

PART B: BACKGROUND

PART C: PROPOSED GROUNDS OF APPEAL

PART D: PROPOSED GROUND 1: WHETHER CLAUSE 47.5 OF THE VISION EA AND THE 2015 DISCIPLINARY PROCEDURE FORMED PART OF MR ELISHA’S CONTRACT OF EMPLOYMENT

Judge’s reasons

Vision’s submissions

Mr Elisha’s submissions

Consideration

PART E: PROPOSED GROUND 2: WHETHER MR ELISHA’S CONTRACT OF EMPLOYMENT WAS BREACHED

Judge’s reasons

Submissions

Consideration

PART F: PROPOSED GROUND 3: ASSESSMENT OF DAMAGES FOR BREACH OF MR ELISHA’S EMPLOYMENT CONTRACT

Judge’s reasons

Whether damages for psychiatric harm suffered by Mr Elisha were too remote (proposed ground 3(c))

Submissions

Consideration

Whether damages available at law for psychiatric harm in any event (proposed ground 3(b))

Judge’s reasons

Submissions

Consideration

The least burdensome performance rule (proposed ground 3(a))

PART G: NOTICE OF CONTENTION: WHETHER VISION OWED MR ELISHA A RELEVANT DUTY OF CARE

Judge’s reasons

Submissions

Consideration

PART H: CONCLUSION

APPENDIX 1: Vision 2015 Disciplinary Procedure

MCLEISH JA
KENNEDY JA
MACAULAY JA:

PART A: INTRODUCTION

On 29 May 2015 Adam Elisha’s employment with Vision Australia Limited (‘Vision’) was terminated by reason of alleged serious misconduct. The alleged conduct was constituted by Mr Elisha’s ‘aggressive and intimidating’ behaviour towards a member of hotel staff during an overnight stay at the Bairnsdale International Hotel in March 2015.
Mr Elisha subsequently issued proceedings claiming that he suffered psychiatric injury as a result of Vision’s implementation of processes leading to, and resulting in, the termination of his employment. He alleged that Vision had breached his contract of employment, or alternatively, was negligent.
On 13 December 2022, the trial judge found that Vision was liable to pay damages by reason of breach of contract. However, he rejected the claim based in negligence because he found that Vision did not owe the alleged duty of care to Mr Elisha.[1] He subsequently made orders on 15 December 2022, giving judgment for Mr Elisha in the sum of $1,442,404.50.
[1]Elisha v Vision Australia Ltd [2022] VSC 754 (‘Reasons’).
Vision seeks leave to appeal the orders made on 15 December 2022. By notice of contention, Mr Elisha also challenges the judge’s finding that there was no duty of care.
For the reasons that follow, we have determined that the judge erred in awarding the damages he did by reason of breach of contract, and made no error in holding that Vision did not owe the alleged duty of care. Accordingly, we will grant leave to appeal, allow the appeal, and set aside the orders for damages.

PART B: BACKGROUND

Vision is a not-for-profit organisation in the business of providing services to vision‑impaired persons.
Mr Elisha executed his employment contract with Vision on 27 September 2006, which took the form of a letter of offer executed on behalf of Vision (‘2006 Contract’). The letter commenced by stating: ‘We are pleased to offer you the full-time position of Adaptive Technology Consultant with Vision Australia’, and advised that the position was to commence on 9 October 2006.
After making provision for eligibility, a probationary period and the location of the position, the letter contained the following:
Conditions of Employment
Your engagement will be governed by the terms of this letter and the Community Employment, Training and Support Services Award 1999 [(‘the 1999 Award’)].
The letter went on to prescribe Mr Elisha’s normal hours of work (which ‘will be 38’) as well as his classification ‘in accordance with [the 1999 Award]’, his initial salary, superannuation, annual leave, sick leave and also made provision for long service leave.
The letter next contained a termination clause which read:
Termination
Either party may terminate this contract by giving one (1) month’s written notice. The Organisation reserves the right to require you to work out the notice period, pay you out in lieu of working or a combination of both.
The next relevant provision was as follows:
Other Conditions
In addition, Employment Conditions will be in accordance with regulatory requirements and Vision Australia Policies and Procedures. Breach of the Policies and Procedures may result in disciplinary action.
The letter also provided for a position description, which could ‘be varied as and when required’. There was also a clause which provided that Vision was ‘committed to conducting regular, formal performance reviews…’ and that Mr Elisha’s performance ‘will be measured against position objectives and key performance indicators’.
The last page of the letter contained Mr Elisha’s signature under the following:
ACCEPTANCE:
This contract may be amended from time to time by mutual agreement between the parties.
I have read and fully understand the terms and conditions of employment detailed in this contract. I agree to comply with these terms and conditions of employment and all other Company Policies and Procedures.
I certify that the details in my application/curriculum vitae are true and correct; and that I have no knowledge of any fact or circumstance, which may prevent fulfilment of the terms of this contract.
Mr Elisha continued in the position of ‘Adaptive Technology Consultant’ from 2006 until he was stood down in May 2015. The evidence was that his work involved setting up, or assisting, vision-impaired clients in respect of software and hardware systems. He was required to visit homes and workplaces throughout Victoria (among other locations).[2]
[2]Ibid [1]–[5].
Some of Mr Elisha’s written performance reviews were admitted into evidence. The judge found that they revealed a history of competent and reliable performance.[3] However, the judge also recorded:
(a)in about March 2008, Mr Elisha was the subject of an investigation relating to his misuse of a company computer. While serious consideration was given to terminating his employment, he appears to have been counselled, to have lost his capacity to use the company computer for personal purposes, and to have been issued a final warning;[4]
(b)in February 2010, he was the subject of an allegation of sexual involvement with a client, which was found to be unsubstantiated;[5]
(c)in late 2011, he lodged a grievance complaint about another employee, claiming ‘continuous bullying, intimidation and harassment’. Mr Elisha accessed the employee assistance program in relation to this grievance. Vision undertook a review and published a report, but the incident thereafter seemed to pass;[6] and
(d)in May 2014, Mr Elisha made a complaint to the General Manager, Leigh Garwood,[7] alleging ‘micromanagement’ and to having been ‘singled out’ by Janet Hauser, his manager (from January 2011–May 2015). Mr Garwood met with both parties separately and addressed the issues raised in an email to Mr Elisha. This email was then forwarded to Ms Hauser and Suzanne Eagle (a member of Vision’s ‘People and Culture’ department). By email in response, Mr Elisha stated that he was ‘only interested in a good working relationship and if that can be achieved from [Mr Garwood’s] meetings with [Ms Hauser] then [he is] happy to consider this matter resolved’.
[3]Ibid [5].
[4]Ibid [6].
[5]Ibid [7].
[6]Ibid [11].
[7]Mr Garwood has subsequently died.
In terms of Mr Elisha’s mental health:
(a)on 29 December 2014, Mr Elisha attended his general practitioner, who noted he had been complaining of anxiety ‘worse in the last 4 months’ and that he had to move house due to being ‘very sensitive to noise’. A mental health care plan was completed and he was prescribed Lexapro. He attended the clinic again in March 2015 and the general practitioner recorded that he was ‘feeling a lot better’ on Lexapro, but referred him to a psychologist;[8] and
(b)in the period March to July 2015, he had six sessions with clinical psychologist, Mr Jonathon Walker. Mr Walker’s records state that he treated Mr Elisha for ‘anxiety and depression’ and referred to his ‘significantly heightened sensitivity to particular sounds’, ‘chronic workplace stress’ and ‘interpersonal difficulties with particular staff members’ as factors predisposing him to anxiety.[9]
[8]Reasons, [14]–[16].
[9]Ibid [18].
There was no suggestion that these visits came to the attention of representatives of Vision.[10]
[10]Ibid [444].
The critical events which led to Mr Elisha’s dismissal occurred on 23 March 2015 during the course of an overnight stay at the Bairnsdale International Hotel while Mr Elisha was performing his duties in Bairnsdale (‘the 23 March incident’). At around midnight, Mr Elisha called the hotel after-hours number after hearing a noise that was keeping him awake. An interaction followed with Madlen Trch (one of the hotel proprietors). There was also a further interaction with Ms Trch when she entered his room and, subsequently, on check out the following morning.
At trial there was extensive evidence led about the 23 March incident. Suffice to say that Ms Trch considered Mr Elisha to have been aggressive and intimidating. However, the ultimate (unchallenged) finding made by the judge was that Mr Elisha was not objectively aggressive, threatening or frightening.[11]
[11]Ibid [147].
At some point after his attendance at Bairnsdale Mr Elisha went on a holiday to Vietnam. However, while he was away, two other employees of Vision (Helen McKinley and Fiona Jackson) stayed at the hotel on 5 May and became apprised of Ms Trch’s account of the 23 March incident. Those employees then reported the matter to their manager, Debbie Deshayes, who then reported the matter to Ms Hauser, describing it as being ‘of serious concern’.
Ms Hauser subsequently wrote an email dated 8 May 2015 to Michael Van Dyk, Vision’s human resources manager, copying in Ms Eagle, in which she stated:
I am forwarding the emails below to you, as the incident outlined by Deb Deshayes and her staff members constitutes a serious breach of VA’s values and staff behaviour.
Unfortunately, whilst this should surprise me, it doesn’t. I have had verbal reports to me about Adam’s aggressive behaviour in the past, and I have had conversations with him over the years, but he has always managed to make excuses and explain his actions. Most recently, I sent him an email requesting that he stop parking in the visitors car park, and he responded to me very aggressively. However, in this instance, there is no excuse.
Adam is away on annual leave at the moment, but I would like to speak with you as soon as possible about this.
On 8 May 2015, Ms Deshayes spoke with Ms Trch and apologised. On 9 May, she also emailed the substance of Ms Trch’s account to Ms Hauser and Ms Eagle.
On 10 May 2015, Ms Hauser then emailed Mr Garwood, stating:
I have been aware for some time that [Mr Elisha’s] behaviour has deteriorated (and I have addressed minor issues with him as they arose), but this is something else entirely. [Mr Elisha] is on annual leave until the 18^th May, and [Ms Eagle] is happy that she has some time to speak with [Ms Trch] and decide what action to take. I feel that this is gross misconduct and should be addressed accordingly. My apologies for sending this to you on a weekend, but I am at the airport on my way to Sydney for the regional managers [sic] induction, and thought I may not get much of an opportunity over the next two days. I will be back in the office on Wednesday morning. I will be on my mobile and could call you to discuss if you would prefer.
At some point Ms Eagle was allocated the role of investigating the 23 March incident (though she did not recall when). On 12 May 2015, Ms Eagle interviewed Ms Trch, and on 15 May 2015 Ms Deshayes and Ms Hauser wrote a letter to Ms Trch, asking her to accept their ‘sincere apologies’.
Upon returning from leave, on 19 May 2015, Mr Elisha was asked to, and did, attend Ms Hauser’s office where he was presented with a letter dated 18 May 2015 (‘the stand down letter’). The stand down letter required Mr Elisha to attend a meeting on 21 May,[12] and identified that the purpose of the meeting was to seek Mr Elisha’s response to a complaint Vision had received which alleged ‘serious misconduct’. It also alleged that Mr Elisha had breached a number of Vision’s policies, which were annexed,[13] and provided particulars of the alleged serious misconduct as follows:
1/ On or around the night of the 23^rd March 2015 at around 12.30am whilst staying at the Bairnsdale International hotel on Vision Australia business you behaved in a verbally aggressive and intimidating manner towards a Bairnsdale International staff member. The Bairnsdale International staff member felt humiliated and intimated by this behaviour.
At around 12.30am you phoned the night phone. When called back and asked what assistance you required you answered ‘I have a noise in my room fix it’. When the staff member asked you for a few minutes to get there you answered with words to the effect of ‘you better be’. The staff member arrived to your room (in her pyjamas) and you pointed to the corner of the room and stated that there was a ‘clicking noise’ and indicated it was from outside. When the staff member stated that she couldn’t hear anything and that there wasn’t maintenance staff on site to check outside you responded in aggressive and loud tones with words to the effect of ‘You’re the Manager you have to fix it, are you not able to do your job, are you not able to do any job, are you incapable of doing anything’. This verbal attack went on for several minutes. During this time the staff member was in the corner of the room and you were in front of the door. She felt intimated and humiliated by this behaviour and just ‘wanted to get out of the room’. To resolve the issue the staff member moved you to another room around 1am. You said ‘goodnight’ but not thank you.
2/ On or around the morning of the 24^th March 2015 whilst checking out of the Bairnsdale International you threw the room keys on the Reception desk in a rude and dismissive manner and left without saying anything. The Bairnsdale International staff member (the same one from the previous incident) felt humiliated by this behaviour.
As a result of this behaviour the Bairnsdale International Hotel has requested that you not stay there again.
[12]The meeting was subsequently delayed until 26 May.
[13]The stand down letter specifically alleged that Mr Elisha breached the following policies which were annexed to the letter: Vision’s ‘code of professional conduct policy’ dated June 2012; ‘Vision Australia’s values’ (referring to a letter from Vision to Mr Elisha dated 17 November 2014 concerning performance planning and appraisal, and an undated document entitled ‘Living the Values’ which stated the ‘Vision Australia Values’); and Vision’s ‘positive workplace behaviour policy (eliminating harassment, discrimination, workplace bullying, victimisation, and occupational violence)’ dated June 2008.
The stand down letter stated that Mr Elisha would be asked to respond to these allegations at the proposed meeting and that he was not to speak with any staff member regarding this matter (unless that person would be his support person at the meeting). In particular, he was not to approach any person in any way whatsoever whom he believed may also be involved ‘in this matter.’ This instruction was said ‘to ensure procedural fairness applies to the proceedings and to all involved in the matter.’ If he failed to adhere to this instruction, he would be subject to summary dismissal.
The stand down letter also advised Mr Elisha that due to the serious nature of the complaint the decision had been made to stand him down from his duties at Vision (on full pay) until the matter was concluded and stated:
Please note that this meeting is being conducted in accordance with the Due Process Clause (47.5) of the Vision Australia Unified Enterprise Agreement 2013 (refer Appendix 1). Please note that disciplinary action up to and including summary dismissal may be an outcome of this meeting.
As already indicated, there were a number of documents annexed to the stand down letter. These included clause 47.5 of the Vision Australia Unified Enterprise Agreement 2013 (‘the Vision EA’),[14] which was said to have ‘supplanted’ the 1999 Award referred to in the 2006 Contract. Additionally, there was Vision’s ‘disciplinary procedure’ dated April 2015 (‘the 2015 Disciplinary Procedure’).
[14]It was observed by senior counsel for Vision during oral submissions that the 2013 agreement would not have commenced operation at the relevant time such that the 2009 agreement was (strictly) applicable. However, he accepted that the relevant clauses were identical in the 2009 and 2013 agreements, and this was not disputed by Mr Elisha.

Clause 47.5 of the Vision EA relevantly provides:
47.5     Due Process
…
47.5.2Due process will commence with the employer advising the employee of:
a)The employer’s concerns with the employee’s conduct or performance;
b)       The time, date and place of the first due process meeting;
c)The employee’s right to be accompanied by a nominee of the employee’s choice at all due process meetings;
d)The employee’s right to terminate the employment should due process not resolve the employer’s concerns.
47.5.3 Due process meetings will:
a)Include discussion of the employer’s concerns with the employee’s conduct or performance;
b)Give the employee an opportunity to respond to the employer’s concerns;
c)Include discussions of any counselling or assistance, where appropriate, available to the employee;
d)       Include documentation, where appropriate;
e)       Set periods of review, as appropriate.
47.5.4If, following due process, the employee’s decision is to terminate the employment of the employee, then the employer must give notice in accordance with subclause 47.2.1.
The Vision Australia Disciplinary Procedure effective ‘April 2015’ is set out in full in Appendix 1 to these Reasons. Insofar as it deals with the procedural steps applicable in a formal disciplinary meeting it is substantially similar to clause 47.5 of the Vision EA, above.
As is self-evident, the stand down letter also did not suggest that Mr Elisha had conducted himself aggressively on any other occasions apart from during the 23 March incident.
Mr Elisha prepared a written response to the allegations as contained in the stand down letter in which he ‘vigorously den[ied] any such misconduct’ and stated that he ‘never behaved in any verbally aggressive nor intimidating manner’.
A meeting then took place on 26 May 2015 at which Ms Eagle and Ms Hauser were present. David Nunns, a branch organiser of the Australian Services Union (‘ASU’), also attended with Mr Elisha. Ms Eagle and Ms Hauser’s typed file note records that at the close of the meeting Ms Eagle said that ‘she would get back to [Mr Elisha and Mr Nunns] after speaking with [John Gow-Hills, General Manager of Vision’s ‘People and Culture’ department]’. The note also records the observations of both Ms Hauser and Ms Eagle that Mr Elisha ‘showed no remorse’.
On 26 May, Ms Eagle also provided documentation ‘for meeting tomorrow’ to Mr Gow‑Hills, Mr Garwood, Mr Van Dyk and Ms Hauser. That documentation included the file notes from the meeting of 26 May.
The evidence of Ms Eagle was that on 27 May, she made ‘findings’ concerning what happened during the 23 March incident. On that date, a further meeting also took place (‘27 May meeting’). There are no file notes of the 27 May meeting, but the judge essentially accepted that each of Ms Eagle, Mr Van Dyk, Mr Gow-Hills, Ms Hauser and Mr Garwood attended the meeting (given they each gave evidence about it).[15] Ms Eagle’s investigation findings were discussed and the attendees adopted her finding that Ms Trch’s account of events should be accepted. The judge found that the decision to terminate was probably made by Mr Gow-Hills, which Vision accepted in this Court.
[15]Reasons, [38], [203].
On 28 May, Ms Eagle received a letter from Mr Nunns concerning the meaning of ‘serious misconduct’ and which stated that the ASU would notify management of a dispute under the Vision EA if Mr Elisha was not returned to normal duties. Mr Nunns also sent a letter to Mr Van Dyk, dated 29 May, relating to representation at the meeting.
On 28 May, Ms Eagle forwarded the email attaching the ASU’s letter to Mr Gow-Hills and Mr Van Dyk, suggesting they discuss it and asking ‘does this change our proposed strategy?’.[16]
[16]Ibid [211].
By email from Mr Gow-Hills to Mr Van Dyk at 7:43 am on 29 May, he referred to the ASU’s letter and stated:
We will argue that [Mr Elisha’s] aggression in Bairnsdale is serious in itself and contributes to our assessment of ongoing risk to health and safety of others and to reputation. It is the latest example in a pattern of aggression that [Ms Hauser] can attest to. We do need to get those previous examples and patterns on the record. In addition [Mr Elisha] demonstrates no awareness that he was/is aggressive. Which adds to the unacceptable risk.
ASU will argue we can’t expand the matters we are considering but that is our choice not theirs.
We need to organise a phone meeting with them today to hear them out on our ‘pattern of aggression’ judgement. Phone meeting because [Mr Nunns] will declare himself unavailable to attend a in person meeting. He may also try that with a phone meeting. I guess if they dodge the meeting we should terminate without their response.
Later that day, Ms Eagle then sent a letter to Mr Elisha terminating his employment with Vision (‘the termination letter’). The termination letter relevantly stated:
Having reviewed the information available Vision Australia considers that on the balance of probability you did behave in the manner described by the complainant. The complainant reported this behaviour caused her to feel intimidated and humiliated. Vision Australia considers this behaviour to be serious misconduct as it;
•Damages Vision Australia’s reputation within the Bairnsdale community
•Caused a risk to the health and safety of a person
•Is a failure to uphold Vision Australia’s values
•Is a failure to follow a lawful and reasonable direction
•Has resulted in our loss of trust and confidence in your ability to undertake the role of Adaptive Technology Consultant
Therefore it has been decided to terminate your employment effective 29 May 2015. In accordance with Clause 47.2.5 of [the Vision EA] payment in lieu of notice will not apply in the case of serious misconduct.
On 26 June 2015, Vision also received a complaint that Mr Elisha had behaved rudely in relation to a 17-year-old client in Ballarat. The client was not called and neither Ms Eagle or Mr Gow-Hills gave evidence about the incident. The judge ultimately accepted Mr Elisha’s evidence (who denied that he had adopted a rude tone) and rejected the suggestion that the incident comprised ‘similar fact evidence’ that made it more likely that Elisha behaved in Bairnsdale in the manner contended for by Vision.[17]
[17]Ibid [118]–[120].
Prior to commencing proceedings in this Court:
(a)on 19 June 2015, Mr Elisha commenced unfair dismissal proceedings against Vision in the Fair Work Commission. On 9 July 2015, the parties entered into a deed of settlement resolving the proceeding. Pursuant to that deed, Vision was required to make a net payment to Mr Elisha of $27,248.68 (said to be equivalent to 26 weeks of pay);[18]
(b)Mr Elisha also issued a Magistrates’ Court proceeding in respect of his statutory benefits which was heard in February 2017;[19] and
(c)there have been two occasions on which a medical panel has determined medical questions in relation to Mr Elisha.[20]
[18]Vision’s claim based on estoppel by reference to this deed was rejected and not challenged on appeal: Ibid [294].
[19]Ibid [44].
[20]Ibid [45].
On 27 August 2020, Mr Elisha then commenced proceedings in the Trial Division of the Supreme Court.[21]
[21]Ibid [46].
By his amended statement of claim dated 8 June 2022, Mr Elisha alleged that his contract of employment incorporated certain provisions, which critically included provisions for due process as contained in clause 47.5 of the Vision EA and the 2015 Disciplinary Procedure (cited above). He also alleged that Vision owed him a duty to ensure that reasonable care was taken for his safety.[22] His allegations of breach included an allegation that Vision had failed ‘to provide maintain and/or enforce a safe system of investigation and/or [conducted] its investigation carelessly and/or in [a] manner that likely would injure the Plaintiff psychologically’. He alleged that, as a result of the breach of contract or breach of the alleged duty of care he had suffered injury, loss and damage which included a major depressive disorder.
[22]Paragraph 8 alleged that at all material times Vision owed Mr Elisha a non-delegable duty as his employer to take reasonable care for the safety of Mr Elisha whilst he was performing his work for Vision and to ensure that reasonable care was taken for his safety so as to avoid a real and foreseeable risk of injury including psychiatric injury.
By an amended defence dated 15 June 2022, Vision generally denied the allegations against it, and specifically alleged that neither the 2015 Disciplinary Procedure, nor the Vision EA, formed part of Mr Elisha’s contract of employment or were contractual in nature. It further stated:
insofar as [Mr Elisha] asserts a common law duty of care on the part of the employer in respect of matters concerning the termination of [Mr Elisha’s] contract of employment, as distinct from performance under that contract, the asserted duty is not recognised by the common law.
The trial was conducted over 17 sitting days between 6 June and 7 October 2022.
As indicated already, on 15 December 2022, the judge made orders requiring Vision to pay Mr Elisha damages in the sum of $1,442,404.50 on the basis of his claim in contract, but rejected the claim in negligence.[23]
[23]Although these orders were initially stayed temporarily, an application for a further stay was refused in Vision Australia Ltd v Elisha [2023] VSCA 70.

PART C: PROPOSED GROUNDS OF APPEAL

Vision seeks leave to appeal on the following three proposed grounds of appeal:
Ground 1.The judge erred in finding that clause 47.5 of the Vision EA and the 2015 Disciplinary Procedure formed part of Mr Elisha’s contract of employment.
Ground 2.The judge erred in finding that Vision breached Mr Elisha’s contract of employment (either clause 47.5 of the Vision EA or the 2015 Disciplinary Procedure).
Ground 3.The judge erred in failing to conclude that, if Vision breached Mr Elisha’s contract of employment:
(a)damages, properly assessed, would be a maximum of one month’s pay;
(b)damages were not available at law for any psychiatric harm suffered by Mr Elisha; and
(c)damages for psychiatric harm suffered by Mr Elisha were too remote.
By notice of contention dated 20 March 2023, Mr Elisha also contends that the judgment should be affirmed on a ground of law which was erroneously decided as follows:
The judge erred by holding that Vision did not owe a duty of care to Mr Elisha to take reasonable care to avoid injury to Mr Elisha in its implementation of the processes leading to and resulting in the termination of Mr Elisha’s employment, and in failing to find that Mr Elisha was entitled to judgment accordingly.

PART D: PROPOSED GROUND 1: WHETHER CLAUSE 47.5 OF THE VISION EA AND THE 2015 DISCIPLINARY PROCEDURE FORMED PART OF MR ELISHA’S CONTRACT OF EMPLOYMENT

Judge’s reasons

In considering the question of incorporation, the judge referred to the recent decision of this Court in Lloyd v Healthscope Operations Pty Ltd (‘Lloyd’),[24] which stated that the question of whether relevant parts of a disciplinary procedures document are contractually binding turns on the answers to three questions:
(a)first, whether the document was incorporated into the contract by express reference;
(b)secondly, if the document was not incorporated by express reference, whether it could be objectively concluded that the parties intended it to form part of the contract; and
(c)thirdly, if the document was part of the contract, whether it could be objectively concluded that the parties intended the relevant part of the document to have contractual effect.[25]
[24][2021] VSCA 327.
[25]Reasons, [319], citing Lloyd [2021] VSCA 327, [90] (Beach and Osborn JJA and Forbes AJA).
The judge also recorded that it was common ground that the question of whether any, and if so which, of the documents were incorporated into the contract of employment was to be guided by:
an objective consideration of the intentions of the parties in light of the text, context, object and circumstances surrounding the making of the contract. In that regard, the words of the contract are plainly a very important starting point, as are the terms of the documents sought to be relied upon as incorporated.[26]
[26]Ibid [321] (citations omitted).
The judge then summarised a number of cases,[27] including Riverwood International Australia Pty Ltd v McCormick (‘Riverwood’),[28] Goldman Sachs JBWere Services Pty Ltd v Nikolich (‘Nikolich’)[29] and Romero v Farstad Shipping (Indian Pacific) Pty Ltd (‘Romero’).[30] He included summaries of cases in which it was alleged that the contract of employment incorporated the terms of an industrial award or agreement,[31] including Byrne v Australian Airlines Ltd (‘Byrne’),[32] Automotive, Food, Metals Engineering, Printing and Kindred Industries Union v Mechanical Engineering Services Pty Ltd (‘Mechanical Engineering’)[33] and Gramotnev v Queensland University of Technology (‘Gramotnev’).[34] He acknowledged that ‘special considerations of context’ may affect whether an industrial agreement or instrument may be found to be incorporated into a contract.[35]
[27]Ibid [322]–[344].
[28](2000) 177 ALR 193; [2000] FCA 889.
[29](2007) 163 FCR 62; [2007] FCAFC 120.
[30](2014) 231 FCR 403; [2014] FCAFC 177.
[31]Reasons, [345]–[355].
[32](1995) 185 CLR 410; [1995] HCA 24.
[33][2007] FCA 1736.
[34](2015) 251 IR 448; [2015] QCA 127.
[35]Reasons, [356(g)].
In turning to this particular case, the judge considered that he should commence with the object, terms and context of the 2006 Contract.[36]
[36]Ibid [357].
He observed that there was little evidence adduced concerning the making of the 2006 Contract, and that he could not conclude that any award, enterprise agreement or policy was supplied to Mr Elisha or signed by him at the time at which that contract was made. He accepted that the applicable policies and procedures were available on Vision’s intranet, but that ‘otherwise’ such policies seem to have been provided or identified when specifically relevant and required.[37]
[37]Ibid [358]–[359], [366].
In terms of the context and object of the 2006 Contract the judge found:
As I have earlier noted, it was essentially common ground that the nature of [Mr Elisha’s] position required him to interact with the vision impaired in their homes and workplaces and, from time to time, in regional Victoria and interstate.
In that sense, the object of the contract of employment was to regulate the employment relationship between [Mr Elisha] and [Vision], specifically in connection with the position which he was employed to hold.
Further, in respect of such a position, it would be reasonable to contemplate that [Vision] would have policies bearing upon ‘conduct’ or ‘values’ as well as procedures for counselling, warning and dismissal if [Mr Elisha] were not to behave in accordance with such values.[38]
[38]Ibid [368]–[370].
He noted that Mr Elisha had tendered a ‘code of professional conduct policy’ dated November 2004. Although it bore the date of June 2008, he inferred from the form of the document and the 2006 Contract that there was a form of Vision’s ‘code of professional conduct policy’ in existence at the time the 2006 Contract was made.[39]
[39]Ibid [372].
The judge observed that the policy contained a clause which stated that in fulfilling duties ‘we shall maintain the highest ethical standards and will act in an honest and professional manner’ (clause 1).[40] The policy also provided that non-compliance with the code may result in counselling and/or or disciplinary measures including termination and referred to ‘Counselling, Warning, Dismissal Policy and Procedures’ and the relevant sections of the ‘Staff Manual’.[41]
[40]Ibid [373].
[41]Ibid [374].
The judge found:
In short, the form of policy suggests that at the time at which [Mr Elisha’s] contract of employment was made, employees of [Vision] were required to act in accordance with certain specified values or behavioural norms and may face disciplinary action in the event of a failure to do so, but that written policies and procedures would regulate the conduct of any such disciplinary action.
No witness suggested that such a position was not in existence in September 2006 and all relevant witnesses plainly considered [Mr Elisha] to have been bound by [Vision’s] policies and procedures applicable from time to time (including [Mr Elisha] himself).[42]
[42]Ibid [375]–[376].
The judge emphasised that several of Vision’s witnesses highlighted the culture of Vision, the vulnerability of the clients and consequent behavioural expectations and requirements inherent in a position of the kind held by Mr Elisha. He stated:
None of that to which I have referred tended to suggest that the substance of the behavioural expectations and requirements of [Mr Elisha] in connection with his position or, the reasonable expectations in respect of the applicable disciplinary procedures in the event of any contention that such a requirement had been breached, was qualitatively any different at any time between the making of the contract of employment in about September 2006 and the procedures involving [Mr Elisha] in May 2015.
…
Indeed, I consider it to be reasonable to conclude that the expectations to which I have referred were held by [Mr Elisha] and [Vision] at the time the contract of employment was made in September 2006 and at all relevant points thereafter.[43]
[43]Ibid [381], [383].
The judge then returned to the text of the 2006 Contract. He noted that the clause entitled ‘Conditions of Employment’ uses the word ‘governed’ in connection with the Award.[44] He considered that this might suggest that the Award was not specifically incorporated into the contract of employment.[45] However, the clause also refers to the engagement being ‘governed’ by the ‘terms of the letter’.[46] In the judge’s view, the terms of the letter are plainly proposed, and would be taken objectively, to have been contractual. He reasoned that it therefore follows that no special significance should be attached to the use of the word ‘governed’ as opposed to any other word that would signify that the engagement would be regulated by the terms stated in the letter as well as the applicable award.[47] He also considered that at least the pay and classification the subject of the then applicable award seem to have been contemplated as being contractual. It followed that, as in Gramotnev, the contract of employment seems to have contemplated that at least parts of the relevant award will be contractual.[48]
[44]See [8] above.
[45]Reasons [388], citing Mechanical Engineering [2007] FCA 1736, Soliman v University of Technology, Sydney (2008) 176 IR 183; [2008] FCA 1512 (‘Soliman’) and McDonald v Parnell Laboratories (Aust) (2007) 168 IR 375; [2007] FCA 1903.
[46]Reasons, [388].
[47]Ibid [389].
[48]Ibid [390].
The judge next turned to the clause entitled ‘Other Conditions’.[49] He highlighted the title of the clause and that it specifically referred to ‘Employment Conditions’. He considered that, in context, the reference to ‘Employment Conditions’ in this clause would not reasonably be taken to refer only to the earlier clause titled ‘Conditions of Employment’.[50]
[49]See [11] above.
[50]Reasons, [392]–[394].
The judge considered that the ordinary meaning of the words ‘will be in accordance with’ suggest that the employment relationship will be conducted in a manner that complies with the classes of rules there specified — being ‘regulatory requirements’ and ‘Vision Australia Policies and Procedures’. He considered that the words ‘in accordance with’ are ‘little or no different in ordinary meaning’ to the words ‘abide by’ considered in Riverwood, or ‘to be observed’ considered in Romero. He observed that in Riverwood and Romero such words were considered to be capable of operating to incorporate specified documents if the relevant terms were ‘contractual’.[51]
[51]Ibid [396]–[397].

The judge further considered that the reference to ‘regulatory requirements’ should reasonably be read to embrace the classes of requirements earlier specified in the clauses of the 2006 Contract, including the 1999 Award. He considered that the promise in the 2006 Contract is that the conditions of engagement ‘will be’ regulated in accordance with such requirements and the parties might objectively be thought to have contemplated that such ‘requirements’ might be modified during the period of engagement, but that the engagement would continue to be conducted ‘in accordance with’ them, even if so modified.[52]
[52]Ibid [398]–[399].
The judge also considered that it followed that the reference to ‘Vision Australia Policies and Procedures’ is to be similarly understood, ie, the employment relationship must be conducted ‘in accordance with’ the policies in existence at the time of making the contract, albeit that the content was capable of modification over time. Further, he considered it significant that the clause makes specific reference to the consequences of breaches of the ‘Policies and Procedures’, namely, that it ‘may result in disciplinary action’. Thus, the clause plainly contemplates that the ‘Policies and Procedures’ have a specific operation in respect of the discipline of employees that has the capacity to affect the ‘quality and continuance of the employment relationship’, with the nature of that specific operation to be found in the ‘Policies and Procedures’.[53]
[53]Ibid [401]–[402].
In the judge’s view, the operation of the contract in this way was confirmed by the form of the acceptance clause. While Vision had highlighted the part of the acceptance clause that states that the contract ‘may be amended from time to time by mutual agreement’, and contended that the contract had not been so amended to ‘bring in’ the Vision EA or any altered ‘Policies and Procedures’, the judge noted that Mr Elisha’s pay nonetheless seemed to have changed over time despite the contract not being formally amended.[54] He considered that the terms of the contract contemplated that the employment relationship would continue to be regulated by awards, policies and procedures even if those requirements were altered over time. The judge found that it was not necessary for the contract to have been amended by ‘mutual agreement’, as the parties at the outset had agreed that the contract would be ‘flexible enough to accommodate modification in the identified sources and requirements over time’.[55]
[54]Ibid [403]–[404].
[55]Ibid [405]–[406].
The judge then moved on to consider the final part of the acceptance clause, which confirms that Mr Elisha was required to agree that he would ‘comply’ with the ‘Company Policies and Procedures’. He considered that the word ‘comply’ tends to confirm the earlier and specific meaning of the words ‘in accordance with’, that is, that Mr Elisha will comply with requirements specified over time. The judge considered that this confirmed that such specific requirements are incorporated into the contract if they are ‘contractual’.[56] Further, he considered that the fact that the acceptance clause required Mr Elisha to agree to ‘comply’ with the ‘Policies and Procedures’ suggests that he should be taken ‘to have accepted the implicit offer of [Vision] to accept its mutual obligation in accordance with the provision of its “Policies and Procedures”’.[57] He found that the object, terms and context of the 2006 Contract present as being ‘in the nature of a bargain with an exchange of undertakings and assurances or promises’, particularly in respect of the ‘Policies and Procedures’ and any ‘disciplinary action’.[58]
[56]Ibid [407].
[57]Ibid [408], citing Riverwood (2000) 177 ALR 193, 213 [107] (North J); [2000] FCA 889.
[58]Reasons [409], citing Romero (2014) 231 FCR 403, 420 [57] (Allsop CJ, Rares and McKerracher JJ); [2014] FCAFC 177.
Thus, the judge concluded that the contract ‘may be taken to have operated to incorporate the industrial instruments — such as the Vision EA — and ‘Policies and Procedures’ over time, subject to the relevant parts of those documents being “contractual”’.[59]
[59]Reasons, [410], consistent with the third question in Lloyd [2021] VSCA 327.
The judge then turned to whether clause 47.5 of the Vision EA or the 2015 Disciplinary Procedure were ‘contractual’.[60]
[60]Reasons, [411].
He observed that clause 47.5 of the Vision EA is in very similar terms to the relevant parts of the 2015 Disciplinary Procedure.[61]
[61]Ibid [414].
The judge rejected Vision’s submission that the 2015 Disciplinary Procedure was expressed in aspirational language and is not capable of giving rise to enforceable contractual obligations. He found that, while some of the opening paragraphs of the document contain expressions of commitment that might be said to be ‘aspirational’, it does not follow that the operative parts of the document do not stand as contractual terms.[62]
[62]Ibid [414], [416].
The judge also rejected a submission that the 2015 Disciplinary Procedure was separate and distinct from the ‘contract provisions’ by reason of the opening paragraphs in the 2015 Disciplinary Procedure (which distinguished ‘this procedure’, from ‘all relevant industrial instruments and contract provisions’). He did not consider that a recital in a much later document displaced his conclusion that the contract contemplates that part of the then current and subsequent industrial instruments and Vision Australia Policies and Procedures will be contractual.[63]
[63]Ibid [417]–[418].
The judge then considered the balance of Vision’s submissions, which were directed to the parts of the 2015 Disciplinary Procedure that use words such as ‘may’, ‘should’ and ‘not appropriate’. He accepted that parts of that procedure use these or similar words. However, in his view, significant parts of the procedure amount to ‘a responsive assurance’, as in Romero, in the nature of a promise that in the event of disciplinary action Vision will act in a specific way.[64] In particular, the judge considered the following was ‘quite clearly’ stated:
[64]Ibid [420].
(a)where the concern raised in relation to an employee is of a serious nature, ‘a formal disciplinary meeting will occur’;
(b)in that event, the employee will be provided with a letter containing ‘a written outline of the allegations’;
(c)the letter will request that the employee attend a meeting ‘to respond to the allegations’ and indicate that the employee may have a support person present;
(d)the letter will also indicate that disciplinary action up to and including termination may occur;
(e) the meeting will be attended by up to two management representatives;
(f)at the meeting, a discussion will occur and the employee will be given an opportunity to respond to the allegations;
(g) following the meeting, [Vision] will make a decision; and
(h)[Vision] will advise the employee of the decision and a written record of the decision will be placed on the employee’s file.[65]
[(the‘relevant contractual terms’)].
[65]Ibid.
The judge observed that the 2015 Disciplinary Procedure consistently uses the word ‘will’, with the language being promissory and the sequence of steps reading as obligatory. He did not consider that the steps were ‘guidelines’. He considered that there was nothing ‘“discretionary”, “aspirational” or unclear about the language used’, but rather that it is ‘quite clear and prescriptive’.[66] He found that the same could be said about the relevant parts of clause 47.5 of the Vision EA.[67]
[66]Ibid [421].
[67]Ibid [422].
The judge reasoned that, as in Romero, the terms referred to are ‘promises of a contractual kind in exchange for the correlative behavioural requirements imposed by the other policies of [Vision] directed to “values” and the like’. He considered that the terms were and are contractual in kind and reflect a ‘bargain essentially struck’ when the parties entered into the 2006 Contract.[68]
[68]Ibid [423].
The judge observed that the relevance of ‘one to the other’, and the ongoing nature of the bargain earlier struck, is demonstrated by the reference to clause 47.5 of the Vision EA in the stand down letter and the other policies and procedures attached to that letter.[69] He further observed that an assumption in much of the evidence, and the submissions advanced on behalf of Vision, was that the 2015 Disciplinary Procedure attached to the stand down letter was ‘no more than the flip side’ of the allegation that Mr Elisha may have breached provisions of the various policies attached to the letter. In none of the evidence or Vision’s submissions, was it suggested that the fact that the ‘value’ of being, for example, ‘person centred’, appearing in the ‘Vision Australia Values’ document, should be taken to mean that Vision or Mr Elisha understood such a ‘value’ to be ‘discretionary’, ‘aspirational’ or ‘equivocal’. He observed that Mr Gow‑Hills stated ‘quite directly’ that he believed Mr Elisha had breached that value and that consequently his employment had been correctly terminated.[70]
[69]Ibid [424].
[70]Ibid [425]–[426].
Ultimately, the judge held that the plain, clear, and unequivocal terms contained in the 2015 Disciplinary Procedure should not be understood as merely ‘discretionary’, ‘aspirational’ or ‘equivocal’ and therefore not ‘contractual’. It followed that the terms to which he had referred (whether in clause 47.5 of the Vision EA or the 2015 Disciplinary Procedure) were contractual and incorporated into the employment relationship by operation of the terms in the 2006 Contract.[71]
[71]Ibid [427]–[428].

Vision’s submissions

Vision first emphasised the contextual setting of the 2006 Contract, highlighting that at the time of entry into 2006 Contract, the Workplace Relations Act 1996 (Cth) (‘WRA’) provided for a range of statutory minimum requirements. Hence, awards such as the 1999 Award set down detailed and prescriptive entitlements. This was to be compared with the limited number of modern awards underpinned by the National Employment Standards (‘NES’) prescribed in pt 2-2 of the Fair Work Act 2009 (Cth) (‘FWA’). If employees wished to pursue terms and conditions in excess of these minimum standards, they did so by bargaining at the enterprise level, which is how the Vision EA was made.
Vision emphasised that pt 2-1 of the FWA provides for an employer’s obligation to comply with the NES, modern awards and enterprise agreements. In the context of such statutory architecture it is ‘unnecessary’ for the contract of employment to provide for the matters already the subject of prescription.
Vision also emphasised that the relevant context included the statutory unfair dismissal regime. Absent a ‘clearly expressed intent to the contrary’, it is unlikely that a disciplinary policy would have contractual effect. Rather the policy serves the parties’ interests by facilitating compliance with statutory obligations. This is reflected in the 2006 Contract which gives the parties the right to terminate on one month’s notice. It says nothing about summary dismissal or the manner of dismissal which matters are the subject of statutory, award and enterprise agreement obligations.
More specifically, in terms of whether there was an incorporation of the Vision EA, Vision submitted:
(a)that the 2006 Contract is comparable to the language of the relevant contracts considered in Lloyd, Soliman, BHP Iron-Ore and Cliffe v Hoechst Australia Ltd.[72] In particular the phrase ‘governed by’ was found in Soliman to merely constitute a statement of legal position that the employer was bound by the relevant instruments. Hence the judge was wrong to conclude that the phrase ‘governed by’ incorporated the 1999 Award. The words were intended as a simple acknowledgement as to where one goes to find the obligations. The disjunctive ‘and’ separated the reference to the terms of the letter and the 1999 Award. The heading ‘Conditions of Employment’ was further apt to cover conditions from statute, an award or enterprise agreement;
(b)that the judge seemed to have wrongly concluded that the statutory significance of an award or enterprise agreement was not relevant. There needed to be clear expression before a court should find that the objective intent was to convert wide ranging statutory conditions into contractual terms;
(c)that, while the judge also relied on the phrase ‘regulatory requirements’ to incorporate the Vision EA, the expression ‘regulatory requirements’ was so vague and ambiguous as to be incapable of supporting incorporation. Vision emphasised the wide range of regulations which might be included, which extended to regulations touching on services provided by Vision. It was commercial nonsense to suggest that reasonable persons intended the entire scope of all potential awards, along with other requirements in legislation, to be incorporated into the 2006 Contract;
(d)that the Vision EA is a different type of instrument to the 1999 Award and made under a different statutory regime. The Vision EA could also not be said to be a ‘regulatory requirement’ as it is the product of a negotiated outcome approved by a majority of employees and the Fair Work Commission; and
(e)that the phrase ‘in accordance with’ is ambiguous like the phrase ‘subject to’ in Lloyd.[73] The 2006 Contract also does not address the consequences of any breach of the ‘regulatory requirements’. Hence the 2006 Contract does no more than acknowledge or recognise any existing statutory or regulatory obligations to comply with ‘regulatory requirements’. In oral submissions, senior counsel highlighted that the phrase ‘in accordance with’ is also used in respect of the ‘Salary & Classification’ clause which provides for the classification of an employee under an award, but does not incorporate the award.
[72]Lloyd [2021] VSCA 327, [92] (Beach and Osborn JJA, Forbes AJA); Soliman (2008) 176 IR 183, 199–200 [70]–[73] (Jagot J); [2008] FCA 1512; BHP Iron-Ore Pty Ltd (2001) 106 FCR 482, 552 [251]–[253] (Kenny J); [2001] FCA 3; Cliffe v Hoechst Australia Ltd [1996] IRCA 514 (Marshall J).
[73]Lloyd [2021] VSCA 327, [92] (Beach and Osborn JJA, Forbes AJA).
In terms of whether there was incorporation of the 2015 Disciplinary Procedure, Vision submitted:
(a)that although it was open to the parties to mutually agree to vary the contract to refer to the 2015 Disciplinary Procedure, they did not do so. This suggests that the procedure was simply intended to facilitate compliance with statutory unfair dismissal obligations and award and enterprise agreement obligations. Senior counsel emphasised that the reference to policies was just ‘informative’ and ‘facilitative’ in the sense that it facilitates compliance with the Vision EA. This was supported by the direct correlative relationship between the steps in the policy and each of the matters to be considered under s 387 of the FWA;
(b)that the express terms of the contract do not refer to the 2015 Disciplinary Procedure and the use of the words ‘will be’ does not extend the subject of the obligation to any future versions of a policy;
(c)that the signed acceptance obliged only Mr Elisha, and not Vision, to ‘comply with’ the policies. This is also supported by the clause under ‘Other Conditions’ which identifies possible ‘disciplinary action’ for non-compliance and which could only contemplate action taken against Mr Elisha. In oral submissions, senior counsel also submitted that the letter of offer constitutes a lawful and reasonable direction from the employer to the employee to comply with Vision policies. However, this does not incorporate the policies themselves into the contract; and
(d)that the judge also erred in having regard to post-contractual events when examining contractual intent. Further, the payments to Mr Elisha in accordance with the 1999 Award and provision of a copy of clause 47.5 of the Vision EA and the 2015 Disciplinary Procedure says nothing as to the parties’ intent. The more compelling inference is that Vision was seeking to fulfil its statutory obligations and protect itself against claims of breach of the Vision EA or unfair dismissal proceedings.
In terms of whether each of the Vision EA, or the 2015 Disciplinary Procedure, was intended to be contractual, Vision relied on its submissions made to the judge. These submissions emphasised that the language used was discretionary, descriptive and equivocal. Further, there was a lack of prescription and brevity associated with the procedural steps identified in respect of disciplinary procedure.
Senior counsel emphasised two points in oral submissions. First, having regard to the setting, the 2015 Disciplinary Procedure was clearly only intended to support compliance with the Vision EA and unfair dismissal laws. Secondly, the language was not prescriptive.

Mr Elisha’s submissions

Mr Elisha submitted that the judge applied the correct principles in determining the incorporation question. In particular, he emphasised that there are good reasons why parties may wish to incorporate aspects of an employer’s disciplinary process into a contract of employment. From an employee perspective there is no standalone right to procedural fairness prior to dismissal, and the statutory remedy for unfair dismissal is very limited. For employers, a promise to comply with policy is a quid pro quo for the employee’s promise to act in accordance with the employer’s expectations and workplace values.
Mr Elisha submitted that the ‘Conditions of Employment’ clause deals with the conditions as they are known at time of contract. The ‘Other Conditions’ clause brings in future regulatory requirements and also policies.
Mr Elisha also emphasised that the purpose of the 2006 Contract was to regulate the employment relationship and that his role required him to interact with vision-impaired clients in their homes and workplaces. It was reasonable to contemplate that Vision would have policies bearing on conduct or values as well as procedures for dismissal if Mr Elisha did not conform to those values.
Mr Elisha submitted that the judge expressly acknowledged that particular difficulties can arise where a document otherwise has statutory effect and that he did not treat the statutory operation of the Vision EA as irrelevant. However, the test is not one of necessity but rather of the objective intention of the parties. Parties are free to contract on the terms of an enterprise agreement even if that agreement may have statutory operation outside a contract. Mr Elisha rejected the suggestion that some special rule applies whereby workplace agreements are incapable of incorporation.
In terms of the words used, a bare submission that a phrase is vague is unlikely to be determinative since the court’s task is to make sense, if possible, of the document. In any event, the judge found that ‘regulatory requirements’ embraced the classes of requirements specified in the 2006 Contract. In oral submissions, counsel referred to those matters outside the parties’ private agreement that bear upon the terms and conditions of employment otherwise dealt with in the 2006 Contract (e.g. under the 1999 Award and pursuant to superannuation obligations). The words ‘will be’ meant the parties contemplated that such requirements might be modified so long as they had contractual effect. Hence the third question posed by Lloyd has a limiting effect.
Mr Elisha also submitted that the fact that the 2006 Contract could be formally varied, but was not, did not mean the parties did not intend to be bound by the relevant documents in the form in which they existed during the currency of the employment. The judge found that the parties agreed at the outset that the 2006 Contract would be flexible enough to accommodate modification.

Consideration

The correct approach is not in dispute. The task of the court is to objectively determine the meaning of the 2006 Contract, taking into account what reasonable persons would have intended to convey by the words chosen. That objective assessment is conducted having regard to the text, context and purpose of the 2006 Contract.[74] The language and circumstances surrounding the making of the 2006 Contract are also unique such that the application of these principles in other cases is of limited utility.
[74]Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, 116 [46] (French CJ, Nettle and Gordon JJ); [2015] HCA 37.
As indicated already, the judge found that the object of the 2006 Contract was to regulate the employment relationship in connection with Mr Elisha’s position. That position required him to interact with vulnerable vision-impaired persons in their homes and workplaces.
The judge also accepted that Mr Elisha was not provided with any award or policy at the time the 2006 Contract was made, although the policies and procedures were available on Vision’s intranet. However, he did find that, at the time of the making of the 2006 Contract, and thereafter, employees were required to act in accordance with certain specified values or behavioural norms and could face disciplinary action in the event of a failure to do so, but that written policies would regulate the conduct of any such disciplinary action.
Turning next to the text of the 2006 Contract, we do not consider that the statement that the engagement will be ‘governed by’ the 1999 Award (under ‘Conditions of Employment’), was intended to incorporate the 1999 Award, nor the Vision EA.
First, as observed by the judge,[75] there is authority which suggests that the phrase, ‘governed by’, is insufficient to incorporate an award into a contract of employment.[76] This is because the phrase, ‘governed by’, is not couched in terms of a promise, but purports to simply record facts. This is particularly the case with respect to an award which has its own distinct operation at law independent of any contract of employment.[77]
[75]Reasons, [348], [388].
[76]Mechanical Engineering [2007] FCA 1736, [15] (Finkelstein J); Soliman (2008) 176 IR 183, 198–9 [66]–[68] (Jagot J); [2008] FCA 1512.
[77]Byrne (1995) 185 CLR 410, 420–1 (Brennan CJ, Dawson and Toohey JJ); [1995] HCA 24.
Secondly, although the words ‘governed by’ are also used in respect of the terms of the letter — which are clearly intended, at least in part, to have contractual operation — this is insufficient to incorporate the 1999 Award. Rather, the words, ‘governed by’ are again simply recording the fact that the employment relationship operates within a legal framework which is affected by obligations identified in the contract as well as under the award.[78]
[78]Commonwealth Bank of Australia v Barker (2014) 253 CLR 169, 178 [1] (French CJ, Bell and Keane JJ); [2014] HCA 32.
Thirdly, even if the clause could be seen as incorporating the 1999 Award, it is not intended to incorporate the subsequent Vision EA. While the 1999 Award was made under the regime provided for in the WRA, the Vision EA is a very different type of instrument made under a different statutory regime, namely, the FWA. Thus, the Vision EA is a product of a negotiated outcome, approved by a majority of employees to be covered by it.[79] An enterprise agreement is a means by which employees could pursue terms and conditions above those minimum standards in the modern awards and the NES.[80] By way of contrast, the 1999 Award set down prescriptive entitlements for a specific industry / occupation, as a means to ensure that the minimum safety net entitlements were protected.[81] For reasons analogous to those given by Jagot J in Soliman, we do not consider that the reference to a 1999 Award is apt to include an instrument completely different in kind some 14 years later.[82] This is highlighted in this case by the variance between the provisions contained in each instrument. Thus, although cl 13 of the 1999 Award dealt with termination, it did not contain the detailed provision for ‘due process’ relied upon by Mr Elisha, as contained in clause 47.5 of the Vision EA.
[79]FWA, ss 171(a), 182, 186-187 (as in force on commencement of the Vision EA).
[80]Ibid pts 2-2 and 2-3 (as in force on commencement of the Vision EA).
[81]WRA, s 510(a). See generally WRA, pt 10 (as in force on execution of the 2006 Contract).
[82]Soliman (2008) 176 IR 183, 198–9 [67]; [2008] FCA 1512.
This result is consistent with the approach of Mr Elisha who did not contend that the Vision EA was incorporated by the ‘Conditions of Employment’ clause.
Turning next to the ‘Other Conditions’ clause, it provides that ‘Employment Conditions will be in accordance with regulatory requirements’. The language of ‘will be in accordance with’ is promissory in character, particularly given its association with ‘will be’. As observed by the judge, it is similar to the words ‘abide by’ considered in Riverwood, or ‘to be observed’ considered in Romero. Nevertheless, the phrase must be considered in relation to the surrounding language, particularly the relevant category of instrument referred to.
The first category of instrument referred to is that described as ‘regulatory requirements’. Such a category is extremely vague and, as Vision submitted, apt to extend to a huge array of regulatory rules and obligations. Further, even if it was appropriate to embrace the 1999 Award (given the earlier reference in the letter to it), for reasons given already, this reference would not incorporate a subsequent instrument, not in existence at the time, and of a different character. This is even presuming the Vision EA is a ‘regulatory requirement’.
However, the second category of instrument cited is the ‘Vision Australia Policies and Procedures’. In considering the question of incorporation of these Policies and Procedures, including the later 2015 Disciplinary Procedure, there are a number of matters which suggest that they are intended to be incorporated into the 2006 Contract.
First, as indicated already, the judge made a number of important findings about the context in which the 2006 Contract was made. These included that, at the time of the making of the 2006 Contract, and thereafter, employees were required to act in accordance with certain values and could face disciplinary action in the event of a failure to do so. Further, written policies were in existence which would regulate the conduct of any such disciplinary action.
Secondly, the ‘Other Conditions’ clause expressly provides that breaches of the Policies and Procedures ‘may result in disciplinary action.’ That is, consistent with the judge’s reasons, the letter of offer makes express provision for the capacity of a policy breach to affect the nature and/or existence of the employment relationship the subject of the 2006 Contract.
Thirdly, specific reference is also made to the Policies and Procedures in the acceptance clause of the contract wherein Mr Elisha states (in response to Vision’s offer) that he agrees to ‘comply with’ the terms and conditions of employment ‘and all other Company Policies and Procedures.’ The word, ‘comply’ is very clearly intended to be promissory. A reasonable person would also readily understand that it would be unnecessarily cumbersome for all Policies and Procedures to be provided as part of the letter. The natural meaning of the clause is therefore that there was to be compliance with ‘these’ terms, as well as the ‘other’ terms found in the Policies and Procedures, but only insofar as they are also contractual.
Although Vision suggested that the letter of offer provided for the 2006 Contract to be amended by mutual agreement, which had not happened, the reference to ‘other Company Policies and Procedures’, would be well understood by a reasonable person to incorporate those policies as they might change from time to time. Consistent with a contract intended to have some duration with capacity to respond to changes in environment, an amendment could readily occur by way of notification via the company intranet, rather than by formal amendment.
Nor do we accept Vision’s submission that the obligation was intended to be one-sided. The clause is embodied in a letter of offer made by Vision. The expression ‘comply with’ in such a context clearly reflects the parties’ intention to offer and accept mutual obligations in accordance with the company’s policies as they were promulgated from time to time.[83] This is particularly important in the context of the relevant disciplinary policy relied upon in this case. If the employer is subjecting an employee to disciplinary action according to policies under the contract created by that employer, it would ‘defy both logic and common sense’ to suggest that the employer was not obliged to take the steps which the policy provided for.[84] A reasonable person would readily understand that an employer would be similarly bound by any such policy.
[83]See also Riverwood (2000) 177 ALR 193, 213 [107] (North J); [2000] FCA 889; Romero (2014) 231 FCR 403, 414–18 [38]–[43] (Allsop CJ, Rares and McKerracher JJ); [2014] FCAFC 177.
[84]Foggo v O’Sullivan Partners (Advisory) Pty Ltd (2011) 206 IR 87, 119 [116] (Schmidt J); [2011] NSWSC 501.
We also do not accept the submission that the clause operates solely as a lawful and reasonable direction on the part of Vision. The language used is not that of direction, and a similar argument was readily rejected in Romero.[85]
[85]Romero (2014) 231 FCR 403, 418–19 [49]–[51] (Allsop CJ, Rares and McKerracher JJ); [2014] FCAFC 177.
The existence of unfair dismissal laws is certainly relevant, as Vision highlighted. However, we consider that the matters we have identified indicate that the words ‘comply with’ are clearly intended to serve a contractual purpose in this particular setting (where employees were dealing with vulnerable clients). We do not accept that the language of the 2006 Contract was only intended to ‘facilitate compliance’ with other statutory obligations, as Vision submitted. The following remarks in Romero are apposite:
In situations where clear language is used and sufficient emphasis is placed upon the need for compliance (implicitly by both parties) with the terms of a company policy, then especially where that goes to fundamental conditions of employment, such as payment and the method of compliance with external statutory obligations, objectively viewed, the parties would be expected to regard such terms as contractually binding.[86]
[86]Ibid 420 [55].
There are also limits in terms of the coverage of the unfair dismissal regime.[87] Further, the Vision EA only dealt with dismissal and did not make provision for other disciplinary processes such as warnings and training. Nor for that matter did the Vision EA deal with other policy matters which might be considered important (as evident from the range of policies annexed to the termination letter). Vision’s concerns as to the potential width of the policies are readily managed by a proper analysis of whether specific clauses of a particular policy are intended to have contractual effect (the third question in Lloyd).
[87]For example, under the current FWA, s 382 provides that there is protection from unfair dismissal only if the employee has completed at least the minimum employment period and is covered by a modern award, an enterprise agreement or the sum of annual earnings is less than a prescribed income threshold; s 392 limits the financial compensation recoverable; and s 394 imposes a 21-day time bar.
We are hence of the view that the 2006 Contract incorporated Vision Policies and Procedures, including the 2015 Disciplinary Procedure, but only to the extent that clauses contained therein were intended to have contractual effect. It remains to consider whether the clauses relied upon by the judge did have such effect.
It may be accepted that certain aspects of the 2015 Disciplinary Procedure are clearly aspirational (e.g. ‘committed to’, ‘may be’) as was acknowledged by the judge.[88] However, there are significant parts of that procedure that contain assurances or promises that Vision will act in a very specific way. For present purposes we agree with the judge that the parts which deal with the procedural steps to be followed in the conduct of a disciplinary meeting are very much in this category.[89] Given that Vision had clearly decided that the concern was of a ‘more serious nature’ in this case, there can be no doubt that a formal disciplinary meeting occurred. Once that is commenced, the language suggests that Vision ‘will’ act in a particular way such that it is obliged to follow certain procedural steps. None of the steps are in the nature of guidelines and there is nothing ‘aspirational’ or ‘discretionary’ about the language, which is clear and prescriptive.
[88]Reasons, [416].
[89]Ibid [420].
We therefore agree with the judge that Vision promised to act in a very specific way in the event it took disciplinary action.[90] This importantly included a contractual promise to provide the employee with a letter containing ‘a written outline of the allegations’[91] and to also give the employee ‘an opportunity to respond to the allegations’ at the formal disciplinary meeting.[92]
[90]Ibid.
[91]Ibid [420(b)].
[92]Ibid [420(f)].
It follows that, although we disagree with the judge about the incorporation of the Vision EA, that is immaterial given the incorporation of the relevant parts of the 2015 Disciplinary Procedure as he identified.
Proposed ground 1 is therefore not established.

PART E: PROPOSED GROUND 2: WHETHER MR ELISHA’S CONTRACT OF EMPLOYMENT WAS BREACHED

Judge’s reasons

In dealing with the question of breach, it is relevant to refer to the judge’s general credit findings about a number of Vision’s witnesses which included:
(a)that Ms Hauser was an unimpressive witness and her evidence must be treated with considerable caution;[93]
(b)that Ms Eagle and Mr Van Dyk had little memory and their evidence was ‘essentially reconstructed’;[94]
(c)that Mr Gow-Hills had an incomplete memory and had a tendency to engage in lengthy processes of self-justification;[95]
(d)that it was necessary to approach the evidence of Ms Hauser, Ms Eagle, Mr Van Dyk and Mr Gow-Hills ‘with very great caution’;[96] and
(e)that Ms Trch’s evidence was affected by a ‘considerable degree of unconscious exaggeration’ and it was necessary to treat her evidence — including documentary evidence originating in her accounts of the 23 March incident — ‘with considerable caution.’[97]
[93]Ibid [80].
[94]Ibid [81].
[95]Ibid [82].
[96]Ibid [85].
[97]Ibid [90]–[91].
After a comprehensive consideration of the oral and documentary evidence, the judge also made detailed findings about the 23 March incident. By way of summary, he found that the events which transpired in Bairnsdale were ‘considerably less objectively dramatic’ than later suggested (and evidently accepted by Vision). He considered that there were many contributing factors to what occurred, particularly the vulnerability of both Ms Trch (who had attended the incident in her pyjamas late at night) and Mr Elisha. The judge did not accept that in the course of events in Bairnsdale Mr Elisha was ‘anything more than irritated and insistent (and therefore irritating).’ Critically he found that ‘[Mr Elisha] was not objectively aggressive, threatening or frightening’.[98]
[98]Ibid [147].
The judge then turned to the circumstances surrounding the termination process.
The judge noted that the early suggestions of Ms Hauser (which were at least part of the impetus for the process that followed) included the contention that Mr Elisha had a history of ‘behaving aggressively and avoiding the consequences of that behaviour by “making excuses” and otherwise explaining away his actions’.[99]
[99]Ibid [152].
In this regard, the judge considered that the only available records relating to Mr Elisha’s performance in the period while he was being supervised by Ms Hauser contained no suggestion that he was aggressive towards her or any other staff member of Vision (or any client), or that he was engaging in ‘some systematic exercise in untenable excuse making’.[100]
[100]Ibid [161].
The judge then considered the oral evidence in more detail. This included Ms Hauser’s oral evidence about Mr Elisha’s aggressive behaviour (including an incident relating to him using the visitors’ car park) as well as the evidence of Mr Gow-Hills that Ms Hauser’s views had been reported to him.[101] The judge was ‘very doubtful’ that Mr Elisha had ‘any history of aggression or untenable excuse making’ prior to the 23 March incident. He further stated:
The evidence of any such aggression or untenable excuse making is insubstantial and I do not regard the fact that Mr Gow-Hills gave evidence of Ms Hauser having reported such a history to him to stand as any evidence that the aggression or excuse making actually ever occurred.[102]
[101]Ibid [162]–[176].
[102]Ibid [178].
Importantly, the judge did not accept that the suggestion that Mr Elisha had such a history was ever raised with Mr Elisha directly. He stated:
To the extent that anything was ever said, I do not accept that it was ever in a form which [Mr Elisha] could have understood what was being said and therefore be in a position to respond and modify his behaviour if thought appropriate.[103]
[103]Ibid [179].
However, the judge found that:
(a) Ms Trch’s account of events in Bairnsdale on 23 and 24 March 2015 was conveyed to Ms McKinley and Ms Jackson in early May 2015, and from there to Ms Deshayes and then to Ms Hauser;
(b) at that point, Ms Hauser sent the emails that conveyed the substance of the allegations made by Ms Trch concerning the events in Bairnsdale to Mr Van Dyk, Ms Eagle and Mr Garwood, but also variously included her suggestions that [Mr Elisha] had a history of being aggressive and engaging in untenable excuse making;
(c) albeit that neither of the emails was sent to Mr Gow-Hills, [Vision’s] then general manager of People and Culture, Ms Hauser’s views concerning [Mr Elisha] had also found their way to him;
(d) until about 18 May 2015, [Mr Elisha] was relevantly on annual leave in Vietnam with other members of his family and not on notice of any of the allegations being advanced against him; and
(e) Mr Gow-Hills came to be the ultimate decision maker in respect of the termination of [Mr Elisha’s] employment.[104]
[104]Ibid [180] (citations omitted).
The judge considered that Ms Hauser’s characterisation of Mr Elisha as apt to be aggressive and to engage in untenable excuse making, ‘planted’ as it was in the minds of the decision makers in Mr Elisha’s absence, without giving him an opportunity to respond to it, had a ‘plain’ prejudicial and pernicious effect, which was repeatedly seen in Vision’s evidence.[105]
[105]Ibid [181].
The judge also noted that the stand down letter made no mention of any other incidents of aggression or any history of untenable excuse making (other than the 23 March incident).[106] Further, the judge observed that neither Ms Hauser nor Ms Eagle were recorded in the file note of the meeting with Mr Elisha of 26 May as having said anything regarding Ms Hauser’s claims concerning Mr Elisha’s history of aggression and making excuses.[107]
[106]Ibid [185].
[107]Ibid [189].
The judge then considered the oral evidence of the various attendees at the 27 May meeting as to the extent they had taken into account the allegations of aggression and excuse making and found:
(a)that he did not accept the evidence of Ms Eagle that she put Ms Hauser’s observations about Mr Elisha’s aggression and excuse making out of her mind;[108]
(b)that Ms Hauser’s evidence was that ‘that’s exactly what [Mr Elisha] does’ [be aggressive];[109] and
(c)that Mr Van Dyk’s memory was plainly eroded but he said termination was appropriate because of ‘that sort of intimidating behaviour, the aggressiveness …’.[110]
[108]Ibid [201].
[109]Ibid [203].
[110]Ibid [204].

Consistent with other cases which have applied the principle,[201] it therefore arises where compensation is sought in respect of the loss of a contract. The principle is deployed in such circumstances to arrive at the true value of that lost contract in circumstances where a right to terminate that contract also exists.
[201]See Berry (2020) 271 CLR 151, 175 [37] (Bell, Keane and Nettle JJ); [2020] HCA 27; Martinez [2019] NSWCA 310, [29] (Meagher JA, Bell ACJ agreeing at [1], Barrett AJA agreeing at [66]).
In the present case, however, as highlighted already, Mr Elisha claimed that he had suffered a psychiatric injury which disabled him from working. Thus, he was not seeking compensation in respect of the loss of the 2006 Contract, but (somewhat unusually) was instead seeking damages based on the fact that ‘his earning capacity is permanently and significantly reduced or extinguished as a result of the claimed injuries’.
As we have already found, this does not assist Mr Elisha because the damages sought were not recoverable on remoteness principles and, further, because damages for psychiatric injury were not available. However, the least burdensome performance rule also does not assist Vision. Given that Mr Elisha did not seek compensation for the loss of the value of the 2006 Contract, the Court was not being asked to value that contract and the least burdensome performance rule was simply not engaged.
If it was necessary to decide, we would therefore reject proposed ground 3(a).

PART G: NOTICE OF CONTENTION: WHETHER VISION OWED MR ELISHA A RELEVANT DUTY OF CARE

As noted above (and repeated here for clarity), Mr Elisha contended that the judgment should be affirmed on a ground of law which was erroneously decided being:
The judge erred by holding that Vision did not owe a duty of care to Mr Elisha to take reasonable care to avoid injury to Mr Elisha in its implementation of the processes leading to and resulting in the termination of Mr Elisha’s employment, and in failing to find that Mr Elisha was entitled to judgment accordingly.

Judge’s reasons

The duty of care pleaded was a broad duty to take reasonable care ‘for the safety of [Mr Elisha] while he was performing his work’. However, the judge considered that ‘as it emerged’, Mr Elisha contended that Vision had owed to him, and breached, a duty of care ‘in respect of the process by which his employment came to be terminated’ and which led to psychiatric injury.[202]
[202]Reasons, [434].
The judge ultimately upheld Vision’s submission that, insofar as Mr Elisha asserted a common law duty of care on the part of the employer in respect of matters ‘concerning the termination of [Mr Elisha’s] contract of employment, as distinct from performance under that contract’, the asserted duty is not recognised by the common law.[203]
[203]Ibid [467], [529].
The judge set out the reasoning of Spigelman CJ in the NSW Court of Appeal decision of Paige (with whom Mason P and Giles JA agreed in relation to the negligence claim),[204] which concerned a claim by a school principal for damages for psychiatric injury caused by ‘unsafe’ disciplinary proceedings.[205] He observed that the duty of care had been formulated in that case as encompassing ‘the provision of a safe system of investigation and decision making’ with respect to ‘discipline and termination of employment.’ The ‘defects’ identified included a denial of procedural fairness and a submission that the contract had ‘never been validly terminated.’ Spigelman CJ described the formulated duty as ‘novel’ and involving ‘an extension of employers’ duties’.[206] He ultimately refused to recognise that such a duty of care existed, having regard to issues of compatibility with other obligations recognised, including those recognised under legislation, as well as under contract law.[207]
[204](2002) 60 NSWLR 371; [2002] NSWCA 235. Mason P agreeing at 416 [330] and Giles JA agreeing at 419 [358] subject to one qualification regarding breach of duty of care.
[205]Reasons, [470]–[478].
[206]Paige (2002) 60 NSWLR 371, 387–8 [78]; [2002] NSWCA 235.
[207]Ibid 405 [182].
The judge recorded that senior counsel for Mr Elisha had contended that Paige should be distinguished because of the impact in that case of the provisions of the Teaching Services Act 1980 (NSW) on the scope of any duty in tort.
The judge observed that Paige might be said to involve concerns of coherence arising from, amongst other things, the provisions of both the Teaching Services Act 1980 (NSW) and the Industrial Relations Act 1996 (NSW).[208] He then proceeded to consider the decision at some length and recorded some particular reservations about it, including:
(a)that the two statutes relevant in Paige do not apply in the present instance;[209]
(b)that the legislative provisions under consideration in Paige seem to have permitted awards for compensation for psychological injury, while the FWA does not;[210]
(c)that he did not consider it easy to see how a risk of a much later common law action directed to psychiatric injury would often be at risk of ‘distorting’ the early unfair dismissal proceeding, particularly when that proceeding cannot address issues of ‘shock, distress or humiliation, or other analogous hurt’;[211] and
(d)that real issues may arise concerning the point at which it might be said that the duty of care ‘starts and finishes’.[212]
[208]Reasons, [481].
[209]Ibid.
[210]Ibid [481]–[483], citing FWA, s 392(4).
[211]Ibid [485]–[487].
[212]Ibid [490].
The judge next considered the decision of the Queensland Court of Appeal in Govier v The Uniting Church in Australia Property Trust (Q) (‘Govier’)[213] in which the appellant’s claims included a claim for damages for psychiatric injury resulting from ‘insensitive’ letters sent by the respondent. Those letters were sent during the course of an investigation into the appellant’s conduct, which ultimately led to her being stood down, and later terminated. The judge recorded that in that case, Fraser JA, with whom Gotterson JA and North J agreed, considered an incompatibility with ‘the law of contract, as modified by statute, concerning termination of employment’ to be sufficient to stand against acceptance of the ‘novel’ duty of care there postulated.[214] The judge did not accept, as contended by senior counsel for Mr Elisha, that the fact that special leave to appeal to the High Court had been granted in Govier, and then later revoked (because the appellant’s contract of employment had not been placed into evidence at trial),[215] meant that the authority of Govier was impugned.[216]
[213][2017] QCA 12.
[214]Ibid [77]–[78] (Gotterson JA agreeing at [87] and North J agreeing at [88]).
[215]Transcript of Proceedings, Govier v Unitingcare Community [2017] HCATrans 183; Transcript of Proceedings, Govier v The Uniting Church in Australia Property Trust (Q) [2018] HCATrans 65.
[216]Reasons, [493]–[497].
The judge noted that Paige was later confirmed to be correct by the New South Wales Court of Appeal in Shaw.[217] He also proceeded to consider a number of further cases,[218] including the Queensland Court of Appeal decision in Potter v Gympie Regional Council (‘Potter’).[219]
[217](2012) 219 IR 87; [2012] NSWCA 102; ibid [498].
[218]Reasons, [499]–[507].
[219][2022] QCA 255.
In Potter, the plaintiff sought damages for psychiatric injury, claiming that the defendant was negligent in dealing with work performance issues that arose, as a consequence of which he had been suspended. On appeal, the Queensland Court of Appeal determined that the trial judge was correct in confirming that a duty could not extend to incidents of the contract of employment such as the ‘disciplinary procedures’ there under consideration.[220]
[220]Ibid [34]–[36] (Flanagan JA, Mullins P agreeing at [1], Williams J agreeing at [83]).
The judge considered that the decisions he had cited tended to highlight the care which must be taken when it is sought to treat Paige, or any of the cases which he referred to, as ipso facto ‘insuperable’. That said, in Queensland, in particular, he considered that there seemed to be support for the proposition that there can be no duty of care in respect of the incidents of the contract of employment such as the exercise of power to suspend in connection with disciplinary procedures. The judge considered that proposition seemed to carry within it an acceptance of the correctness of the underlying reasoning in both Paige and Govier.[221]
[221]Reasons, [508]–[509].
The judge stated that in this case the duty postulated was not necessarily ‘incompatible’ with the statutory scheme of the FWA, and therefore precluded, and indicated that he would not conclude that Mr Elisha’s claim was necessarily precluded by that aspect of the reasoning in Paige or Govier.[222] However, he accepted that the recent reasoning in Potter was significant and cannot be ignored. This reasoning tended to suggest that such a duty will be ‘incompatible with disciplinary procedures’, particularly in a case where the appellant was suspended from work but his employment was not at that time terminated.[223]
[222]Ibid [510]–[511].
[223]Ibid [512].
The judge further noted that the reasoning in Paige is based on more than one suggested element of incoherence. A significant element of that reasoning was identified as based on the ‘line of authority’ involving Addis and Baltic Shipping.[224] In that connection, the judge cited the remarks of Ashley J in Aldersea we have cited earlier.[225] While Ashley J made his remarks in relation to a claim pleaded in contract, the judge considered the proposition to be broader, stating:
if the common law recognises no claim for damages for personal injury based in wrongful termination of a contract of employment, how could a case in respect of the same events framed in the common law of negligence produce a different result?[226]
[224]Paige (2002) 60 NSWLR 371, 395–6 [133]; [2002] NSWCA 235.
[225]Aldersea (2001) 3 VR 499, 518 [117], cited at Reasons, [514]. See [208] above.
[226]Reasons, [515].
Thus, the judge considered it ‘tolerably clear’ that, absent contractual terms that could permit such a case, or the application of any of the exceptions referred to in Baltic Shipping, ‘the common law seems to stand against a negligence claim such as the present that is directed to the termination of [Mr Elisha’s] contract of employment’.[227]
[227]Ibid [516].
Ultimately, the judge considered that the present case was not sufficiently distinguishable from the principles to which he had referred, or that it ‘really’ may be said that the principle in Aldersea is wrong. Thus, the judge determined to follow Aldersea and found that the duty of care sought to be relied upon by Mr Elisha is not presently recognised by the common law.[228]
[228]Ibid [528]–[529].

Submissions

In written submissions, Mr Elisha cited both Paige and a decision of the House of Lords in Johnson v Unisys Ltd (‘Johnson’).[229] Specifically in relation to Paige, Mr Elisha submitted that the arguments set out by Spigelman CJ as to why a duty of care should be recognised are compelling. In that case, his Honour ultimately concluded that no duty of care should be found based on the availability of remedies pursuant to industrial legislation, and the issue of coherence with administrative law remedies which may have been available. Mr Elisha submitted that, in the present case, there were no administrative law remedies available to Mr Elisha, and the industrial legislation provided for an ‘extremely limited remedy’ which did not include any allowance for distress or injury.[230]
[229][2003] 1 AC 518; [2001] UKHL 13.
[230]Citing FWA, s 392(4).
Mr Elisha further submitted that much of his claim was based on the procedures and actions undertaken by Vision prior to, but leading up to, his termination, during which time he remained an employee. He submitted that the disciplinary investigations and procedures should properly be seen ‘as part of creating a safe working environment — that is, an environment that is psychiatrically safe as well as physically safe’.
In oral submissions, senior counsel accepted that he was asking for the law to be ‘developed’, although in one sense he was simply inviting the Court to apply well established principles to a specific area of an employment relationship.

Consideration

Insofar as Mr Elisha relied on Johnson, that decision does not assist him. As is explained by Spigelman CJ in Paige,[231] their Lordships rejected recovery in both negligence and contract for psychiatric injury arising from the manner of an employee’s dismissal. In doing so, four members of the House of Lords decided that the determining factor was the legislative intervention by Parliament in the area of unfair dismissal.
[231](2002) 60 NSWLR 371, 396–7 [135]–[141] (Mason P agreeing at 416 [330], Giles JA agreeing at 419 [358]); [2002] NSWCA 235.
Turning more directly to Paige, Spigelman CJ cited the decision of the High Court in Sullivan v Moody,[232] and carefully considered issues of compatibility and coherence between the law of tort and other laws being: statutes; the law of contract (as modified by statute); and administrative law.[233] He considered that the recognition of a new category of duty must consider the requirements of a coherent system of law in Australia.[234]
[232](2001) 207 CLR 562; [2011] HCA 59.
[233](2002) 60 NSWLR 371, 390 [95] (Mason P agreeing at 416 [330], Giles JA agreeing at 419 [358]); [2002] NSWCA 235.
[234]Ibid 391 [97].
Spigelman CJ analysed the relevant legislation which specifically governed teachers and identified ‘an element of incompatibility’.[235] However, he also examined the law of contract, as modified by statute, and found that the possibility of incoherence in the system of law applicable in New South Wales was such that the proposed duty should not be recognised.[236] He also made the remarks (already cited) to the effect that he would not extend the observations in Baltic Shipping to psychiatric damage.[237]
[235]Ibid 395 [131].
[236]Ibid 395 [132].
[237]See [209] above.
Spigelman CJ then proceeded to undertake a comprehensive review of the statutory regime for unfair dismissal claims both in New South Wales and the Commonwealth, observing that there was some form of special provision found in all states.[238] He ultimately concluded:
The area of unfair dismissals is heavily regulated in both State and Commonwealth contexts. It represents a particular and carefully calibrated balancing of the conflicting interests involved namely, between preserving the expectations of employees on the one hand and enabling employers to create jobs and wealth, on the other hand. The arguments and factors accepted in Johnson v Unisys are directly applicable to the legislation examined above and the same conclusion, namely a refusal to expand the duty of care in negligence to provide an alternative cause of action for unfair dismissals, should be the result.
The expansion of the law of tort to matters concerning the creation and termination of a contract of employment, as distinct from performance under the contract, may distort the balance of conflicting interests found to be appropriate as a matter of contract or by intervention of statute. Where, as here, the courts are asked to create a novel duty of care, the courts should refrain from doing so where there is such a well developed alternative mechanism for adjusting the interests involved. Matters concerning the creation and termination of a contract of employment can, in my opinion, properly be left to the law of contract, subject to the extensive statutory modification that the parliaments have introduced into this specific area of contract law.[239]
[238](2002) 60 NSWLR 371, 399–400 [153] (Mason P agreeing at 416 [330], Giles JA agreeing at 419 [358]); [2002] NSWCA 235.
[239]Ibid 400 [154]–[155].
As highlighted by Mr Elisha and the judge,[240] s 392(4) of the FWA (which excludes compensation for shock, distress, humiliation, or analogous hurt caused by dismissal) has been introduced since Paige.[241] However, this difference does not undermine the force of Spigelman CJ’s observations. To the contrary, the Explanatory Memorandum by which the provision came to be introduced states that the provision ‘reflects the common law position that shock, distress or humiliation resulting from the dismissal is not compensable’ (citing both Addis and Baltic Shipping).[242] Hence Parliament evinced a clear intention to align the unfair dismissal regime with the common law position and exclude damages for psychiatric injury.
[240]Reasons, [481]–[482].
[241]Explanatory Memorandum, Workplace Relations Amendment (Work Choices) Bill 2005 (Cth) [2188]–[2189]. See also Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1564].
[242]Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1564].
The reasoning of Spigelman CJ also clearly extended beyond a consideration of the particular statutory regime applicable to teachers. In Govier, the Queensland Court of Appeal expressly rejected a submission that Paige was distinguishable because it involved a particular statutory process involving teachers.[243]
[243][2017] QCA 12, [77] (Fraser JA, Gotterson JA agreeing at [87], North J agreeing at [88]).
It is true that Spigelman CJ fairly recognised that there were factors in favour of recognition of the duty, which included that it focused on a relationship in which a wide range of duties already exists, the vulnerability of persons who might be subject to negligent conduct, as well as the fact of control.[244] Nevertheless, he ultimately considered that the issues of coherence he had identified were so significant as to outweigh those considerations.[245]
[244]Paige (2002) 60 NSWLR 371, 404–5 [178]–[181] (Mason P agreeing at 416 [330], Giles JA agreeing at 419 [358]); [2002] NSWCA 235.
[245]Ibid 405 [182].
As recognised by the judge, the decision in Paige has been applied in a number of cases including:
(a)by the NSW Court of Appeal in Shaw which related to the annulment of the appointments of certain teachers;[246]
(b)by the Queensland Court of Appeal in Govier;[247]
(c)by the Queensland Court of Appeal in Potter where, as noted above, an employee was suspended on full pay pending an investigation. The Court also expressly rejected a submission that the claim related to the employer’s failure to provide a safe workplace in the course of their employment;[248] and
(d)by this Court in Lloyd, where their Honours (Beach and Osborn JJA and Forbes AJA) cited both Paige and Govier and stated (by way of obiter dicta), that they would reject any extension of the duty of care in investigation and handling of complaints made against an employee.[249]
[246](2012) 219 IR 87, 115 [123]–[127] (Barrett JA, Beazley JA agreeing at 91 [1], McColl JA agreeing at 91 [2], Macfarlan JA agreeing at 91 [3], McClellan CJ at CL agreeing at 117 [136]); [2012] NSWCA 102.
[247][2017] QCA 12, [66]–[78].
[248][2022] QCA 255, [30]–[33] (Flanagan JA, Mullins P agreeing at [1], Williams J agreeing at [83]).
[249][2021] VSCA 327, [67].
Although Mr Elisha made various attempts to rework the duty of care sought to be recognised, it very squarely came within the alleged duty the subject of Paige. The fact that the judge found that the breach of the duty was constituted by reason of what he had found in relation to the contract claim confirms this.[250] The suggestion that the duty related to a failure to provide a safe workplace during the course of employment because it related only to procedures ‘leading up to dismissal’ must also be rejected, as it was rejected in Potter.[251] The case is directly concerned with the failure to give due process in the course of making a decision to terminate.
[250]Reasons, [534].
[251]Potter [2022] QCA 255, [33]–[36] (Flanagan JA, Mullins P agreeing at [1], Williams J agreeing at [83]).

The reasoning of Spigelman CJ is careful and comprehensive and has been followed by a number of other appellate courts as we have already set out. Although Mr Elisha sought to suggest that Potter was wrong, he otherwise did not suggest that any of the cases cited, including Paige, were plainly wrong.
We are not satisfied that Paige, or any of the other cases which have applied Paige, are plainly wrong.[252] The result is that the judge was correct to reject the existence of the alleged duty of care in this case.
[252]Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, 151–2 [135] (Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ); [2007] HCA 22.
It follows that the notice of contention must be rejected and it is unnecessary to consider any of the other submissions made by Vision in opposition to that notice.

PART H: CONCLUSION

The judge was correct to find that there was no duty of care as alleged, with the result that the negligence case failed. Although he was also correct to find that Vision had breached the contract as he did, the damages for psychiatric injury cannot stand.
Subject to hearing from the parties on the precise form of the final order,[253] including as to whether there should be nominal damages for the breach of contract, we will grant leave to appeal, allow the appeal, and set aside the damages orders made by the judge.
[253]Senior counsel for Vision requested that there be an opportunity to be heard on the form of the final order.
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APPENDIX 1: Vision 2015 Disciplinary Procedure

Disciplinary Procedure

Vision Australia recognises that during the employment relationship, there may be occasions where an employee’s behaviour or work performance requires disciplinary action.

Vision Australia is committed to communicating the expectations and standards regarding workplace behaviour and work performance, and seeks to emphasise the corrective and educative role of disciplinary action.

Vision Australia is committed to a fair, equitable and consistent approach to disciplinary action, and to act in accordance with this procedure, as well as all relevant industrial instruments and contract provisions, for all employees who have completed the minimum employment period as defined in the Fair Work Act 2009.

When is Disciplinary Action appropriate?

Disciplinary action may occur where there is a concern with respect to an employee’s performance or conduct in the workplace.

Examples of behaviour that may lead to disciplinary action include, but are not limited to, issues of under performance, lack of punctuality, failure to adhere to the policies of Vision Australia, failure to model Vision Australia’s values at all times, and failure to adhere to lawful and reasonable directions.

Serious Misconduct

Disciplinary action should occur in cases of serious misconduct.

Serious misconduct is defined in accordance with the Fair Work Act 2009 and includes:

•Wilful, or deliberate, behaviour by an employee that is inconsistent with the continuation of the contract of employment; and
•Conduct that causes imminent, and serious, risk to the health, or safety, of a person, or to the reputation, viability or profitability of the employer.

Depending on the facts, summary dismissal may be justified in situations such as, but not limited to:

•The employee committing theft, fraud or assault (for example, stealing the property of the employer or another employee, or intentional abuse of a customer or other employee).
•The employee being affected by drugs or alcohol while at work.
•The employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.
•Persistent failure to comply with occupational health and safety policies.

Disciplinary Procedure

Where there is a concern with an employee’s performance or conduct, the first step, if appropriate, will be an informal counselling session between the employee and their immediate manager. The employee will be advised of the concern, and an agreed strategy for dealing with the concern will be negotiated. The situation will be reviewed within an agreed timeframe.
Where informal counselling is not appropriate or where the concern is of a more serious nature, a formal disciplinary meeting will occur. Prior to the meeting, the employee will be provided with a letter containing a written outline of the allegations. The letter will request that the employee attend a meeting to respond to the allegations, and indicate that the employee may have a support person present. The letter will also indicate that disciplinary action up to and including termination may occur if the response is not satisfactory.
The meeting will be attended by up to two management representatives (one of whom may be a legal or industrial representative of Vision Australia). One of these parties will act as note-taker to record events. At the meeting, a discussion will occur and the employee will be given an opportunity to respond to the allegations.
Following the meeting, Vision Australia will make a decision as to whether the employee should be issued with a formal written warning, a final warning or termination of employment, or whether other appropriate action should be taken (i.e training), or whether no action should be taken at all.
Vision Australia will advise the employee of their decision. A written record of the decision will [be] placed on the employee’s file. If a formal written warning is given, the employee will be informed that any further instance of poor performance or unacceptable behaviour/conduct in the workplace may result in further disciplinary action up to, and including, termination of employment.

Investigations

In some cases, it may be necessary for Vision Australia (at any time) to arrange for an investigation into the allegations. The investigation will be conducted in accordance with the principles of natural justice. During an investigation an employee may be placed on leave with pay if necessary in the circumstances.

[2023] VSCA 265

1 November 2023