Recent developments regarding employer liability for psychiatric injuries

As awareness continues to increase around mental health and wellbeing, a recent decision of the High Court of Australia in Kozarov v Victoria [2022] HCA 12 has highlighted the need for employers to be conscious of their duties in respect of the psychological health of employees.

The Facts

Ms Kozarov was a prosecutor employed in the Victorian Office of Public Prosecutions (OPP). From June 2009 until June 2012, she worked in the OPP’s Specialist Sexual Offences Unit (SSOU) which prosecuted serious indictable sexual offences.

Ms Kozarov performed work which involved routine interaction with trauma survivors, instructing in sexual assault trials, viewing of child pornography and managed an excessive workload.

In April 2011, Ms Kozarov started to suffer from post-traumatic stress disorder (PTSD) and was later also diagnosed with major depressive disorder.

Ms Kozarov commenced proceedings against the OPP in the Supreme Court of Victoria (VSC) arguing the OPP had been negligent and failed to take reasonable steps to prevent her psychiatric injury in the course of her employment.

Ms Kozarov was successful and was awarded $435,000 in damages, with the VSC finding that the OPP was on notice of the risks to Ms Kozarov’s mental health and failed to take reasonable steps to address these risks. Importantly, the VSC had regard to the ‘Vicarious Trauma Policy’ (Trauma Policy) of the OPP which encouraged the rotation of SSOU employees, but a rotation had not been implemented by the OPP in respect of Ms Kozarov.

The OPP appealed the decision of the VS and the Court of Appeal quashed the primary judge’s decision and Ms Kozarov’s award of damages.

The High Court of Australia Decision

Ms Kozarov subsequently appealed the decision of the Court of Appeal to the High Court of Australia (HCA), which unanimously overturned the Court of Appeal’s decision and upheld the damages awarded by the VSC.

The HCA determined that Ms Kozarov would have most likely accepted a rotation under the Trauma Policy had this been offered to her by the OPP, while also finding that the failure to offer her a rotation had exacerbated Mr Kozarov’s psychological injury. As such, the HCA found the OPP had failed in its duty of care.

Significantly, the HCA agreed with Ms Kozarov that there were “evident signs warning the possibility of psychiatric injury” which were readily apparent to the OPP and noted that the OPP had a live appreciation of the serious risks to Ms Kozarov (and other SSOU employees) as demonstrated by the Trauma Policy:

“… no further warning signs were necessary to establish that the content of the duty of care owed by the [OPP] to Ms Kozarov included active steps for the care of the psychiatric health of Ms Kozarov and her fellow employees within the SSOU”.

The High Court further said that “It should be understood … that the circumstances of a particular type of employment may be such that the work to be performed by the employee is inherently and obviously dangerous to the psychiatric health of the employee ... In any such case, the employer is duty-bound to be proactive in the provision of measures to enable the work to be performed safely by the employee”.

Key Takeaways

The HCA decision highlights the need for employers to be aware of and to take reasonable steps in relation to not only the risk of physical injury, but also psychological injury, to workers, particularly in circumstances where the work performed involves obvious inherent risks posed to their mental health.

As such, it is important that employers undertake risk assessments in relation to psychological health and wellbeing, and implement appropriate control measures accordingly.

Other Recent Developments

In addition to the above case, employer obligations in respect of psychosocial hazards have also been emphasised by current proposed amendments to the Occupational Health and Safety Regulations 2017 (Vic) under the draft Occupational Health and Safety Amendment (Psychological Health) Regulations, which seek to impose positive obligations on employers in respect of psychosocial hazards.

These obligations include requiring employers to review and revise measures implemented to control psychosocial risks; to have in place prevention plans for certain psychosocial hazards; and the periodic reporting of complaints of bullying, sexual harassment and aggression or violence.

We will keep you updated as to any further developments in relation to these proposed amendments.