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Queensland Worker’s Compensation case sets precedent for workplace psychological claims arising from understaffing and ‘performance management’

News

A significant workers’ compensation decision recently handed down in the Supreme Court of Queensland, has highlighted the need for employers to address resourcing and staffing deficiencies in the workplace as quickly as possible to ensure they are taking reasonable steps to prevent workplace injury and illness, including psychological injury. Attwood Marshall Lawyers Associate Compensation Lawyer Tina Davis discusses the case and the duty of care of the employer to take active steps to inform itself of staff issues and ensure its workers are protected from psychological injury in the workplace.

Background

In the case of Ackers v Cairns Regional Council [2021] QSC 342, the employee, Mr Ackers brought a legal claim against his employer, Cairns Regional Council after he suffered a significant psychological injury during the course of his employment.  Mr Ackers alleged that there was a breach of Council’s duty of care to him which caused him to suffer his psychiatric illness.

Mr Ackers was employed to work as a payroll supervisor in the Council’s payroll unit which was already beset with operational and efficiency problems related to technology, staffing, procedural issues, and other problems.

During the selection process prior to his appointment, Mr Ackers had been told about the problems within the payroll department and with staff using inconsistent procedures and making mistakes, and that the previous payroll supervisors had been unable to fix the problems.  Upon appointment of his role, Mr Ackers was told by the employer that he had two mandates, namely “to fix the staff and fix the system.”

Unfortunately, early into Mr Ackers tenure, multiple team members ceased working or went on indefinite sick leave, leaving the department short-staffed.  Any available temporary staff did not have the experience nor the skillset to take over some of the workload.  The staffing deficiencies placed stress on the remaining staff and this increased errors in the payroll unit.  Due to understaffing, Mr Ackers had no choice but to work long additional hours. He initially started working an additional minimum of 15 hours per week, and would often work late at night, weekends, on RDO’s and on at least two occasions did full overnight stints. It was obvious that the department was understaffed and inefficient which caused the prolonged period of additional hours of work being required.  

The Court found that the Council’s corporate knowledge of Mr Ackers workload and the pressures he had been under, together with signs that he was becoming psychologically distressed, made the risk of psychiatric injury reasonably foreseeable.  Further, the Council gave no consideration to Mr Acker’s psychiatric state in targeting him with a “Performance Improvement Action Plan” at a time when he was suffering from depression and clearly highly stressed from his workload.  

The Court ultimately found in favour of the Plaintiff, Mr Ackers, and he was awarded approximately $1.1 million in compensation.

Loss of Staff

The four-week trial heard that when Mr Ackers commenced employment as the payroll supervisor at Cairns Regional Council on 22 September 2014, he was instructed by the Chief  Financial Officer, at that time, to “fix the staff and fix the [payroll] system”.

The payroll staff initially included five other full-time employees, himself, and one casual employee, as well as two staff from the financial branch who would occasionally support the department. However, the two temporary officers ceased in the payroll department in March 2015. Between February 2015 and April 2015, three full-time staff went on indefinite sick leave which left the department understaffed for many months.

Mr Ackers requested skilled replacements be hired on various occasions, with his requests being rejected by his superiors, resulting in Mr Ackers’ team remaining significantly under-resourced and struggling to ensure that council employees continued to receive their fortnightly pay on time. Mr Ackers noted that his requests received either no response or were met with confusion as to why the unit needed extra staff.

At this stage, Mr Ackers was working the equivalent of two extra days per week, with two separate occasions of Mr Ackers working overnight. The additional workload was known to the Council. He worked excessive hours to manage an “unusually demanding workload” and a “higher than usual risk of errors occurring in the payroll unit.”

During the trial, Justice Henry noted that although some temporary support was provided to the payroll unit, the assistance was insufficient to meet the team’s demands, requiring highly technical skills.

Deterioration of mental state

In spite of Mr Ackers being visibly distressed at work little changed concerning his workload or his repeated requests for additional staff.

Between May 2015 and July 2015, the Council’s Human Resources unit raised concerns about Mr Acker’s health and the fact he was showing signs of being withdrawn and quiet. As a result of his stress, he started showing physical symptoms such as shaking when performing interviews. He was directed to see a doctor and go on sick leave.

In July 2015, four days after Mr Ackers had returned to work from medical leave, in tears, he disclosed his depression and need for medication to his supervisor, as well as information about a pre-existing mental health condition he suffered. He took this opportunity to ask for additional staff once again.

During the period Mr Ackers was on sick leave, two financial team members had stepped in to help the team with their duties and found several errors. Unbeknownst to Mr Ackers, an audit was orchestrated culminating in a report.  The report revealed apparent errors and oversights in the payroll department. While many of the errors were not made by Mr Ackers, he was still placed on a Performance Management Plan and was issued an official warning after the team members on sick leave made complaints against him.

Mr Acker’s psychological health deteriorated to such a degree that he had developed a tremor in his right arm and a bad stutter, which worsened when he discussed work matters. He noted that his depression, anxiety, and post-traumatic stress disorder symptoms were exacerbated due to work-related stress.

Following a meeting on 23 September 2015, Mr Ackers was provided with a letter to attend a doctor regarding his mental state. On 24 September 2015, Mr Ackers was issued a medical certificate declaring him unfit for work. He has been unable to return to work since that time.

Court Findings

The Court determined that in the Council’s continued pursuit of their unverified Performance Management Plan (PMP), after a culmination of signs exhibiting psychological distress, the Council had breached their duty of care, causing their employee’s extreme depressive mental illness.

“His illness has and will continue to cause him significant loss, for which a substantial award of damages will be made,” the Justice said.

Justice Henry of the Queensland Supreme Court found that the psychiatric injury suffered by Mr Ackers was reasonably foreseeable and could have been prevented.

Justice Henry was satisfied that the severe depression, anxiety, and PTSD which resulted in a severe stutter and tremor in Mr Ackers’ right forearm, were due to events during his employment with the Council between 2014 and 2015.

An emotional Mr Ackers conveyed that he was “relieved” that Justice Henry had ruled in his favour and that the Council would be held to account for their negligence and the damage it had caused.

In this case, the employer failed to handle the situation appropriately because they were quick to implement a Performance Management Plan, without taking the necessary steps to investigate why the errors were made and identify contributing factors that had resulted in the breakdown of the culture within the department. The employer tallied up the errors that had been identified, attributed them to a single employee as the team leader, and placed the employee on the performance management plan without any opportunity to investigate and communicate further.

There were alternative approaches that could have been taken which would have resulted in a more beneficial conclusion for both the employee and employer.

The employer would have benefited from addressing the alleged errors in the payroll system and asking Mr Ackers to explain them and how they were caused.

Uncovering the cause of the errors may have been an opportunity for the employer and employee to discuss the overall team’s performance and any additional support or resources that could be accessed to improve the team’s performance and reduce future errors from happening.

The Court ruled that it ought to have been obvious to the employer that the errors were due to understaffing.

The Justice made it explicit that the employer had no agitation about what led to these errors. The errors should have prompted a natural and obvious query as the employer was aware the team had been understaffed and overworked.

The Court ruled in Mr Acker’s favour and held the Council liable for loss and damages. The Court handed down a judgment against the employer for $1,099,132.69.

While employers are entitled to assume usual resilience on the part of an employee, a greater level of care may be required when an employer imposes an abnormally stressful workload or when an employee is demonstrating signs of psychological stress.

This decision in this case should strongly communicate to all employers that they must satisfy the duty of care they have to their employees or be held to account for the physical or psychological injuries suffered.

We’re here to help workers get the treatment and compensation they need for work-related physical and psychiatric injuries

As a leading compensation law firm, Attwood Marshall Lawyers have helped thousands of workers claim workers’ compensation and access the maximum amount of benefits they are entitled to after suffering a work-related injury or illness.

What makes our firm stand out from the countless personal injury law firms in Australia is our long-standing reputation for taking on the most difficult of cases, advocating for our clients and achieving exceptional results against all odds. We provide our clients with specialist advice, and vast resources, whilst ensuring our clients get the personal support they need when dealing with this difficult time in their life.

We handle everything so that you can focus on your treatment and your well-being.

We can assist with all types of compensation claims including workers’ compensation claims, motor vehicle accident claims, TPD and superannuation claims, institutional abuse claims, public liability accident claims, and employment disputes.

Attwood Marshall Lawyers offer a free, no-obligation initial consultation for all compensation law matters. Contact Compensation Law Department Manager Kelli Costin on direct line 07 5506 8220, email kcostin@attwoodmarshall.com.au or free call 1800 621 071 to discuss your needs today.

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Tina Davis Compensation Law Associate Attwood Marshall Lawyers

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