Psych: overworked – Koehler v Cerebos applied against the plaintiff

Larner v George Weston Foods Ltd [2014] VSCA 62


1 The appellant, David Larner, (‘Larner’), appeals against a judgment entered by a judge of the County Court in favour of his former employer, George Weston Foods Limited (‘GWF’), the respondent to the appeal. Larner had brought proceedings alleging that between 1 February and 26 April 2002, when he was employed as GWF’s Logistics Manager for Victoria and South Australia, he suffered injury as a result of negligence by GWF and/or breach of a duty of care it owed to him.[1] Further, or in the alternative, Larner alleged that GWF had breached express and implied terms in his contract of employment.[2] He alleged that he was required to perform work which was unduly onerous and which exposed him to undue stresses and strain.[3] He was overloaded with work and not provided with guidance or assistance despite frequent requests and/or agreement to do so.[4] Larner pleaded that as a result of those breaches, he suffered severe injuries, including major depressive disorder and panic disorder with agoraphobia.[5] He abandoned his claim for pecuniary loss damages on the first day of trial.

2 The trial originally commenced before a judge sitting with a jury of six. At the conclusion of the evidence the judge granted an application by GWF to discharge the jury without a verdict on the grounds that the issues of fact and law were of such complexity as to preclude the jury being charged. He subsequently dismissed the proceeding finding that Larner had failed to establish negligence or breach of contract.[6]

3 For the reasons that follow, we would dismiss the appeal.


Breach of duty of care

200 At the heart of Larner’s case at trial was the allegation that GWF had breached its duty of care. On appeal, Larner submitted that the judge erred in interpreting, and applying to the evidence, the principles enunciated by the High Court in Koehler v Cerebos. Larner submitted that his Honour misconstrued the submissions made on his behalf about those principles, in particular the content of GWF’s duty of care; what the law required Larner to prove to demonstrate a reasonably foreseeable risk of psychiatric illness; the issue of whether stress constituted a recognisable psychiatric illness; and the judge’s treatment of Larner’s unchallenged evidence that Pascoe said to him ‘you look like hell. They’re killing you’ and ‘You can’t work 12 hours plus without taking a break’, which, it was argued, evidenced GWF’s knowledge of the risk that Larner would sustain a recognisable psychiatric illness. Larner also attacked the judge’s reasons as inadequate in rejecting his claim in negligence.

201 In Koehler v Cerebos the plaintiff, Ms Koehler, suffered psychiatric injury while employed as a part-time sales representative after working in a full-time capacity in the same position for the same company. Following a review of the company’s business after the loss of a major client, Ms Koehler had been retrenched as a full time employee and offered part time work for 24 hours over three days a week. The letter of engagement for her new employment set out only the ‘bare bones’ of her engagement (start date, hours, hourly rate, car allowance and out of pocket allowances) but it did not set out the duties she was expected to perform. It was only when she started in the part-time position that she was told the territory she was expected to cover. She indicated immediately that she would not be able to cover the stores listed in the time for which she was employed. However, she agreed to give it a try for a month. She subsequently complained both orally and in writing on many occasions that the area she was required to cover was too big and that at times she needed to work more than eight hours a day. However, all her complaints related to whether the work could be completed. She did not complain that the problems she was experiencing were affecting her health. She suggested that the number of stores she needed to visit be reduced, or that she be allowed to work a fourth day, or she should have help to do her work. The employer took no action. Ultimately, Ms Koehler was diagnosed with complex fibromyalgia syndrome and a major depressive illness. She alleged that the failure of the employer to take the steps she identified constituted both a breach of its common law duty and a breach of an implied term to provide a safe system of work.[145]

202 The High Court affirmed the decision of the Full Court of the Supreme Court of Western Australia that the absence of any material available to the employer which would have alerted it to a specific risk of psychiatric injury meant that such a risk was not foreseeable. A reasonable person in the position of the employer would not have foreseen the risk of psychiatric injury to Ms Koehler. In a joint judgment delivered by McHugh, Gummow, Hayne and Heydon JJ,[146] their Honours observed that simply because a claim is framed in negligence, it invites error to begin the inquiry by focusing upon the question of whether there was a breach of the duty to take all reasonable steps to provide a safe system of work, and the associated issues of foreseeability and the reasonable response to risk as laid down in Wyong Shire Council v Shirt,[147] because to do so may fail to take into account ‘fundamental aspects of the relationship between the parties.’[148]

203 The Court held that the parties’ obligations under a contract of employment will necessarily have a bearing on the content of the employer’s duty of care and what may be required from the employer to discharge that duty:

The content of the duty which an employer owes an employee to take reasonable care to avoid psychiatric injury cannot be considered without taking account of the obligations which the parties owe one another under the contract of employment, the obligations arising from the relationship which equity would enforce and, of course, any applicable statutory provisions. … Consideration of those obligations will reveal a number of questions that bear upon whether … an employer’s duty of care to take reasonable care to avoid psychiatric injury requires the employer to modify the work to be performed by an employee.

What is important is that questions of the content of the duty of care, and what satisfaction of that duty may require, are not to be examined without considering the other obligations which exist between the parties.[149]

204 The Court emphatically repudiated the view that there is ‘only one question’[150] to ask where an employee claims damages from an employer for negligently inflicted psychiatric injury, namely, ‘whether this kind of harm to this particular employee was reasonably foreseeable’,[151] stating: ‘That proposition should be rejected.’[152] The initial question must lie in determining the content of the duty of care and the kinds of steps required of an employer in the particular circumstances of the case, informed, in particular, by the terms of the contract of employment.

205 The factors that are most likely to be relevant in determining the content of the duty of care, and what is required of an employer to satisfy the duty of care it owes, include both the nature and extent of the work being done by the particular employee; ‘and the signs from the employee concerned — whether in the form of express warnings or the implicit warning that may come from frequent or prolonged absences that are uncharacteristic’.[153]

206 An employee’s agreement to perform those very duties which are later found to be a cause of psychiatric injury may be of considerable significance in determining whether an employer has breached its duty of care. As the High Court said:

An employer may not be liable for psychiatric injury to an employee brought about by the employee’s performance of the duties originally stipulated in the contract of employment. In such a case, notions of ‘overwork’, ‘excessive work’ or the like have meaning only if they appeal to some external standard. … Insistence upon performance of a contract cannot be in breach of a duty of care.[154]

207 An employer’s obligations under a contract are not to be read subject to a duty to excuse performance if performance is injurious to psychological health, nor to be qualified by hindsight. In the absence of warning signs, an employer can assume that someone who enters into a contract of employment believes himself or herself to be capable of performing its duties:

[S]eeking to read an employer’s obligations under a contract as subject to a qualification which would excuse performance, if performance is or may be injurious to psychiatric health, encounters two difficulties. First, the employer engaging an employee to perform stated duties is entitled to assume, in the absence of evident signs warning of the possibility of psychiatric injury, that the employee considers that he or she is able to do the job. Implying some qualification upon what otherwise is expressly stipulated by the contract would contradict basic principle. Secondly, seeking to qualify the operation of the contract as a result of information the employer later acquires about the vulnerability of the employee to psychiatric harm would be no less contradictory of basic principle. The obligations of the parties are fixed at the time of the contract unless and until they are varied.[155]

208 The employer thus had a right to assume that Ms Koehler could perform the tasks she had agreed to perform without injury to her psychological health and it had no reason to suspect that she was at risk of psychiatric injury. Her complaints about the lack of time to cover the relevant territory did not, at the time they were made, give rise to any suspicion that her duties were putting her health at risk or the possibility of psychiatric injury. Rather,

[H]er complaints may have been understood as suggesting an industrial relations problem. They did not suggest danger to her psychiatric health. When she did go off sick, she (and her doctor) thought that the illness was physical, not psychiatric.[156]

209 We have already concluded that here, the contractual relationship between the parties was one in which there was no obligation on GWF to provide Larner with a 2IC; no obligation to appoint a National Logistics manager with an inclusive style who would work ‘hand in glove’ with Larner; and no obligation to ensure that Larner would not be required to spend any significant time or effort managing logistics at GWF’s South Australian operations. The obligation Larner assumed when he entered into the contract was to fulfil the role of Logistics Manager for Victoria and South Australia, a role carrying significant seniority, managerial responsibility and autonomy. GWF was entitled to assume, at the time of entering into the contract, that Larner was capable of doing the job for which he was appointed.

210 At the time the contract was made, on or about 1 February 2002, there were no signs warning of the possibility of psychiatric injury.


Brisbane Barrister – David Cormack

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