By Charles Power

[Ed note: In Monday’s bulletin, Charles Power discussed the recent decision of the NSW District Court in Trolan v WD Gelle Insurance and Finance Brokers (2014). This case concerned an employees’ claim in negligence for psychological injury, caused by a director’s sexual harassment, intimidation and bullying.

You may recall that the Court found that the employer was both:

• vicariously liable for the conduct; and
• liable for negligence, as it failed to meet its duty to take reasonable steps to prevent harm to the employee.

Monday’s bulletin focused on how an employer can be vicariously liable for an employee’s actions. Today’s bulletin examines an employer’s duty of care under common law principles…

Until next time…]

What is common law?

As you probably know, common law refers to the principles and precedents laid down by courts through decided cases. This is different to the role courts play in interpreting and applying:

• statutory schemes for workers compensation’ and work health and safety; and
• legislation that provides remedies for bullying, sexual harassment and discrimination.

When does your common law duty of care arise?

The common law recognises that you, as an employer, owe a non-delegable duty to your employees to take reasonable care to avoid exposing them to an unnecessary risk of injury in the workplace.

Your common law duty of care arises when you can reasonably foresee the risk of injury to an employee.

When will you be negligent?

If you fail to take reasonable care to avoid injury being caused to a person you owe this duty of care to, you will be negligent.

This means that once you become aware of any bullying, intimidation or sexual harassment in your workplace, you are required to stop the employee from being exposed to this conduct.

In Trolan, the Court found that the employer’s duty was activated when:

• another company director received a complaint from the employee explaining the impact of the conduct on her; and
• it was made aware that the employee went on sick leave for psychological reasons as a result of the conduct (as well as verbally informing the employer of this, the employee provided a medical certificate that included this information).

How could negligence have been avoided?

A reasonable employer aware of the circumstances in the Trolan case would have taken steps to protect the employee. The employee’s psychological illness – and the employer’s liability for negligence –  could have been avoided by:

• the director being counselled to desist by the other director;
• the director himself, as the controlling mind of the company, realising he should stop;
• the director being given appropriate remedial counselling from a skilled professional, to help him to realise that his behaviour was wrong, inappropriate, and should cease; and
• a facilitated workplace conciliation or a mediation.