Koehler v Cerebos (Australia) Ltd [2004] HCATrans 411 (26 October 2004)

--

Koehler v Cerebos (Australia) Ltd [2004] HCATrans 411 (26 October 2004)

Last Updated: 2 November 2004

[2004] HCATrans 411

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Perth No P61 of 2004

B e t w e e n -

NUHA JAMIL KOEHLER

Appellant

and

CEREBOS (AUSTRALIA) LIMITED

Respondent

McHUGH J
GUMMOW J
HAYNE J
CALLINAN J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON TUESDAY, 26 OCTOBER 2004, AT 3.44 PM

Copyright in the High Court of Australia

MS A.G. BRADDOCK, SC: If the Court pleases, I appear for the appellant with my learned friend, MR N.J. MULLANY. (instructed by Marks & Sands)

MR B.W. WALKER, SC: May it please the Court, I appear with my learned friend, MR D.R. CLYNE, for the respondent. (instructed by Dibbs Barker Gosling)

McHUGH J: Yes, Ms Braddock.

MS BRADDOCK: Your Honour, this appeal raises the question whether the Full Court in Western Australia took a proper approach to the test of foreseeability in cases of psychiatric injury concerning an employee, such as in the employment relationship – whether it applied the correct principles. To that end, I would say that it would appear that this is not a matter directly considered by your Honours, or by this Court, for something over 30 years. The Court has recently, obviously, considered the questions concerning psychiatric injury and foreseeability issues that arise in other circumstances, but not directly in the case of an employment situation.

GUMMOW J: We have now got the Hatton v Sutherland litigation in England, have we not - - -

MS BRADDOCK: Yes, your Honour.

GUMMOW J: - - - which does not seem to favour you. I am sure you will come to it.

MS BRADDOCK: Your Honour, I would not suggest that it is against us in any way, shape or form. It is not being suggested that the duty does not exist in relation to psychiatric harm in the employment context. It is clear that there is no difference in principle between physical and mental injury. The Court of Appeal in Hatton v Sutherland - - -

GUMMOW J: You had better give us the citation.

MS BRADDOCK: It is [2002] EWCA Civ 76 reported in 2 All ER 1 to 502.

McHUGH J: I notice that Dame Brenda Hale underwent a change of gender in the journey to Western Australia.

MS BRADDOCK: Yes, your Honours, that is something that had not escaped the attention of others, most unfortunate. I am sure she would find that somewhat extraordinary, but it is a long way from London here.

GUMMOW J: Not only in space, I think.

MS BRADDOCK: Her Ladyship in that case did, indeed, very helpfully in many respects to those who might come to decide cases that are after, summarise a great deal of the position in relation to foreseeability. I am referring your Honours to page 13 of the report, paragraph [23] and following. Your Honours, the paragraphs are extensive and I do not propose to quote from them at any length, but in reviewing the situation she said, at paragraph [23], amongst other things, whichever is the correct analysis:

The threshold question is whether this kind of harm to this particular employee was reasonable foreseeable. The question is not whether psychiatric injury is foreseeable in a person of ‘ordinary fortitude’.

Obviously, this decision predates your Honours’ in that regard, but there does not appear to be any difference of opinion between the position in England and the position in Australia in that regard. She goes on to say:

The employer’s duty is owed to each individual employee –

Your Honours, from there, at paragraph [25], on page 14, she says this:

All of this points to there being a single test: whether a harmful reaction to the pressures of the workplace is reasonably foreseeable in the individual employee concerned. Such a reaction will have two components: (1) an injury to health; which (2) is attributable to stress at work. The answer to the foreseeability question will therefore depend upon the interrelationship between the particular characteristics of the employee concerned and the particular demands which the employer casts upon him –

in our case, obviously, her –

As was said in McLoughlin v Grovers, expert evidence may be helpful although it can never be determinative of what a reasonable employer should have foreseen.

McHUGH J: But there are some problems with that statement of the test, are there not? It is not really a question of whether there is an injury to health or the injury is attributable to stress at work. It is a question of risk, which really requires the employer to look to the future, look at signs, look at the nature of the work and make a judgment as to whether there is a risk to the employee.

MS BRADDOCK: Your Honour Justice McHugh is absolutely correct. There are two factors. There is the work itself and the worker and how they interrelate. Perhaps if I might back a little up in that particular judgment of the Court of Appeal to the preceding paragraph at the bottom of page 13, which is well into paragraph [24], wherein Lady Justice Hale says:

The notion that some occupations are in themselves dangerous to mental health –

and that, of course, is in the context of teachers and social workers, which were under consideration in those cases –

is not borne out by the literature to which we have already referred: it is not the job but the interaction between the individual and the job which causes the harm. Stress is a subjective concept: the individual’s perception that the pressures placed upon him are greater than he may be able to meet. Adverse reactions to stress are equally individual, ranging from minor physical symptoms to major mental illness.

I pause there, your Honours, to say, with the greatest respect to her Ladyship, that is, in fact, a very crucial observation. She is making that observation, in a sense, in the preamble to setting out at greater length various factors that might go to be considered, upon which the Full Court did dwell.

The point being made there, I think, your Honours, is that it is not necessary to have expert evidence to appreciate that stress, once one has a situation of a finding that a situation is stressful, it is known and can be stated from commonsense principles that reactions, adverse reactions, are individual and cover a wide range of possibilities from, according to the Court of Appeal, “minor physical symptoms to major mental illness”. Your Honours, I will return to that, but effectively, what we would all know, a stressful situation can induce headaches, can induce susceptibility to physical illness, coming down with the flu, or can induce a nervous breakdown of a greater or lesser severity, and everything in between. It is our respectful submission that that is, in a sense now, in the public domain of common knowledge once you get to a situation where one is talking about a stressful work arrangement.

We say, your Honours, that the Full Court decision is in error and that I will demonstrate in a moment - - -

GUMMOW J: Wait a minute. You have not taken us to the summary in the Court of Appeal at paragraph [43] yet, which is the heart of this, and, in particular, proposition (3):

Foreseeability depends –

I guess, as Justice McHugh says to you, it is foreseeability of risk, I suppose –

upon what the employer knows (or ought reasonably to know) about the individual employee. Because of the nature of mental disorder, it is harder to foresee . . . An employer is usually entitled to assume that the employee can withstand the normal pressures of the job unless he knows of some particular problem or vulnerability.

MS BRADDOCK: Yes, your Honour, and that is indeed part of the summary that she is there setting out at paragraph [43] of the judgment. And it is significant, I would suggest, that what she is saying is, you have to know about the individual employee, because you are looking at the individual rather than some notional employee, and what she says – and it is significant in this case, I would suggest:

An employer is usually entitled to assume that the employee can withstand the normal pressures of the job unless he knows of some particular problem or vulnerability.

That is central, in our submission, to a proper approach to this particular fact situation. It is also central, I would respectfully suggest, to the demonstration of the error in which the Full Court found itself, because, your Honours, if one turns to - - -

McHUGH J: But there is a problem though, is there not, with talking about the normal pressures of the job? It depends what you mean by “normal”. If the “normal pressures of the job” is that you worked in a state of mental breakdown, then it could hardly be right that you escape liability.

MS BRADDOCK: Your Honour is suggesting that certain forms of slave driving and certain forms of oppression - - -

McHUGH J: No, I am not.

MS BRADDOCK: - - - if sufficiently widespread to attract the label “normality” could escape from liability if mental illness resulted.

McHUGH J: It seems to me there must be some other standard than the “normal pressures of the job”. It is rather self-defining in terms of risk, is it not?

MS BRADDOCK: It is something of a difficult overall concept to define what it is. Are we talking about normal people, normal pressure – there has to be something to give a way of expressing what the courts are grappling with in these situations. Your Honour Justice McHugh, in Annetts’ Case, I think, talked about “reasonable preventability” in a slightly different context, but that is sort of what we are coming back to. You have to say, “This is the situation. This is the job that is being done. Is that within reasonable tolerable limits or has it gone a bit over? This is the person who is doing it. Are they really up to the job? Can we make those demands upon this particular person in these circumstances for this period of time? And if it seems that that might be giving rise to some degree of risk, what do we have to do to bring that risk within tolerable, reasonable limits?” What is a reasonable step that you would take or that the employer should take to obviate the risk coming to reality?

HAYNE J: But all of this is being judged ex post, correct?

MS BRADDOCK: By very definition of the system, your Honour.

HAYNE J: Therefore, what is the standard that is being engaged ex post? You know that the person has a recognisable illness. Presumably, you are in the position of knowing, as a result of the expert evidence that has been led, that a factor, the chief factor – let us walk around that kind of problem – that brings it about is what was happening at work. What is the next step or series of steps that are encompassed by the kinds of description either that we see in Hatton v Sutherland or that you say should be engaged?

MS BRADDOCK: Firstly, your Honours, one would start by saying, well, what is the job that is being required to be done? Is it a job that has been done within that job description for a long time and brought no harm – that we know of – of this kind to bear upon any person doing so? If one has a standard job such as, for example, if one is simply engaged to sweep the floor and clean the Federal Court building after the court has finished every day, and everybody has been doing that for many years and no harm has come within a 7 hour shift, et cetera, you start with, well, it seems from historical experience that this job has reasonable demands and the employees that we have had to date have been able to accomplish this job without falling into either a physical heap or into a mental breakdown.

HAYNE J: That seems to be focusing attention on what is happening in industry at large. I can understand that, but I thought that an element that emerges from Hatton v Sutherland, if that is the appropriate path to follow, is focus upon the individual employee, not upon employees at large or employees doing work of the same kind. What is it about the individual employee that is being judged or considered relevant?

MS BRADDOCK: Your Honour Justice Hayne, one might venture to suggest there would be an assessment of the competence of the person. Had the person been properly trained, had they showed themselves able and apt to perform the requirements of the job without difficulty, had they been engaged on the basis of having experience of performing the job with decent references, et cetera, and, indeed, are they known to be keen and competent and enthusiastic, have they got perhaps strengths and weaknesses – all those factors that in modern employment management one would take into consideration in assessing what you can expect your employees to do within reasonable parameters.

HAYNE J: But there are at least two kinds of case that emerge. First, there is the employee who explicitly/implicitly is seen to cry for help. That cry may come in form of the explicit statement, “I am having difficulty coping. Please relieve me, please give me help”. It may come in other much more subtle ways. There is then the question, if you are to focus on the individual employee, of the employer being put in the position of interpreting, more relevantly, inquiring – dare I say prying – into what else is happening in that employee’s life, “You appear stressed. What are we to do?” or “Is all well at home?” Now, is that the path we are driving down? Because it seems to be putting the employer in an unusual position.

MS BRADDOCK: Your Honour, not exactly. It comes back, I would suggest, with respect, to Lady Justice Hale’s conjunction of looking both at the job and the employee. If you have a job that is within well established, normal parameters, that the employee has been doing without difficulty, for example, for - - -

McHUGH J: Yes, but what are the normal parameters may only be evaluated by reference to whoever is doing the job. Take a position in the law. Take Crown prosecutors and assume a very heavy caseload. It may cause no stress at all to a member of the Bar who has had 15, 20, 25 years of experience in the jurisdiction, knows the cases, has plenty of experience in conducting trials, can listen to case after case after case, back to back, put a raw junior barrister of two or three years standing in that situation and load that barrister up with the cases, and you might end up with a person having a nervous breakdown. What do you mean by “normal pressures” in that case? There may be plenty of barristers who can deal with the situation quite easily, it is normal to them, but to others it is not. It has nothing to do with a particular vulnerability, I would have thought.

MS BRADDOCK: No, your Honour, but your Honour is drawing an analogy to barristers, say, taking those pressures where, in fact, perhaps the more apposite analogy would be to employed persons – as would be the case in the State of Western Australia – persons employed in the Department of the Director of Public Prosecutions, where they are actual employees and where - - -

McHUGH J: That is what I actually had in mind, they have Crown prosecutors. In New South Wales and other States, they are actually employed, unlike in England.

MS BRADDOCK: Your Honour, then if one steps back and says, if you are the Director or the Director’s chief executive in charge of personnel matters or a person of that kind, if you are the person charged with the responsibility of overseeing the employment of persons, you would expect in those circumstances – I have to be careful what I say – to have some form of system in place to ensure that the people at the two or three years qualified level are not overloaded with work that is appropriate to persons who have been practising for 20/25 years. You would have to have some sort of ability to assess what exactly it is those younger members of your staff were actually having to do and some form of feedback or form of supervision to ascertain whether they were, in fact, coping, because as your Honour, Justice McHugh has indicated, some people may thrive in circumstances that others would find unbearable, cumulatively. I am not, obviously, talking about one week’s work - - -

McHUGH J: This sort of thing might apply to Judges’ and Chief Justices’ duties. Justice Gummow may be able to work 100 hours a week without suffering any stress. but there may be many others – we just throw them in, they just crack up in the first couple of weeks.

MS BRADDOCK: Your Honour Justice McHugh is drawing us into an area which one had to fear that one might have to address. To whom would the Justices complain if they felt that the workload was something with which they were not able to cope, or what systems would be in operation in those circumstances? Perhaps we are dealing with, shall we say, lesser mortals in terms of the cases before this Court rather than the cases that this Court is actually creating or writing. Your Honour, it does direct the argument, it does direct my consideration to the position of, yes, there is a huge variety in humanity and a huge variety in the abilities of people who may be employed to do jobs.

McHUGH J: What I am interested in and what Justice Hayne’s question indicates he is interested in is, what are the criteria upon which one judges this question of reasonable foreseeability of risk? I am not sure that you are assisted much by talking about the normal pressures of the job.

MS BRADDOCK: Your Honour, I think it might be suggested that that, as an expression, is useful to distinguish the situations where you have somebody who has been doing a job for a period of time, and perhaps, as your Honour Justice Hayne postulated, there might be other factors operating on the individual that meant that the job became, or appeared to be becoming, a bit of a strain, because of matrimonial difficulties at home or illness in the family, and a situation where you have a job that is itself under change, or has not been properly defined or managed, which would bring this into the situation of this instant case.

So the first thing, I would suggest, that one does look at is, what is the job? I think that is what the Court of Appeal was getting at in terms of the “normal pressures of the job”. Is the job itself – has something happened to this job, or is it just that this is what schoolteachers do, or that is what social workers do, or that is what police officers do, or that is what sales executives do? Is there something different about this job that this individual was asked to perform? That is on the one side of it. On the other side of it, you look at the employee themselves and you have to make an assessment, you know the character of the person. Employers should perhaps be aware there are some persons that might be described as workaholics, who cannot be prevented from working 100 hours a week or every day, all year, and, as the person responsible for managing the employee, it is part of management’s responsibility not just simply to accept every offer of enthusiastic help to the point that danger ensues.

If one were to perhaps go to the other end of the legal spectrum and take an articled clerk, an able, bright, enthusiastic articled clerk employed by a large firm of solicitors, who is equal to, they thought, anything that might be thrown at the particular individual and very keen and worked very hard and very effectively, engaged in a large piece of litigation, who then, it was found, was being subjected to additional demands, not just from the partners and the associates, but that counsel was then pressing additional demands on the articles clerk during the course of litigation, ringing them up at 3 o’clock in the morning and expecting things to be done by 9 o’clock, and that this was going on – say it was a long piece of litigation, such as Bell Resources or something of that kind, and it was going to run for years – would it not be improper and dangerous, knowing that that situation was going ahead and continuing to go ahead – anybody can put up with anything for a week – to permit that person to be used in that way, no matter how enthusiastic they might be?

You would not have to be particularly soft-hearted, even as a senior partner in a law firm, to see that not even the keenest and youngest can necessarily withstand that sort of pressure over a long period of time. That is part of your duty.

GUMMOW J: What is supposed to be done? At one level, you could dismiss this employee, then you are in trouble under the disability legislation because you are discriminating against them for their impairment. At the other end, you reduce their burden and make them an uneconomic employee from your point of view and damage your own enterprise.

MS BRADDOCK: Justice Gummow, that is one of the difficulties, that there is a tension between economics and safety, profit and health. There is a tension, and there has to be a rational response to that. The answer in the example - - -

GUMMOW J: Is the rational response you posit really rational on this case, where there seemed to be no indication of psychiatric problems, externally anyway? There was a view taken that it was a physical problem. It is only later that we know what was really the problem in this person.

MS BRADDOCK: It is our submission that it is not a requirement that there needs be an overt indication of a psychiatric problem as a precondition to liability. It may be, in some cases, that there will be. The cry for help may be, “If you do not take some of the burden off me, I am going to have a nervous breakdown”. It may be as explicit as that. It may be, as we found in some of the cases, that there have been prior instances of taking time off work and being certified unfit through stress or depression, but it is not a precondition.

If I might simply come back a moment to the articled clerk. The proper answer, I would suggest, or the proper response would be to employ another articled clerk, which would meet with approval within the profession in this State, certainly if not within the particular managing partner’s budget. You employ another articled clerk to ensure that the one is not overburdened. And, yes, there is an economic consequence, and that is why there needs to be a rational response to the economic versus health equation.

GUMMOW J: You say to “ensure” that they are not overburdened.

MS BRADDOCK: To attempt to see that they are not obviously overburdened, work at the hours that are being expended by one and what one would expect would divide nicely between two and not leave them twiddling their thumbs, your Honour. You might think that that would be a reasonable and rational response, as well as a contribution to the education of the profession. But, your Honours, to come to this particular case - - -

GUMMOW J: But there is a vast oversupply of lawyers.

MS BRADDOCK: And graduates, your Honour.

GUMMOW J: And graduates, yes, and they are all competing in great numbers for a small number of jobs. Some of them are as fit as a flea and going to remain as fit as a flea. Now, why does the law look towards the interests of the others if they are weaker brethren?

MS BRADDOCK: I am not sure, your Honour, that the law is necessarily looking towards the interests of the weaker brethren. I would suggest that it is more a question of the employer of the articled clerk not exploiting detrimentally the enthusiasm of that young person in that particular case.

GUMMOW J: But there are other young persons who are perfectly willing to be exploited.

MS BRADDOCK: But if that, your Honour, is to the detriment of the health of the articled clerk, then inasmuch as it would be inappropriate in the 19^th century to have had willing, enthusiastic people working on unfenced machines, it is inappropriate in the 21^st century to have willing, enthusiastic people working - - -

GUMMOW J: I think a lot of large law firms may have unfenced machinery, in a metaphorical sense.

MS BRADDOCK: Unfenced photocopiers, your Honour.

GUMMOW J: Yes.

MS BRADDOCK: That is the stark change, in fact, that we are perhaps addressing, that in the 21^st century - - -

GUMMOW J: We may be changing back, if that is right. I encourage you to face up to it.

McHUGH J: You see, the real problem is this. An employer sees an employee who is working efficiently and getting good results. The employer, naturally, or whoever the manager is, keeps giving that person more and more tasks. Ultimately, the person may crack, but, if there are no signs of that person cracking, why should the law impose a liability on the employer to pay damages for the consequence of it? The employer, by hypothesis, has had no warning signs.

MS BRADDOCK: In this case, the instant case, your Honours, whilst there might not be signs in the sense of crying out, “I’m about to have a nervous breakdown”, there were a significant number of complaints made by the appellant and those complaints have to be understood in the context of her being a very enthusiastic and able employee. She was a lady who had been given the award for Employee of the Year the previous year. She
had a very positive attitude to her goals that she wished to meet, she wished to be a good salesman, she enjoyed working for the firm. So complaints in that context, as opposed to complaints in the context of an employee who was always whingeing, would have, one would suggest, with respect, to be taken very seriously.

Similarly, if one took it back to the legal office situation, if one had a never-ending quantity of word processing and typing, as there often is, and a willing employee, amongst a pool of half a dozen, the one who was always likely to respond if you gave them, “Can you just do this in a hurry? I need this by 10 o’clock tomorrow morning?”, and the one employee was always the one who was working late, who was putting out the volumes of paper and was never actually saying, “This is a bit much”, was, in fact, priding him or herself upon that attitude to work, would not the responsible senior employee or the responsible partner still have a duty to say, “Excuse me, but what is going on in my office? Is that person not being set up for an occupational injury, whether it be of a mental or physical kind?” The willingness, the enthusiasm and desire, no doubt, perhaps to earn the overtime, does not absolve the employer of the responsibility of taking that overview, that management view, as to whether that is in the interests of the health of that particular employee.

McHUGH J: I see it is after 4.15 pm. How long do you think your submissions will take, Ms Braddock?

MS BRADDOCK: Perhaps an hour, your Honour.

McHUGH J: Mr Walker?

MR WALKER: About the same.

McHUGH J: Thank you. The Court will now adjourn until 10.00 am tomorrow.

AT 4.17 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 27 OCTOBER 2004