A recent Queensland case is a timely reminder for employers to ensure they are properly managing employee relationships, including monitoring any personality clashes.

In Leigh Sheridan v Q-Comp (C/2008/48) (6 May 2009), President Hall of the Queensland Industrial Court made it clear that it is possible for an employee to be successful in a workers’ compensation claim for psychological or psychiatric injury even where the source of the injury is a personality clash with another employee.

Adjustment disorder

The employee made a workers’ compensation claim for adjustment disorder, alleging numerous stressors contributing to her injury, including:

  • ongoing and continuing harassment by a female co-worker
  • an incident involving verbal abuse by the female co-worker
  • an unfair workload as a result of the female co-worker’s work practices, and
  • reorganisation of the employee’s workspace during her absence from work, resulting in a stressful return to work.

The employer’s insurer rejected the workers’ compensation claim. Q-Comp affirmed the insurer’s decision.

The employee appealed to the Industrial Magistrates Court of Queensland. The Industrial Magistrate heard a seven-day trial and affirmed Q-Comp’s decision. The employee appealed to the Industrial Court of Queensland.

Decision quashed

The Industrial Court quashed the Industrial Magistrate’s decision on the basis that the reasoning contained in the Industrial Magistrate’s decision was not sufficiently clear regarding why the Industrial Magistrate:

  • preferred the evidence of Q-Comp’s witnesses to that of the employee to the extent of any conflict, and
  • adopted Q-Comp’s submissions on a number of occasions throughout the decision.

President Hall of the Industrial Court held that a “clash of personalities” being the source of an employee’s psychological injury does not of itself result in that employee’s claim being unsuccessful.

In particular, President Hall stated that the “egg-shell psyche” principle applies in psychological or psychiatric injury claims similarly to the “egg-shell skull” principle in physical injury claims. The “egg-shell psyche” principle in the workers’ compensation context requires a defendant insurer to take the employee as they find them. Provided the events within the workplace are real rather than imaginary, it does not matter that they impact upon an employee’s psyche because of a flawed perception of events attributable to a disordered mind.

This was in response to the Industrial Magistrate’s adoption of Q-Comp’s submission that “any difficulties she had in the workplace were perceptions she held which were on the evidence, totally unfounded. Any problems the [employee] had with [the female coworker] are more accurately described as a clash of personality...”. President Hall said that the case appeared different to one in which the psychological disorder arose out of or in the course of an employee’s expectation or perception of reasonable management action taken against the worker, because:

  • the action by the female co-worker was not management action, and
  • it was not clear on the evidence that any action had been taken by management against the female co-worker that could be the subject of the employee’s perception or expectation.

The Industrial Court found that “the inability of a worker to psychologically cope with an attitude or manner of another worker is analogous to a worker being unable to cope with any other feature, including a physical feature, or aspect of the work environment.”

President Hall refused to substitute a decision for the decision of the Industrial Magistrate on the basis that there were several issues that needed to be properly considered in the course of a trial as compared to an appeal process and referred the matter back to the Industrial Magistrate’s Court for a new trial.

Lessons for employers

It is unclear from President Hall’s decision whether the Industrial Magistrate’s consideration of the “personality clash” was sufficient of itself to require a rehearing of the matter. Accordingly, employers should consider whether their management of a personality clash between employees is done effectively and in a reasonable way to avoid the risks of:

  • workers’ compensation claims
  • unfair or unlawful dismissal claims
  • discrimination claims under state and federal anti-discrimination legislation
  • adverse action in relation to workplace rights claims, and
  • discrimination claims under the Fair Work Act 2009 (Cth).

Some suggestions to assist employers in managing employee relationships:  

  • develop an employee interaction policy, code of conduct or code of behaviour
  • develop a grievance procedure for breaches of policy, codes of conduct or codes of behaviour
  • ensure effective implementation of policies and procedures, including training employees, and
  • manage employee relationships, particularly through performance management.