An employer owes each employee a duty to take all reasonable steps to provide a safe system of work.1 Where an employee develops a mental illness as a result of their work, can they sue their employer for breach of that duty? A recent decision of the High Court of Australia, Kozarov v Victoria  HCA 12, prompts consideration of that question.
Ms Kozarov worked at the Victorian Office of Public Prosecutions (DPP) as a paralegal between 1999 and 2009. Between June 2009 and April 2012, she was employed as a solicitor in the Sexual Offences Unit (SSOU) of that organisation. Her colleagues described her as a dedicated, hard-working, ambitious and loyal employee.
By the nature of her position, Ms Kozarov was exposed to abhorrent material of graphic nature on a daily basis. For example, she was required to review evidence, including video footage, of serious sexual offences being committed against children. She worked long hours and was responsible for a large caseload.
Understandably, Ms Kozarov’s work took a toll on her. Eventually, by April 2011, she had developed post-traumatic stress disorder (PTSD). While seeking help from a psychologist and taking a period of leave in February 2012 , she unsuccessfully sought to be moved out of the SSOU to work in another part of the DPP. On 20 April 2012, her employment was terminated.
In October 2016, Ms Kozarov commenced proceedings against the State of Victoria, claiming damages for personal injuries she alleged she sustained while working as a solicitor in SSOU. On 19 February 2020, Justice Jane Dixon upheld Ms Kozarov’s claim and assessed damages for $435,000.2 The Court of Appeal overturned that decision on 24 November 2020.3
The High Court heard Ms Kozarov’s appeal on 2 December 2021. On 13 April 2022, the High Court unanimously allowed her appeal, finding that the Court of Appeal erred in finding a lack of causation between the breach of duty and the appellant’s injury. Ms Kozarov was entitled to the damages award ordered by Jane Dixon J, plus costs.
High Court reasons
While the High Court was unanimous in the result, it offered 5 sets of reasons for that position. A common thread between those reasons was the finding that the State had caused the exacerbation of Ms Kozarov’s PTSD by failing to rotate her out of the SSOU.
A number of key events were relevant to the conduct of the case, and ultimately, to the High Court’s disposition.
First, the circulation of internal documents in the DPP between 2007 and 2009, including briefing papers and memoranda regarding vicarious trauma and burnout.
Second, Ms Kozarov’s attendance at monthly team meetings, where concerns as to workload and paranoia about her own children were raised.
Third, a 2011 memorandum prepared and signed by SSOU staff, including Ms Kozarov, that highlighted issues as to workload and stress and identified that staff were ‘not coping’.
Fourth, the preparation of a business case by Mr Brown, the directorate manager of the SSOU, in which he referred to staffing levels in the SSOU as being insufficient to cope with the workload of the unit.
Fifth, an email exchange between Ms Kozarov and Mr Brown on 29 August 2011, which the trial judge described as a ‘sentinel event’.4 The exchange occurred after Ms Kozarov returned from a period of two weeks sick leave. In an ‘emotional, dense and long’5 email from Ms Kozarov to Mr Brown email, Ms Kozarov vented various frustrations, as recounted by Gageler and Gleeson JJ at :
The appellant’s emails included multiple accusations (such as “you have labelled me”, “[y]ou have stripped my pride”, “[y]ou have shamed me today and made me feel that I have no incentive to work in [the SSOU]” and “[y]ou have made me feel I have no hope for permanent”); overgeneralised language (such as repetitious references to what was “always” and “never” the case); and melodramatic claims (such as claims that the appellant had apologised for being on sick leave “as it was beyond my control”; that the appellant had returned “ready to do my normal duties despite my doctor recommending I take further time to recover”; that “I am grateful for all your understanding … during times my children were sick and I would come into work and continue working as I had no care for them with them sleeping in my office”; and that “you can’t tell me where I have failed you despite saying it’s always my matters that need covering. Of course they need covering I cannot physically be in more than one matter in court to instruct”). The appellant referred to herself six times as “dedicated”, twice as “committed” and twice as “passionate”.
Kiefel CJ and Keane J played down the significance of the 2011 memorandum, noting that employees will routinely demand reduction in their workload. Otherwise, ‘the robust bargaining that is a familiar feature of industrial relations in Australia an occasion of peril for all concerned’ (at ). They eventually held that the respondent was in breach of its duty to Ms Kozarov from the ‘sentinel event’ in late 2011, and added, ‘indeed, in our view, the respondent was in breach of its duty from the commencement of Ms Kozarov’s employment’ (at ).
Gageler and Gleeson JJ honed in on the finding of the Court of Appeal that Ms Kozarov had not proved that the appropriate exercise of care by the State would have resulted in Ms Kozarov accepting a rotation out of the SSOU after August 2011 (at –). The Court of Appeal’s position ran contrary to evidence led by a leading psychiatrist that most people receiving appropriate advice in these circumstances would accept that advice, and the inherent likelihood that people advised of risk of serious psychiatric injury would accept advice to avoid those risks. On balance, they agreed that Ms Kozarov needed to be rotated out of the SSO, and that she would have accepted a rotation from August 2011 if it was offered.
Gordon and Steward JJ framed the core issue more broadly: ‘The primary question in this appeal is whether Victoria’s failure to provide Ms Kozarov with a safe system of work caused the exacerbation and prolongation of her PTSD, and subsequent development of [major depressive disorder]’ (at ). They answered ‘yes’, holding that Ms Kozarov would have cooperated with steps proposed by the DPP, including rotation out of the SSOU, to reduce her exposure to trauma, and that her exposure to trauma would have therefore been reduced (at –).
Edelman J agreed with the separate reasons of both Gageler and Gleeson JJ, and Gordon and Steward JJ. In his Honour’s characteristic style, he added observations about the conceptual approach of ‘ascertaining the liability of an employer for negligently failing to take reasonable steps to avoid allocating work, or creating a workplace, that causes or exacerbates psychiatric injury to an employee’ (at ). While separating out the issues of duty, breach and causation, and considering the bases by which the scope of an employer’s duty of care to an employee may be ascertained, he also held that the State had caused exacerbation of Ms Kozarov’s psychiatric injury, including by failing to offer her a rotation out of the SSOU (at ).
When will an employer be liable for mental harm inflicted upon employees?
An employer always has a duty to ensure a safe system of work for employees. But what constitutes a ‘safe system of work’ depends on the circumstances of the particular case. Similarly, whether an employer will be liable for mental harm suffered by an employee as a result of the employee’s work will depend on the circumstances of the case.
In Koehler v Cerebos (Australia) Ltd (2005) 224 CLR 44, for example, the High Court held that an employer was not liable for psychiatric injury sustained by an employee. The employee was employed as a sale representative and was required to visit a number of stores in a single day. She had told her employer she could not complete the task within the demanded timeframe. She suggested alterations to her role, which her employer ignored. She was eventually diagnosed as suffering from fibromyalgia syndrome, a psycho-physical disorder resulting in pain amplification, as well as anxiety and depression.
The majority held that a reasonable person in the position of her employer would not have foreseen the risk of psychiatric injury to this employee, for two reasons. ‘First, the appellant agreed to perform the duties which were a cause of her injury. Secondly, the employer had no reason to suspect that the appellant was at risk of psychiatric injury’ (at [27). They noted that the content of the duty owed by the employer was shaped by the obligations owed under the contract of employment the employee had agreed to do the work, and in complaining to her employer, at no time did she mention health concerns (at , )).
The nature of the work matters: it affects whether the risk of psychiatric injury is reasonably foreseeable, and therefore the scope of any duty of care. The work of a salesperson is distinguishable from that of a person who is exposed to abhorrent material, like that of Ms Kozarov, who may suffer vicarious trauma.
The Age Co Ltd v YZ (a pseudonym) (2019) 60 VR 189 provides a relevant example. ‘YZ’ was employed as a journalist, who was exposed to traumatic events working as a crime reporter and subsequently developed PTSD. She sued for damages for psychiatric injury in the County Court of Victoria and was awarded $180,000 general damages.6
On appeal, the Court of Appeal held that the employer had no obligation to delve into the employee’s capacity to do her work; nor was it required to adopt a system of work that included active monitoring of employee’s mental health (at –). The employer did, however, breach its duty to the employee by transferring her to report on another traumatic area after the employee had already indicated she was unable to continue in her present duties. With actual notice of the impact of the work on the employee, the ‘foreseeability of injury was heightened’, requiring further action to avoid further injury to the employee (at ). Notably, the Court of Appeal also held that failure to provide more ready access to the employer’s employee assistance program (EAP) did not amount to a breach of duty (at ).
In the case of Ms Kozarov, the risk of psychiatric injury was not just reasonably foreseeable—it was obvious. Kiefel CJ and Keane J opined at :
the circumstances of a particular type of employment may be such that the work to be performed by the employee is inherently and obviously dangerous to the psychiatric health of the employee (just as other kinds of work are inherently and obviously dangerous to the physical health of the employee). In any such case, the employer is duty‑bound to be proactive in the provision of measures to enable the work to be performed safely by the employee. The present was such a case.
Takeaways for pleading cases of this kind
The case has thus clarified that the proper approach to pleading a claim of breach of duty by an employer to an employee occasioning psychiatric injury will vary depending on the nature of the particular employment relationship and the requirements of the employee’s role. As always, care should be taken in pleading both the existence of the duty, its content, and the facts constituting breach.
Kiefel CJ and Keane J criticised the way Ms Kozarov’s case was presented. Her claim focused on whether there were ‘evident signs’ to the DPP of the possibility of Ms Kozarov’s psychiatric injury, relying on this dictum from Koehler:
Because the inquiry about reasonable foreseeability takes the form it does, seeking 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. (Emphasis added.)7
In the circumstances of Ms Kozarov’s case, the emphasis on ‘evident signs’ was unnecessary because the risk to the employee was inherent and obvious. Had her claim been framed to recognise that Victoria owed her a duty of care from the commencement of her employment, many of the factual issues that consumed the attention of the trial judge and the Court of Appeal would not have mattered.
The High Court’s decision will have significant implications for employers in industries in which their employees are, by nature of the position, exposed to graphic or challenging materials. Those who work in certain areas of the legal profession, social workers, psychologists and journalists may be at greater risk of developing PTSD and other psychiatric injuries.
While the facts of Kozarov v Victoria centre around a particularly difficult and traumatic role, the case provides lessons for many other kinds of employment relationships. All other things being equal, cleaning windows 20 stories in the air is more dangerous to one’s physical wellbeing than cleaning windows on the ground. Similarly, reporting on heinous crimes is more dangerous to one’s mental wellbeing than reporting on a community fundraiser. Employers should respond to the situation their particular employees face accordingly, lest they fail to discharge their duties of care.
Employers’ duties are heightened where they have a basis to realise the mental health of their employees, or any given employee, is at risk as a consequence of their employment. Particular care should be taken with respect to any employee who provides indication, express or implied, that their mental health is suffering. In certain industries, employers should simply assume their employees are at risk of psychiatric injury. For example, given the widely-reported prominence of mental illness in the legal profession, one might also consider whether the risk of psychiatric injury to a solicitor inheres in the role, even outside of organisations like the DPP.
Employers should not assume that offering access to an EAP, or an in-house ‘wellness’ seminar, will discharge their duty: a court’s disposition to the ‘reasonable steps’ necessary to avoid risk of psychiatric injury may differ from the disposition of a commercially-minded business owner. In certain cases, avoiding a future finding of liability in negligence will require the employer to alter the substance of an employee’s role.