The Victorian Supreme Court recently awarded a bookstore employee nearly $600,000 in damages, finding that her employer breached its duty of care by failing to address bullying and harassment in its workplace.

Swan v Monash Law Book Co-operative [2013] VSC 326

The Facts  

Ms Swan, the plaintiff in the proceedings, commenced work for the defendant, operating under the name Legibooks in 2002. Legibooks was a specialised law book co-operative that sold law books at discounted prices to law students and operated in the basement of the law building at Monash University. The co-operative was managed by a board of directors made up of current and former students of Monash University Law School.  

At the time when Ms Swan commenced work, the defendant also employed Mr Cowell, who was the bookstore’s manager. Both employees worked on a permanent part-time basis and while Ms Swan was employed as Mr Cowell’s assistant, the defendant led her to believe that their positions were of equal standing and worth. Neither employee had a written employment contract or job description.  

In March 2003, Ms Swan made a complaint to the defendant about Mr Cowell’s behaviour, including two separate incidents in which he threw a book at her and a calculator. She also stated that Mr Cowell had threatened to fire her and spoke to her in an intimidating and sarcastic way. The defendant assured her that Mr Cowell did not have the power to terminate her employment.  

The defendant held a board meeting less than a week after receiving Ms Swan’s complaint. During that board meeting the defendant acknowledged that Mr Cowell’s behaviour could cause damage to Ms Swan and discussed their obligations as the employer. The defendant discussed implementing written job descriptions, employment contracts and workplace policies and a mediation. Ms Swan was advised about these proposed measures and was happy with the proposed course. However none of these measures were implemented and Mr Cowell was not counselled about his behaviour.  

Between 2003 and 2007 Ms Swan continued to be subjected to bullying from Mr Cowell. She described that she left belittled, humiliated and constantly put down through Mr Cowell’s sarcasm. The situation came to a head in July 2007 when, as a result of Mr Cowell’s ongoing behaviour, Ms Swan suffered a breakdown. Foreseeable risks and foreseeable damage result in significant costs for one Victorian employer The Victorian Supreme Court recently awarded a bookstore employee nearly $600,000 in damages, finding that her employer breached its duty of care by failing to address bullying and harassment in its workplace. Lawyer, Katie Kossian examines the case.  

Following Ms Swan’s breakdown the defendant engaged a workplace consultant and a professional counsellor for both employees, but failed to provide Ms Swan with an appropriate return to work process. As a result of that failure, and her deteriorating mental health, Ms Swan felt that she was unable to continue working for the defendant, or for any other employer and commenced proceedings against the defendant for negligence.  

The Findings  

Justice Dixon was highly critical of the conduct of the defendant in failing to address a reasonably foreseeable risk to Ms Swan’s health and safety, in circumstances where the defendant was aware of both its legal obligations and the risks associated with its failure to properly manage Ms Swan’s complaint.  

In particular, Justice Dixon identified a number of ways in which the employer had breached its duty including:  

  • Failing to properly define the respect roles of the employees and provide written position descriptions, employment contracts and workplace behaviour policies as it was apparent that the absence of these documents contributed to the ongoing conflict in the workplace.
  • Misrepresenting to Ms Swan that these documents preparation was imminent when it wasn’t.
  • Relying on the choices of Ms Swan about the appropriate way to manage the risks in the workplace, particularly when those choices were made having regard to the misrepresentations of the defendant.  
  • Failing to conduct an investigation of the working environment or using any risk management strategies to assess the risk in the workplace.  
  • Failing to have a formal system through which employees could seek assistance when bullying occurred.  
  • Assuming that just because Ms Swan’s complaints to the defendant were not ongoing meant that risks to her health and safety had disappeared.  
  • Failing to implement an informal procedure for dealing with workplace conflict even in circumstances where the defendant determined in March 2003 that formal disciplinary action was not required.  

Justice Dixon accepted that the Ms Swan had sustained a permanent and debilitating psychiatric injury including a major depressive disorder, generalised anxiety with features of traumatisation and posttraumatic stress disorder.  

Having determined the defendant’s liability, his Honour awarded Ms Swan $292,554.38 for past and future economic loss and an additional $300,000 for pain, suffering and loss of enjoyment of life.  

Lessons for Employers

With the increasing focus of regulatory bodies on workplace bullying, employers should be vigilant about risks of workplace bullying and their legal obligations to ensure the health and safety of their workforce. In particular, employers should make sure that they have clearly articulated policies dealing with bullying and harassment, appropriate grievance procedures and training for all staff and management.  

In circumstances where a complaint about bullying is made, that complaint should be treated seriously and promptly investigated. Even in circumstances where an employer determines not to take any formal action, employers should be mindful that it may still be necessary to do a risk assessment and manage any issues of workplace conflict through informal processes.