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How can an employee who suffers psychological injury from bullying and harassment recover Fair Work compensation as well as injury damages?
Consider the case of Vivienne Leggett, a sponsorship and marketing manager at the Hawkesbury Racing Club Limited, who had been in continuous service there from age 28.
Vivienne terminated her employment in March 2017 as a result of bullying and harassment at the hands of new CEO Greg Rudolph.
Rudolph – a former senior racing steward and son-in-law of NSW chief steward Ray Murrihy – who took up his position in May 2016, confronted Leggett two days into the job telling her that she “was earning too much money”.
He immediately challenged her by way of repetitive emails on the legitimacy of this expense and that expense – all of which were routine –and unnecessarily putting her to task to document every aspect of her role and her commission-based remuneration package.
By declining to sign off on various requests and withholding payment of her FY 2016 bonus, he signalled to her a distrust in her execution of a job she had carried out in an exemplary fashion for 25 years.
Vivienne warned in July that as a consequence of his bombardment, she was “losing sleep and constantly thinking about these emails”, complaints she also revealed privately to several board members.
Confrontations continued over the next few months until she complained in writing to Rudolph in October 2016 about the “untenable situation” and being “downtrodden”. She requested that the board be notified of her complaint.
His response was to summon her the next day for a performance discussion – with the option of bringing a ‘support person’ – implying there were deficiencies in her work performance that she was required to address.
Sickened by that intimidatory email, she consulted her GP who issued a medical certificate to the effect that she was unable to work or answer emails or calls for the following week due to stress.
Rudolph complained that she had “pulled a ‘stress leave’ certificate” and then withheld payment of commissions on sponsorships she had organised and managed.
In later doctors’ reports, Vivienne reported depression, fatigue, anxiety, feelings of worthlessness, and suicidal thoughts.
She terminated her employment in March 2017 by accepting the club’s repudiation of her contract in that it failed to honour her employment terms. She has not worked since.
Proceedings were begun in the Federal Court of Australia in 2019 for compensation under the Fair Work Act and the Workers Compensation Act.
She had by then already received in December 2017, $120k by order of the NSW Workers Compensation Commission for her psychological injuries.
The matter came before His Honour Justice Steven Rares in Sydney for a three-week trial in October and December 2021.
Vivienne’s Fair Work compensation ask alleged “adverse action” on the part of HRC by its failure to pay commissions because such failure was in retaliation for taking sick leave; and by summoning her to the performance meeting because that was in retaliation against her written complaint the day before.
Justice Rares took the view that Rudolph’s bullying behaviour was intended to manoeuvre Ms Leggett into a forced resignation. His evidence was ‘implausible’ and he was found to have a contemptuous disregard for the employee.
The judge found such conduct met the Safe Work Australia definition of workplace bullying namely, “repeated and unreasonable behaviour directed towards a worker… that creates a risk to health and safety [for example] abusive comments, aggressive or intimidating conduct, unjustified criticism or complaints, setting unreasonable timelines or changing work arrangements to deliberately inconvenience a particular worker”.
FWA s 361 creates a presumption that the actions – namely the performance review and the withholding of commissions – were taken for the reasons alleged, it was up to the racing club to prove otherwise, ie that they were not in retaliation.
Notwithstanding, Justice Rares was “positively satisfied” that Rudolph had demanded her attendance at the meeting and withheld the commissions inter alia, because of her complaint and because she had “pulled a ‘stress leave’ certificate”.
He agreed with Vivienne’s contention that the club “was evincing an intention not to be bound by the contract” and that she was entitled to accept that conduct as a repudiation.
He then went on to give directions as to how the “substantial damages” should be assessed taking into account her damages entitlement for her psychiatric injury under the NSW Workers Compensation Act, ie past and future loss of income which is all the Act allows to be recovered.
His Honour held that HRC was estopped by way of issue estoppel from denying the content of the Workers Compensation Commission ruling as to the extent of her injury – a 19% impairment – and that her condition was as a result of the conduct of its CEO.
He held that Vivienne’s cries of help and the obviously “demeaning” and “increasingly intense” nature of Mr Rudolph’s conduct, calculated as it was to cause stress to the employee, was such that a reasonable employer ought to have been aware of the risk of injury.
Vivienne’s annual remuneration was upwards of $150k. His Honour awarded her the present value formulation of $2,300 per week – the maximum weekly earnings figure under the Act – escalated annually at 2%, until age 67 with a 17.5% discount for vicissitudes.
In addition, because the club contravened a civil penalty provision – by its adverse actions and by withholding long service leave – a Fair Work compensation order pursuant to FWA s 545 (1) and 29 (b) was warranted.
In doing so, Justice Rares noted the FWA “is not constrained in respect of the compensation that can be awarded by the separate operation, in a different sphere, of the State Workers Compensation Act”.
Mr Rudolph “effectively destroyed Mrs Leggett’s life,” he wrote in a 55-page judgment. “She cannot work and is permanently incapacitated from doing so by a very serious psychiatric illness that may never be cured or ameliorated to any significant degree”.
The Fair Work compensation awarded was for the additional sum of $200k.
Leggett v Hawkesbury Race Club Limited (No 3) [2021] FCA 1658 Rares J, published 2 February 2022
Categories: adverse action , psychological injury , office worker injury