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Employer's duty of psychosocial care in the workplace examined: the Kozarov decision

By Catherine Dunlop, Amber Davis, Lyndel David & Matthew D'Angelo

• 19 April 2022 • 10 min read
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[Warning: This article references instances of suicide]

Employers and employment lawyers alike have anticipated the High Court’s decision in Kozarov as a significant judgment on an employer’s duty to employees in respect of mental health in the workplace.

Ms Kozarov sought damages in respect of psychiatric injuries that she alleged were sustained during the course of her employment as a solicitor in the Specialised Sexual Offences Unit (SSOU) of the Victorian Office of Public Prosecutions (OPP). In this role, Ms Kozarov worked on child sexual abuse claims. Ms Kozarov suffered a chronic post-traumatic stress disorder (PTSD) and a major depressive disorder (MDD), as a result of her cumulative exposure to vicarious trauma in her casework.

Guidance on the extent of this duty has been long awaited, particularly given the current focus on psychosocial hazards and the Victorian Government’s proposed inclusion of specific provisions in the Occupational Health and Safety Regulations 2017 relating to psychological health, and pending similar regulations we expect for jurisdictions underpinned by the Work Health and Safety Act 2011.

In three separate judgments, the High Court upheld Ms Kozarov’s claim to damages and found that the State of Victoria’s failure to provide Ms Kozarov with a safe system of work exacerbated and prolonged her PTSD and subsequent development of MDD.

In doing so, the High Court detailed several principles when considering an employer’s duty to avoid or reduce the risk of psychiatric injury of employees.

How did we get here?

The case has a lengthy procedural history.

Initially, Justice Dixon in the Supreme Court found that the OPP was liable to Ms Kozarov in negligence and awarded her damages, in two important respects:

  1. the OPP had a duty to undertake reasonable steps to avoid or minimise risk to Ms Kozarov’s mental health because it had been placed on notice of such a risk (Notice Finding).
  2. Ms Kozarov would have accepted an offer to rotate out of the SSOU and work in another section of the OPP and this rotation would have avoided exacerbating her PTSD (Rotation Finding).

Justice Dixon found there were at least nine evident signs Ms Kozarov was failing to cope with her allocated work and that her mental health was at risk, including that Ms Kozarov signed a staff memorandum containing complaints about the health impacts of the workload in the SSOU and was allocated a particularly traumatic matter despite her excessive case load and resistance to taking the matter.

    Ms Kozarov gave evidence at trial that while psychological support existed for SSOU employees, she was often in court when it was available. Further, Ms Kozarov did not feel comfortable speaking with a psychologist at the SSOU as the offices were glass walled and she did not want her colleagues seeing her in a bad state.

    When asked about their failure to ask Ms Kozarov about her health and well-being, the manager at the SSOU said it would not have been appropriate to inquire into the private life of staff members, as that was confidential, stating that “it’s between her and any treating person, whether it be a doctor or a counsellor or a psychologist”.

    On this basis, Justice Dixon held that the State of Victoria breached its duty to Ms Kozarov by failing to take reasonable steps to prevent psychological injuries. Specifically these were that:

    • a reasonable person would have assessed it as foreseeable that Ms Kozarov was at risk of psychological injury, based on the conclusion that “suffering symptoms of psychiatric injury from the cumulative effects of vicarious trauma was not far-fetched or fanciful”
    • a reasonable employer would have enquired about Ms Kozarov's welfare and the impact of her work allocation
    • the workplace was lacking in preventative measures to safeguard staff wellbeing and should have had a system in place to monitor staff for signs that might indicate the need for intervention
    • appropriate screening would have revealed that Ms Kozarov needed to be rotated out of the SSOU to continue working at the OPP without suffering a psychological injury and that she would have accepted this rotation.

    The Court of Appeal upheld the Notice Finding but rejected the Rotation Finding.

    Ms Kozarov appealed to the High Court, seeking to overturn the Court of Appeal’s rejection of the Rotation Finding.

    The crux of the appeal focussed on whether the OPP should have required Ms Kozarov to rotate out of the particular OPP unit, and if so, whether Ms Kozarov would have accepted such a suggestion if put to her by the OPP.

    The OPP argued it could not have required Ms Kozarov to rotate out of the SSOU on the basis that her contract did not permit forcible redeployment. In any case, the OPP argued that Ms Kozarov would not have accepted any suggestion of redeployment, as evidenced by her application for a promotion in August 2011.

    In response, Ms Kozarov submitted the OPP’s argument must fail because, if successful, it would “completely usurp the common law obligation on an employer to enforce a safe system of work”.

    The High Court unanimously allowed Ms Kozarov’s appeal and set aside the orders of the Court of Appeal, reinstating the orders of Justice Dixon.

    The High Court decision

    Justices Gageler and Gleeson provided the leading judgment, and characterised the dispute as whether the OPP failed to take reasonable measures in response to evident signs of psychiatric injury, and whether the OPP’s failure caused an exacerbation of psychiatric injury.

    In considering the evident signs explored by the trial judge, Justices Gageler and Gleeson concluded that the trial judge’s characterisation of the signs amounted to more than merely ‘the inevitable and universal experience of vicarious trauma in the workplace of the SSOU'.They considered that Ms Kozarov’s co-operation in February 2012 in exploring alternative positions within the OPP was ‘relevant evidence’ and that Ms Kozarov's application for a promotion did not mean that she would not have accepted medical advice to rotate out of the SSOU (and therefore, upheld the Rotation Finding).

    Chief Justice Kiefel and Justice Keane agreed with the reasoning of Justices Gageler and Gleeson, but made some general observations on the duty of employers which bear repeating:

    • the content of the duty of care owed by an employer to an employee includes ‘active steps for the care of the psychiatric health’ of the employee and their fellow employees
    • the obligation of an employer to take reasonable care for the safety of employees at work must be determined with reference to the obligations which the parties owe each other under their contract of employment
    • there may be features of a particular job which mean that the work is ‘inherently and obviously dangerous to the psychiatric health of the employee’. In these circumstances, the employer has a duty to be ‘proactive’ and provide measures which enable the work to be performed safely by the employee
    • internal policies on health and safety may indicate that an employer has a ‘lively appreciation’ of the serious risk to the mental health of employees posed by the work.’ In these circumstances, the employer does not need any further warning signs to take reasonable steps to safeguard an employee’s mental health[1]
    • there is no general proposition that an employer must treat a demand made by a group of employees for a reduction in their collective workload as an indication the employer must make enquiries as to the mental health of the employees engaging in the kind of work they have been engaged to perform, and have agreed to perform[2]
    • instead, it is a matter of industrial relations whether a demand by employees for a reduction in their workload is reasonable. Regardless of whether the demand is made in ‘intemperate’ terms, it is not generally reasonable for the employer to understand this as an indication that the employees are suffering collective or individual impairments to their mental health.

    Some of the findings of Chief Justice Kiefel and Justice Keane will be interesting to examine once we have the new psychosocial regulations in place. Indications from safety regulators suggest that they will expect employers to treat excessive workloads as a psychosocial hazard in itself.

    Justices Gordon and Steward acknowledged the unchallenged finding of the trial judge that a safe system of work at the SSOU should have included:

    • an active OH&S framework
    • more intensive training for management and staff regarding the risks to staff posed by vicarious trauma and PTSD
    • welfare checks and the offer of referral for a work-related or occupational screening, in response to staff showing heightened risk
    • a flexible approach to work allocation, especially where required in response to screening, including the option of temporary or permanent rotation from the SSOU where appropriate.

    Takeaway lessons for employers

    We acknowledge that not every workplace is characterised by the unique context and triggers involved in the Kozarov case. However, that does not detract from an employer’s duty to assess and recognise psychosocial hazards in their workplace.

    In our view, some key takeaways employers ought take on board:

    • look out for the warning signs, such as changes in behaviour, unexpected absences and/or underperforming or overworking
    • employees who raise genuine concerns of being overworked want those concerns to be treated seriously by the employer, and addressed – such as employing more staff to share the workload or reallocating work (where possible) to ensure the load is spread evenly
    • employers must provide training to assist management to identify 'red flags' or training on how and when managers should respond to signs of concern, including by conducting welfare checks or referring an employee for optional work related screening (that identifies mental health risks or conditions)
    • recognise an employee’s commitment to their work, and let them know they are a valued member of the team – a little appreciation goes a long way
    • foster an environment where managers and leaders understand they must take a proactive approach to mental health at work, particularly in light of regulatory changes across Australia, and where employees are able, use an “open door” approach to raise any concerns about workloads, poor workplace culture or inadequate support
    • where an occupational screening (that identifies mental health risks or conditions) is required, there should be a system in place to respond to the outcome.

    How can we help?

    In light of this decision, and upcoming proposed changes to the employer’s duty in relation to psychosocial hazards, we suggest employers adopt a proactive, risk based and systems approach to psychosocial health.

    If you would like more information or require advice on any aspects of the above, please get in touch with a member of the Employment, Safety and People team.

    [1] Kozarov v State of Victoria [2020] VSC 78 at [7]
    [2] Kozarov v State of Victoria [2020] VSC 78 at [13]

    By Catherine Dunlop, Amber Davis, Lyndel David & Matthew D'Angelo

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