By Stuart Eustice, Partner and Holly White, Lawyer
Ms Lloyd worked as a receptionist and patient services provider for Healthscope Operations Pty Ltd (employer) between 1982 and 2012 at a private mental health service. She claimed that in 2012, she was bullied by the employer’s finance manager causing psychiatric injury. The conduct in question arose from the handling of a complaint made by a patient about Ms Lloyd. Ms Lloyd commenced proceedings against her employer in negligence claiming damages for personal injury.
She claimed her employer had failed to take reasonable steps during the investigation and determination of the complaint to protect her from the foreseeable risk of psychiatric injury. The case at first instance failed with the trial judge finding at the relevant time alleged, the risk of psychiatric injury was not foreseeable, any duty of care owed was not breached and the alleged damage was too remote.
Ms Lloyd also pleaded a cause of action for breach of contract based on the contention the employer’s disciplinary procedure policy formed part of her employment agreement. This argument was also rejected.
The Supreme Court of Victoria Court of Appeal agreed. The Court of Appeal refused Ms Lloyd’s application, finding there were no real prospects of success. Further The Court agreed with the trial judge’s findings that:
- the evidence did not support a positive finding of fact that the conduct complained of amounted to bullying.
- the employer’s duty of care to provide a safe system of work did not encompass the provision of a safe system of investigation and decision making in respect of procedures for disciplining employees as contended by Ms Lloyd.
- the duty of care to avoid causing psychiatric injury between January and June 2012, was not owed. A duty of care in respect of the risk that Ms Lloyd might suffer psychiatric injury was not engaged until such a risk became reasonably foreseeable, which was 18 June 2012 when Ms Lloyd raised her concern with her direct supervisor. Ms Lloyd unsuccessfully argued her employer was alerted to the risk in March 2012 when she became upset during a meeting when she was questioned about sick leave and had to explain she had attended a young person’s funeral. The Court of Appeal held this upset was a normal human reaction and therefore insufficient to alert her employer to a risk of psychiatric injury.
- in any event, no breach had occurred and furthermore the damage claimed and/or suffered by Ms Lloyd was too remote.
- the disciplinary procedures document was not contractual.
Notwithstanding the outcome, the trial judge was critical of the employer and the finance manager, finding it had allowed the management of Ms Lloyd to be conducted poorly, including denials of procedural fairness and that, in an industrial relations setting, the finance manager’s procedure was deficient and unlawful. However, the Court of Appeal recognised that there can be personality conflicts and disagreements which occur in workplaces, stating that ‘[p]eople can be wrong and communications between people in authority and fellow employees may sometimes be wrongheaded or unfair — without the conduct sought to be impugned amounting to bullying or giving rise to an actionable wrong of the kind pleaded by [Ms Lloyd] in this case.’
Whilst fact specific and not creating any new law, we encourage you to read the full reasons given their applicability to most everyday employment situations. You can find the full reasons here – https://aucc.sirsidynix.net.au/Judgments/VSCA/2021/A0327.pdf
 Lloyd v Healthscope Operations Pty Ltd  VCC 2032 (Judge P Ginnane).
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