Koehler V Cerebos (Australia) Ltd: Case Brief And Analysis

Discuss about the Koehler v Cerebos (Aust) Ltd.

In an employment contract, certain terms are fixed between the employer and an employee (Freedland, 2016). But even beyond these terms, there are certain duties of both the employer and employee towards each other. One of such duties of an employer is the duty of care. An employer’s duty of care towards their staff contains that they have to take required steps which adequately make certain the healthiness, wellbeing and safety of an employee (CCH Australia Limited, 2010). Demonstration of concern for the physical and mental health of the employees is not a legal duty of any employer. Though, it is considered as a key factor which helps in building trust. It also reinforces the commitment of the employees can helps in boosting productivity. Legally, all the relevant health and safety laws along with the employment laws are to be followed in addition to the common law duty of care. The case of Koehler v Cerebos (Australia) Ltd [2005] HCA 15 222 CLR 44; 79 ALJR 845; 214 ALR 355 deals with this very common law of duty of care of an employer towards its employee.

The incidents of work stress stimulated psychiatric illness claims have been prevalent since 1990s. The removal of workers’ compensation legislation in State of Western Australia has assisted common law claims for work stress stimulated psychiatric illnesses. On April 6, 2005, a key verdict on employee’s negligence action was given in the case of Koehler v Cerebos (Australia) Ltd (Butler, 2006). In this case, the plaintiff was a worker of the Defendant. The Plaintiff believed that she was majorly overworked and did some formal complaints to the Defendant. Though, these complaints never mentioned that she was in distress. Later on, the Plaintiff developed psychiatric illness because of her job and sued for negligence.

In the following segments, the arguments as a Defendant of the case have been presented.

The Plaintiff has brought proceedings in the District Court of Western Australia on the claims that the Defendant used to unreasonably overload her with work negligently. This made her strained so much that she suffered major depressive damage which disabled her from functioning. It has further been brought forward by the Plaintiff that the Defendant knew or should have known about the risks of psychological damage to the Plaintiff as a reason of her constant pleadings for reprieve, help and a decrease in her load of work.

Summary of the Case

The Plaintiff has referred to a case of breach of contract and a breach of Section 19(1) of the Occupational Safety and Health Act 1984 which contain the duties of employers (Australasian Legal Information Institute, 2005). It was the duty of the Defendant being an employer, to provide and maintain safe system of work and to provide such information, guidance and command to the employees that are essential to facilitate them to execute their job in a way which does not expose them to hazards.

The Plaintiff was completely wrong in saying that the duties as an employer were not fulfilled by the Defendant. The Defendant maintains proper workplace and maintains such workplace which does not expose the employers to any hazards. Further, the defendant has provided with necessary instructions and supervision which is essential to facilitate the employees to execute their job in a way which does not result in exposure to hazards. Further it was not required by the Defendant to hire any particular expertise to anticipate that the worker would experience a threat of damage in the circumstances (Jade, 2004). There was no evidence provided by the Plaintiff to the Defendant which would have alerted the Defendant about the risk of psychiatric injury to the Plaintiff.

The plaintiff had made some formal complaints about the excessive workload to the Defendant. The complaints did not in any way, state that she was in distress. The complaints only said that she was not able to complete her job to her contentment as a reason of the high load of work. It is worth noting that the Defendant could not have predicted that the employee would get a psychiatric illness because of the load of work. The Defendant has provided witnesses who clearly show that the Plaintiff’s duties did not exceed the reasonable levels. They have further proved that the excessive workload has not caused her disability.

There was a lack of exterior signs of suffering or probable damage. The Defendant was not in the position where he could have predicted that the Plaintiff would have been exposed to some threat of damage because of performing her obligations as a part time merchandiser. The complaints did not warrant any measures which had to be taken to thwart the growth of a psychiatric illness.

The Plaintiff did not showcase any changes in the demeanor, behavior or the personality regarding the actual symptoms or illness upon her. Without any such information or change in the behavior, the Defendant could not foresee that the Plaintiff was suffering from an illness. Lastly, because of the lack of any proof regarding the psychiatric weakness, there was no ground for finding a foreseeable risk of a psychiatric injury.

Conclusion

The Defendant would like to refer to the case of Hatton v Sutherland [2002] (Swarb, 2015). In this case, certain principles were stated by her Ladyship (Hale LJ) to establish for a claim to succeed against an employer (Chan, 2005). Referring to such principle, the Defendant assumed that the Plaintiff could cope up with the usual stress of the job. Further, the Defendant has no knowledge about the circumstances that initiated the claim. Lastly, the claim was neither foreseeable nor was resulted due to a breach of employer’s duty.

The Defendant would also like to draw notice to the case of Barber v Somerset County Council, where it was clearly established that the work expected from the teacher as per demand placed upon him was not justified. The employer should have checked on the teacher during his sick absence. He should have provided the teacher with adequate support. Since, this was not done, the employer was held responsible for a breach of duty to care (Swarb, 2016). But in this case the Defendant never knew about the illness of the Plaintiff. Nor could they have known about such illness in any case. So, the claims of the Plaintiff should be set aside.

Ms Koehler was firstly awarded $856,742 by the Commissioner who evaluated the damages and gave judgment in favor of the Plaintiff. After this, the employer fruitfully appealed the verdict. This was consequently appealed by in the High Court. The employer was not held responsible by the High Court. The Court held that there was enough proof that Ms Koehler's duties were excessive by industry standards. But, the Court acknowledged that the said duties were within the limits placed in the relevant legislative guideline. 

The Court also held that it was logical for employer to believe that Ms Koehler's complaint of load of work was the result of an industrial relations dispute due to the cutback in her days of work from 5 to 3. Ms Koehler had never mentioned about psychiatric illness. Also, Ms Koehler's situation was not noticeably evident in form of absence from work or distress. The High Court concluded that the employer could not have predicted the threat of psychiatric injury. 

Conclusion 

As per the verdict given by the Commissioner, as a Defendant, the employer had to pay up the sum of $856,742. But, on further appeal in the High Court the Defendant was proved right. It was clearly established in the Court that even though the employee was over worked as per the standards of the industry. But as per the legislations and the rules, in the matter of employment, the employee was not over worked. The work that was being done by the employer was within the limits stated in different laws.

The High Court was also content that there was no case of a failure in the duty of care by the employer. The employee was not bound to undertake the services of any particular expert who could have foreseen any risk of injury. This was because there was no evidence or proof of any mental injury amongst any of the employees, especially Ms. Koehler. She had not shown any external signs of mental injury nor was there an absence on her part from work by the reasons of illness. There was no evidence which would have alerted the employer about the threat of psychiatric injury to Ms. Koehler (Hor, 2005).

The case of Koehler v Cerebos is a landmark decision in context of stress stimulated psychiatric illness in the place of work. The decision of High Court in this case has established that for foreseeing any psychiatric risk, there has to be presence of signs and symptoms in the particular employee which is adequately visible to the employer (Teff, 2008). This case acts as a savior for the employers in related circumstances. This verdict has been welcomed and applauded by the Australian Chamber of Commerce and Industry. The Chamber has warm heatedly accepted the decision of High Court about foreseeability of illness. This case shows that the employee has to communicate the problems rather than assuming that the employer knows everything and then holding them accountable for a breach of duty.

References 

Australasian Legal Information Institute (2005) High Court of Australia: Koehler v Cerebos (Australia) Ltd [2005] HCA 15; (2005) 222 CLR 44; (2005) 214 ALR 355; (2005) 79 ALJR 845 (6 April 2005). [Online] Australasian Legal Information Institute. Available from:  [Accessed on 08/09/16]

Australasian Legal Information Institute (2005) High Court of Australia: Koehler v Cerebos (Australia) Ltd [2005] HCA 15; (2005) 222 CLR 44; (2005) 214 ALR 355; (2005) 79 ALJR 845 (6 April 2005). [Online] Australasian Legal Information Institute. Available from: https://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/2005/15.html?stem=0&synonyms=0&query=koehler#fn20 [Accessed on 08/09/16]

Butler, D.A. (2006) Psychiatric injury in the workplace: Directions for cases involving stress or bullying. Torts Law Journal, 14(2), pp 124-134.

CCH Australia Limited (2010) Australian Master Fair Work Guide. 1st ed. NSW: CCH Australia Limited.

Chan, G. (2005) Koehler v Cerebos (Australia Ltd): Work Stress and Negligently Inflicted Psychiatric Illnesses. University of New South Wales Law Journal 47, 28(3)

Freedland, M. (ed) (2016) The Contract of Employment. 1st ed. New York: Oxford university Press.

Hor, R. (2005) Torts Special Issue: Case and Comment: Case Notes: Psychiatric Injury in the Workplace: The Implications of Koehler v Cerebos. The Sydney Law Review, 557.

Jade (2004) Koehler v Cerebos (Australia) Ltd [2004] HCATrans 412. [Online] Jade. Available from: https://jade.io/article/234380 [Accessed on 08/09/16]

Lovric, K., and Hawthorne, E. (2016) Psychiatric Illness Claim. [Online] FindLaw Australia. Available from: https://www.findlaw.com.au/articles/716/psychiatric-illness-claim.aspx [Accessed on 08/09/16]

Swarb (2015) Sutherland v Hatton; Barber V Somerset County Council and Similar; CA 5 Feb 2002. [Online] Swarb. Available from: https://swarb.co.uk/sutherland-v-hatton-barber-v-somerset-county-council-and-similar-ca-5-feb-2002-3/ [Accessed on 08/09/16]

Swarb (2016) Barber v Somerset County Council; HL 1 APR 2004. [Online] Swarb. Available from: https://swarb.co.uk/sutherland-v-hatton-barber-v-somerset-county-council-and-similar-ca-5-feb-2002-3/ [Accessed on 08/09/16]

Teff, H. (2008) Causing Psychiatric and Emotional Harm: Reshaping the Boundaries of Legal Liability. Portland: Hart Publishing, pp 163-164