A tech worker has been awarded more than $1.4 million in a major High Court ruling that found he suffered psychiatric injury from a “sham” dismissal process.
The High Court last week handed down a ruling that employers can be liable for damages for the psychiatric impact of a worker’s employment ending if this process was unfair and in breach of employment contracts.
It upheld a previous decision of the Supreme Court of Victoria to award the tech worker $1.44 million in damages for psychiatric injuries experienced as a result of being fired in a way that breached his contract.
The case involved Adam Elisha, an adaptive tech consultant at Vision Australia, who set up software and hardware systems for vision-impaired individuals.
Elisha had been employed in this role since 2006.
In March 2015 while travelling for work, Elisha was involved in an “incident” at a hotel.
What happened during this incident has been disputed, with Elisha denying claims by the hotel proprietor that he had been aggressive and intimidating when making a complaint about noise.
This incident was reported to Elisha’s manager at work, who said she was unsurprised about the hotel proprietor’s allegations due to previous alleged reports of aggressive behaviour by the employee.
Elisha was told there was a “serious complaint” against him.
He was given a “stand down letter” and required to attend a meeting two days later.
This letter only detailed the allegations about the hotel incident, which he denied.
‘Sham and a disgrace’
The Supreme Court judge found that Elisha’s manager had “already decided to accept” the hotel proprietor’s version of events before this meeting, and that this was informed by the previous allegations, which Elisha had not been given a chance to respond to.
Elisha was fired from Vision Australia at the end of May 2015.
The judge found this dismissal process was “unfair, unjust and wholly unreasonable”, “nothing short of a sham and a disgrace”, and in breach of Elisha’s contract.
It found that the tech worker was “not given any notice of, or opportunity to respond to, the allegation of a history of aggression and excuse-making, and was not told of the role of that allegation in the decision to terminate his employment”.
Following his firing, Elisha was diagnosed with a major depressive disorder, the court heard and had “no capacity for work in the foreseeable future”.
“The unfathomable nature of what had occurred contributed very significantly to the disturbance of [the worker’s] mind and, consequently, the chronic psychiatric illness of which various medical witnesses gave evidence,” the judge said in the ruling.
Elisha said that the impact of his dismissal had been “catastrophic” and that “there’s been not one single aspect of [his] life that hasn’t been either destroyed or obliterated”.
In June 2015 Elisha commenced unfair dismissal proceedings against Vision Australia at the Fair Work Commission, and was awarded $27,000, the maximum amount he was entitled to.
The Supreme Court action was launched in August 2020, with the court eventually ruling in favour of Elisha and ordering Vision Australia to pay him $1.44 million in damages.
High Court challenge
Vision Australia challenged the decision at the Court of Appeal, which upheld the appeal and found that damages for psychiatric injury are not available for the breach of contract.
This was then taken all the way to the High Court, which was asked to decide whether employers can be liable for psychiatric injury as a result of a breach of contract or unfair dismissal.
In its ruling last week, the majority of High Court Justices ruled that “subject to the particular terms and context of any particular contract, liability for psychiatric injury is not beyond the scope of a contractual duty concerned with the manner of dismissal”.
The High Court found that employees can be compensated for psychiatric injuries that result from breaches of contractual disciplinary procedures.