It has been 12 months since the psychosocial risks and hazards regulatory framework was implemented in South Australia and other States and Territories.[1] The increased responsibility on employers to protect the psychological health of workers has coincided with evolving social values and higher expectations of corporate governance. Unfortunately, workplace culture has lagged behind community and legal expectations, with 2024 witnessing several high-profile corporate scandals that have placed psychosocial safety in the spotlight.
Below, we explore the trends that have emerged over the past year.
Culture in Crisis: Workplace Investigations as a Response to Psychosocial Risks and Hazards
In 2024, workplace investigations have been increasingly used as an appropriate response to psychosocial risks and hazards in the workplace. Some notable examples include:
In November 2024, the Australasian Association of Workplace Investigators launched Australian Guiding Principles for Conducting Workplace Investigations. Developed through extensive consultation with industry leaders and practitioners, these guidelines represent a collaborative effort to establish best practices across the sector. They are intended to assist both workplace investigators and those commissioning workplace investigations.
Workplace investigations and disciplinary processes remain under scrutiny, with the High Court of Australia handing down its highly anticipated decision in Elisha v Vision Australia Ltd [2024] HCA 50 on 11 December 2024.
The appeal principally concerned the availability of damages in contract for psychiatric injury (here, a major depressive disorder), where the employee’s injury arose from the manner of their dismissal. At issue was whether Vision Australia’s 2015 Disciplinary Procedure, which required Vision Australia to provide Mr Elisha with a letter containing the allegations upon which Vision Australia ultimately acted in terminating his employment, formed part of Mr Elisha’s employment contract. That procedure was not followed in the course of Mr Elisha’s dismissal.
The appeal also considered an alternative claim for damages in tort, on the basis of Vision Australia’s alleged failure to provide a safe system of work that extended to the investigation and decision making with respect to discipline and termination of employment.
The High Court allowed the appeal from the decision of the Court of Appeal of Victoria, holding that:
In obiter (at [74]-[78]) the majority[5] observed that any determination of the existence and scope of a duty of care in tort to provide a safe system of work extending to the investigation of, and decision making with respect to, discipline and termination of employment, would require a consideration of the coherence of this potential duty with:
In a separate dissenting judgment, Stewart J found that an employer did not owe an employee any duty to take reasonable care in its implementation of the processes leading to, and resulting in, the termination of employment (at [93]).[6] The reason why was the incoherence of this duty of care with the law of employment (at [96]).
In particular, the Fair Work Act governed unfair dismissal claims. Compensation for such claims could not include a “component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal” (section 392(4)). This reflected the common law position that shock, distress or humiliation resulting from the dismissal was not compensable (at [100]-[101]). Here, Mr Elisha had pursued an action for unfair dismissal in 2015. That proceeding was settled shortly after it was commenced for the maximum amount payable under the Fair Work Act (being an amount equal to 26 weeks of pay) (at [103]).
Without any binding decision from the High Court on any duty of care in tort relating to implementation of the processes leading to, and resulting in, the termination of employment, its existence and scope remains an open question in 2025.
Empowering Executives: Fair Work and Human Rights Claims to Address Psychosocial Harm
In 2024, litigation emerged as a significant tool for senior executives who have suffered or witnessed psychosocial risks and hazards in the workplace.
In particular, this year has seen a number of high-profile general protections dismissal claims brought by senior executives invoking section 340 of the Fair Work Act.[7] Among other matters, section 340 can be triggered where an employee is dismissed after making a complaint or inquiry to a regulatory body, or in relation to employment (being the exercise of a workplace right). The advantage of a general protections claim is the reverse onus of proof (meaning that the onus is on the employer to disprove the allegations) and uncapped damages.[8]
Key cases include:[9]
This year has seen senior executives resort to the human rights jurisdiction of the Courts to promote safe and respectful workplaces.[10] These type of claims have arisen in the context of recent reforms under Respect at Work legislation, including:
A high profile example is the recent claim instituted by a former senior news reporter at Nine Network in November 2024, alleging sex discrimination in the workplace centering around the conduct of two male executives and inappropriate comments made in the newsroom. The applicant has also alleged that the network did not consider her mental health when assigning her stories to work on.
These type of claims are not limited to individual claimants. On 11 December 2024, two separate class action proceedings were filed in the Federal Court against BHP Group and Rio Tinto Group, alleging systemic sexual harassment and gender discrimination against female employees.[12] Among other allegations, the proceedings alleged that BHP and Rio sent staff to remote sites knowing there was a high risk of personal danger, and then punished them with demotion, dismissal or discrimination when they reported it.
Looking Ahead
As we move into 2025, the focus on psychosocial safety and workplace culture will remain paramount. Employers must adapt to regulatory frameworks, prioritise employee well-being, and foster safe, respectful workplaces to meet societal and legal expectations. It can be anticipated that workplace investigations and legal disputes arising from poor workplace culture and unsafe work environments will continue to increase in the new year, as the legal landscape continues to evolve.
[1] See https://www.lk.law/2024/06/double-edged-dynamics-psychosocial-risks-and-hazards-and-the-interplay-with-workplace-investigations/#_ftn5
[2] APRA Media Release (23 August 2024): https://www.apra.gov.au/news-and-publications/apra-increases-anz%E2%80%99s-capital-add-on-to-750-million-over-non-financial-risk
[3] Gageler CJ, Gordon, Edelman, Gleeson Beech-Jones JJ (in a joint judgment) and Jagot J. Stewart J dissented on this issue.
[4] Gageler CJ, Gordon, Edelman, Gleeson Beech-Jones JJ (in a joint judgment) and Jagot J. Stewart J dissented on this issue.
[5] Gageler CJ, Gordon, Edelman, Gleeson Beech-Jones JJ (in a joint judgment).
[6] Endorsing the decision in New South Wales v Paige (2002) 60 NSWLR 371.
[7] The general protections dismissal jurisdiction is an avenue available to high income employees (earning over $175,000) who are not covered by an award or agreement who cannot invoke the unfair dismissal jurisdiction under section 385 of the Fair Work Act: https://www.fwc.gov.au/high-income-threshold.
[8] In contrast to the unfair dismissal jurisdiction, where compensation is capped at the lower of these two amounts: half of the employee’s annual wage, or the current compensation cap of $87,500.
[9] See also the general protections claim made by the former Category Manager at Myer in the Federal Court in 2023, alleging that she was unfairly dismissed when she made a bullying complaint about a fellow employee to Myer’s General Manager of People and Culture.
[10] Discrimination claims can be brought in the Federal Circuit and Family Court or the Federal Court, on termination of a complaint by the Human Rights Commission: see section 46PO of the Australian Human Rights Commission Act 1986 (Cth).
[11] See section 49PSA of the Australia Human Rights Commission Act 1986 (Cth). The Australian Human Rights Commission remains a ‘no cost’ jurisdiction, meaning it has no power to award costs against an applicant or respondent for unlawful discrimination claims pursued in that forum.
[12] The lead claimants are currently unnamed and the filings have not yet been made public by the Federal Court.
