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Koehler v. Cerebos Australia Limited

Question :

Work stress may be referred to as a harmful emotional or physical response which may occur when the requirements of a job does not meet the capabilities, needs and resources of the worker. The problem of work stress is very common in the millenniums. The State of Western Australia have removed the claims of stress related disability from the legislation of worker's compensation. The case of Koehler v. Cerebos Australia Limited is a major decision on the negligence action of the employer and the cause of work stress.

  • Are employers duty bound to provide safe system of work to the employees ?
  • What impact does the case of Koehler v. Cerebos have on the duties of the employers ?
  • Can the employer foresee the risk of psychiatric illness to the employee in the case of Koehler v. Cerebos?
Answer :

The phenomenon of the work stress induced the psychiatric illness claims in the year 1990s and continued into young generations. The workload on the employee have resulted in stress induced psychiatric illness to the employee and brought the claim of negligence on the employer. This case have brought new phase in the negligence by the employer and how its breach of duty can give rise to negligent act.

Facts of the case

The appellant was working on full time basis as the sales representative. After retrenchment, she accepted the offer to work on part time basis for only three days a week. She repeatedly told the management on many different occasions regarding the work load as she was required to work additionally on fourth day to cover her work. The management did not take any action. She requested to reduce the number of stores so that she can avoid to work additionally on fourth day.

Subsequently, after a period of five months, the appellant developed the psychiatric illness and it was found that the reason for the illness was work. The employee took an action in the negligence based and that the employer have breached the duty to provide the safe system of the work as their was excessive workload.

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Issue raised

Whether the employer have breached the duty to provide safe system of work ?

Decision of lower court

The District Court of Western Australia, Commissioner Greaves found that the workload was excessive and the employer does not need any expertise to foresee that there was the risk of the injury to employee due to increase in the working hour. The court held that the employer failed to fulfil its duty and also failed to take reasonable steps in order to provide safe system of working to the appellant.

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Decision of Full court

An appeal was filed by the employer and the court held that an employer cannot foresee that the employee is exposed to the risk of injury due to excessive work and will suffer the psychiatric illness. The court allowed the appeal of employer and reversed the judgement of lower court and held that there is no evidence to suggest that the employer be alerted to the risk of psychiatric illness of the employee. Hence no breach of duty to take care was done by employer.

Issue raised in High Court

  • What is the nature of the reasonable foreseeability and the vulnerabilities of the employees in the workplace stress induced to illness of psychiatric?
  • What is the impact of employment contractual framework in determining duty to take care ?

Decision of High court

Aggrieved by the judgement of Full Court, the appellant (employee) appealed in High Court and the joint opinion delineate the scope of duty to take care of the employer. The Learned judges regarded an issue of duty to take care as the proper starting point instead of solely focusing on issue of standard of care.

The High Court held that a reasonable person, if put into the shoe of employer cannot foresee the illness of the employee so the claim of employee in relation to negligence is rejected. Moreover, the joint opinion of the Learned Judges of High Court determined that the complaint of employee does not suggest the danger to her psychiatric illness rather it is a problem of industrial relations. So there is no reason for employer to suspect the risk of psychiatric illness to employee.

The High court also held that the concept of foreseeability is -

  • based on the symptoms and signs of psychiatric illness.
  • Interpreted against contractual matrix favours the employer

Conclusion of the case

It can be said that the problem of workload and stress must involve different issues of the practice and policy which is unsuitable for the resolution in the individual case before courts like the legislation which imposes duty on employer to prevent negligence. The employment contract have an impact on the employer's duty to take care as it bounds the employer to provide safe system of work. Further, the medical knowledge which concerns with the connection between the psychiatric illness and work stress is still developing so it cannot be said that an employer can foresee the risk of illness of any employee.

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