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“Can Employers Still Say, ‘Toughen Up’?” – Landmark High Court Decision Shakes Up Workplace Law
Unfair dismissal cases are as Aussie as a snag on the barbie, but the High Court’s recent decision involving Adam Elisha might just have employers choking at the sausage sizzle. This groundbreaking case has swung the pendulum firmly towards recognising the psychological toll of workplace disputes, which should leave business owners rethinking “toughen up, mate” for good.
The Adam Elisha Case in a Nutshell
- Adam Elisha worked for Vision Australia (“VA”) but was dismissed by his employer under contentious circumstances involving a decision to commence disciplinary action against him while he was on leave, a prolonged workplace investigation, and a “show cause” process.
- After Elisha was terminated by VA, he commenced unfair dismissal proceedings against his former
employer with the case eventually being settled out of court. This is a common and prudent tactic used by employers when unfair dismissal claims are brought against them, because on a cost-benefit analysis, fighting it out in court sees the organisation get hung up in court for years and amass legal fees and stress along the way – sometimes it is better to bite your lip and give your ex (employee) a small win and importantly a swift and certain exit. - While this is how it usually works, and surely how VA thought it would play out, this was not the end of the fight, as Elisha then brought another case alleging that the drawn-out dismissal process caused him a recognised psychiatric injury rendering him unable to work for years to come.
- After five years of litigation, the case found its way to the High Court, where a decision was handed
down earlier this month allowing Elisha to claim damages for the mental health impact of the unfair
dismissal process to the tune of $1.4 million. - This decision sets a new precedent, recognising psychiatric injuries as compensable in unfair dismissal claims overturning the previous legal authority on the matter set out in the English case of Addis v Gramophone Company Ltd from 1909.
For the full scoop, check out the Sydney Morning Herald article. Sydney Morning Herald Article
The Key Takeaways from the Decision
- Employees can now claim damages for psychiatric injuries against their employers in certain
circumstances, which is a significant shift in Australian employment law. - Employers conducting workplace investigations, show cause events, and disciplinary procedures will face heightened scrutiny relating to the psychological and psychiatric impacts that these have on their employees.
- We anticipate that this landmark case will have a ripple effects that will likely influence the introduction of insurance and business policies, HR training, and workplace culture across Australia.
While some may cry that this case is the latest example of ‘PC gone mad’, laws tend to follow society’s whims like a hungry seagull on chips. For now, the current emphasis on mental health in Australia is reshaping employer obligations for good or ill.
Lessons for Employers Dealing with the New Reality
The classic Aussie mantra of ‘toughen up’ is on notice and employers will need to mental health being a
critical consideration when dealing with employees through the good times and the bad.
To protect themselves, in the new year, employers should look to develop and implement mental health
policies and strategies to address psychological risks when any kind of workplace dispute arises from
investigations to disciplinary actions to dismissals.
Even if the employer knows that such platitudes will be rejected or ignored by the ‘trouble employee’,
even something as simple as offering counselling or mental health support during a workplace dispute
could save the organisation a lot of headaches (and court dates) if the employee cries foul.
Employers should equip their leadership team and HR departments with the skills to manage sensitive
processes compassionately and legally.
Why This Case Matters
This decision is a game-changer because it recognises that employment relationships don’t end at “you’re fired” with the fallout potentially extending far beyond the termination notice. While it is yet to be seen though whether this heralds a brave new world of employee protections or if it will add more red tape to an already complex system, one thing is clear: regardless of how you feel about it, employers can no longer afford to ignore the mental health implications of their actions even if they see their employees as in dire need of a ‘cement pill’.
The challenge for employees now is to adapt swiftly to avoid being the next $1.4M cautionary tale. As for
employees, it’s a step towards recognition that toxic work environments and antiquated policies run by out-oftouch stuffed shirts are no longer acceptable.
Whether you are a business owner or an employee, if you’re grappling with how to navigate these landmark legal changes, our team of employment lawyers is here to help. Contact us today to help you seek justice or to future-proof your policies and keep your workplace running smoothly without the legal drama.
Author Steve Hodgson
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