Summary
A recent Queensland District Court decision, Gairns v Pro Music Pty Ltd [2024] QDC 118, highlights the psychological health risks associated with handling sensitive employment matters. The case involved a long-term employee, Mr Gairns, who suffered a psychiatric injury after being abruptly demoted in a way the court found to be unreasonable. The judgment serves as a reminder that employers have a duty to take reasonable care to avoid causing psychiatric harm to employees, particularly in situations of workplace change.
The Meeting That Led to a Claim
Mr Gairns had been employed by Pro Music Pty Ltd as an internal sales supervisor, having worked with the company from 1997 to 2003 and then again from 2005 until the incident in February 2019. On 1 February 2019, just before the close of business, the managing director, Mr Corazzol, called Mr Gairns into an urgent meeting. He was informed that, as of the following Monday, he would be demoted and his salary would be reduced by approximately $5,000. The meeting lasted only 15 minutes, and when Mr Gairns questioned the legality of the decision, he alleged that Mr Corazzol raised his voice.
Importantly, Pro Music was aware that Mr Gairns had pre-existing psychological vulnerabilities, including anxiety and stress-related issues. In the weeks leading up to the meeting, he had been visibly distressed at work due to personal matters. Despite this, the meeting was held in an open-plan office, where two other employees overheard the discussion. Following the meeting, Mr Gairns did not return to work. Although he was encouraged by colleagues to do so, he ultimately resigned on 18 April 2019, stating that he was unable to continue working for the company.
Did Pro Music Owe a Duty of Care?
Pro Music denied liability, arguing that it did not owe a duty of care to Mr Gairns under the principles established in Paige and Govier. The company claimed that the meeting related to employment contract matters, which are outside the scope of negligence law. However, Rosengren DCJ rejected this argument, distinguishing the case from those authorities. Her Honour found that:
– The meeting was not about the exercise of a workplace right or an investigation into work performance.
– There was no contractual basis for Mr Corazzol’s conduct.
– The meeting was part of Pro Music’s fundamental management functions, meaning the company owed a duty of care to conduct it in a reasonable manner.
Her Honour concluded that the risk of psychiatric injury was foreseeable and “not insignificant.” Several factors supported this finding, including Mr Gairns’ long tenure, the lack of prior warning about performance issues, and the fact that the meeting was held in an open setting without confidentiality. Significantly, the court held that even if Pro Music had not been aware of Mr Gairns’ psychological vulnerability, the manner in which the meeting was conducted was sufficiently unreasonable to create a foreseeable risk of psychiatric harm to any employee.
Case Summary: Gairns v Pro Music and Workplace Psychiatric Risks
The court awarded a total of $301,197.00 to the Plaintiff, clear of the WorkCover refund.
Key Takeaways
This case reinforces that employers have a duty of care when handling employment changes. While businesses have the right to make decisions about restructuring, demotions, or pay cuts, they must do so in a manner that considers the psychological impact on employees. The matter also reinforces the issue of foreseeability. Pro Music knew Mr Gairns had psychological vulnerabilities, but even without that knowledge, the court found that the manner of the meeting created a foreseeable risk of harm. Additionally, holding a sensitive meeting in an open-plan office was a factor in the court’s decision. Employers should ensure that difficult conversations are conducted in private.
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