Employer liable for intentional harm by employee – Ward v Allianz Australia Insurance Services  NSWDC 29329 August 2019 Topics: Compulsory Third Party (CTP), Insurance, Workers’ compensation
In this New South Wales District Court decision, an employer was found liable for the deliberate actions of a manager who verbally and physically bullied the plaintiff over a period of 14 months.
The 52 year old male plaintiff, Mr Ward had worked his way up the ranks, becoming an accounts manager for Allianz in 2003. Mr Smith, State Manager at the time, took an aggressive approach to management of staff, which included often yelling at Mr Ward as well as physical contact, by slapping him across the back of his head and ‘shoulder charging’ him as he walked past.
In January 2004, another employee complained about Mr Smith’s behaviour. At this time, Mr Ward was interviewed and also reported Mr Smith’s aggressiveness towards him. As a result, Mr Smith was transferred and later left Allianz’s employ. Much later, in August 2010, Mr Ward began to ‘struggle’ with his work. He went on leave in December 2010, never to return to his position. He did not seek psychological treatment before this time.
Mr Ward claimed common law damages under the Workers Compensation Act 1987 (NSW) for a range of psychiatric conditions, including PTSD and depression, which he claimed were caused by bullying and harassment he experienced at the hands of Mr Smith. Allianz did not contest the evidence as to Mr Smith’s behaviour towards Mr Ward, and conceded that Mr Ward’s condition ‘to some extent’ was caused by Mr Smith’s conduct, but did not adduce any expert medical evidence.
After reviewing the pleadings and facts, the Court considered whether the bullying gave rise to any liability for injuries arising from it and, if so, whether Allianz was vicariously liable for Mr Smith’s behaviour in the context of deliberate conduct by an employee.
The claim for intentional harm required Mr Ward to prove on the balance of probabilities that Mr Smith’s intentional conduct was ‘calculated’ to cause harm (including psychological injury). The Court was satisfied that it was an expected and likely consequence of Mr Smith’s conduct that some form of psychiatric condition, such as that suffered by Mr Ward, would arise and Mr Smith was ‘recklessly indifferent’ to this consequence. It was further held that the physical abuse by Mr Smith was done in the apparent execution of the authority vested in him by Allianz as State Manager and, therefore, Allianz was liable to Mr Ward for Mr Smith’s deliberate deeds.
Given its finding with respect to intentional harm, the Court did not believe it was strictly necessary to address the claim for negligence, however, for completeness, held that Allianz had a system in place to deal with bullying and enforced that system by removing Mr Smith after the complaint about his behaviour was received. There was no indication at the time of Mr Smith’s removal that Mr Ward was suffering from any psychiatric effects of the bullying behaviour and accordingly, it found that the claim in negligence against Allianz failed.
Judgement was entered for Mr Ward in the sum of $1,394,421.91 plus interest and costs.
This case highlights the extent of an employer’s duty of care to an employee, which includes the protection from the deliberate conduct, as well as negligent conduct, of co-workers undertaken broadly within the scope of the co-worker’s position.
It also highlights that offending conduct can have significant consequences for a worker well after the conduct ceases, leaving an employer potentially exposed for many years.