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In the second blog of our two-part series on inappropriate conduct and behaviour, we continue our look at the consequences of failing to address poor conduct and behaviour in the workplace.

Safe Work Australia identifies that harmful behaviours including bullying, harassment, discrimination and workplace conflict or poor workplace relationships can cause psychosocial hazards. If left unaddressed, these harmful behaviours may cause psychological injury.  

In Nand v Toll Transport Pty Ltd [2022] NSWPIC 595, the employee was employed as a truck driver for Toll Transport Pty Ltd (the employer). The employee lodged a workers compensation claim alleging that he suffered a psychological injury. The employee alleged that during his employment, he:

• was ridiculed and humiliated for having concerns about COVID-19 and for wearing masks and gloves during the COVID-19 pandemic;
• was threatened by a co-worker who made a throat-slitting gesture toward him;
• was threatened with dismissal for speaking to the union;
• felt excluded by his co-workers who would make racists jokes about people of Indian ethnicity;
• was made to feel uncomfortable by his co-workers who would use profanity;
• was shown pornography by his co-workers, who would also make sexist and sexualised comments about women;
• was subject to homophobic remarks when he spoke up against the sexist comments made by his co-workers; and
• was assaulted by his supervisor.

The employee sought lump sum compensation for permanent impairment as a result of his psychological injury. Liability for the injury was declined by the insurer, relying on section 11A of the Workers Compensation Act 1987 (NSW) (WC Act). The insurer disputed that compensation was payable on the basis that the employee’s  psychological injury was wholly or predominantly caused by the reasonable action taken by the employer with respect to performance appraisal, discipline and/or dismissal.

While the NSW Personal Injury Commission (NSW PIC) accepted that the alleged assault was not supported by the evidence, it noted that case law accepted that an employee’s perception of real events in the workplace was sufficient for a finding of a work-related psychological injury. The evidence from the employer also supported the finding that the workplace was toxic and confrontational.

Accordingly, the NSW PIC found that the employee’s perception of the real events was the main contributing factor to the injury and as such he suffered a compensable injury. The NSW PIC also found that the insurer’s reliance on section 11A failed because the employee’s injury was multifactorial and therefore, performance appraisal or disciplinary process was not the sole or predominant cause of the employee’s injury.

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Lessons for employers

Harmful behaviour caused by poor and inappropriate conduct and behaviour can give rise to psychosocial hazards which can create psychological risks to workers.

Employers have safety obligations to eliminate or minimise such risks so far as reasonably practicable. A failure to manage such risks may lead to poor morale and mental health which may in turn result in a compensable psychological injury.

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.‍