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Psych injury from surprise redundancy: employer liable

Worker’s abrupt termination was not reasonable.
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Psych injury from surprise redundancy: employer liable

Psych injury from surprise redundancy: employer liable

19 April 2021

By Gaby Grammeno

A commission has found that a worker’s abrupt termination was neither reasonable nor carried out in a reasonable manner. It triggered a major depressive illness and justified his claim for workers compensation. The man had been encouraged to believe his job was secure while he was away on long-term sick leave, so the sudden redundancy came as a shock.



Job made redundant - no warning

The worker had been employed for 15 years with a Queensland treatment provider for industries that require sterilisation and decontamination. Having begun as a plant operator, he was promoted in 2010 to the position of Irradiation Supervisor.

In 2017 and 2018, he required a significant period of time off, due to a medical condition unrelated to his work.

Shortly after his return to work, he was called to a meeting with management where he was advised that his position had been made redundant, effective immediately.

As a result, he suffered a major depressive disorder. It was not in dispute that the termination of his employment was the major significant contributing factor to his psychological injury.

However, his claim for workers comp was not successful, because WorkCover took the view that the termination of his employment was ‘reasonable management action taken in a reasonable way’, and therefore his condition was not compensable.

The worker applied to the Workers' Compensation Regulator to review that decision, but the Regulator confirmed WorkCover's rejection of his claim.

After this, he filed an appeal against the Regulator’s decision. The appeal was heard in the Queensland Industrial Relations Commission.


Termination was not reasonable management action

The commission heard evidence that the management of the company had formed a negative view of the man’s work performance because of comments made by other staff members. However, it appeared that the complaints had never been documented, and there was no clear evidence as to whether the worker had been given any feedback regarding the concerns about his work performance, or whether he’d been given an opportunity to respond.

Management had an obligation to consult the worker about the decision to make him redundant, because the relevant award (the Clerks Award) required the employer to discuss termination and restructuring decisions with affected employees.

Other reasons why prior consultation would have been appropriate were the worker’s length of service with the company, his position as a senior employee, the company's communication to him (while he was away due to illness) that he was a valued worker – implying his employment was continuing – and the man's efforts to resume more regular work attendance following his long-term sick leave.

Despite this, management did not consult him – he had no forewarning of his redundancy and said he felt ‘blindsided’ by it.

The worker contended that it was unreasonable of management not to consider redeploying him to an alternative position at the plant, as he had experience in performing the duties of two other positions to which he could have been allocated. However, the possibility of redeployment was not offered or discussed with him.

These considerations led the commissioner to find that the worker's termination was not reasonable management action.

Moreover, the way the termination decision was implemented – the conduct of the meeting – was not taken in a reasonable way. He’d had no inkling that his position was at risk of redundancy, he was such a long-term employee and he was not given an opportunity to have a support person at the meeting.

The commissioner therefore allowed the appeal, and set aside the decision of the Workers' Compensation Regulator.

The bottom line: Employers must take care to ensure procedural fairness in any decision to terminate an employee’s job or make their position redundant.


Read the judgment

Scott v Workers' Compensation Regulator [2021] QIRC 110 (31 March 2020)

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