Elisha v Vision Australia - Can employees seek damages for psychological injury resulting from termination of their employment?

Last week, the High Court in its decision on Elisha v Vision Australia Ltd  [2024] HCA 50 made a landmark decision in employment law—allowing for an employee to seek damages where psychological injury results from termination of their employment.

The ruling overturns a precedent established more than 115 year ago, entitling Elisha to claim based on Vision Australia’s failure to adhere to its own workplace investigation and termination policies.

The events pertinent to the case begin at the front desk of a hotel, at which Elisha complains about noise in a nearby room and demands a new room. The hotel subsequently lodges an aggressive behaviour complaint with Vision Australia. Elisha is called to a meeting in which he denies the accusation of serious misconduct put to him. The employer prefers accounts from Elisha’s team members citing further instances of bad behaviour, and terminates him. Vision Australia does not enact the employment conditions entitling him to an investigatory process, assistance and appropriate disciplinary procedures. Elisha subsequently develops a major depressive disorder linked to the events of his termination.

Details matter. Conflict resolutions and investigations quickly show that a full account of the interplay of human behaviours, perceptions and patterns is often elusive. However even without a close examination of this case, it prompts some important lessons.

First, the obvious lessons:

Employers should review their employment contracts and ensure they reflect policies that are consistent with their requirements and preferred procedural response to performance management.

HR leaders need to know and apply closely their organisation’s policies in steering performance management processes.

In performance management evaluations, patterns of past behaviour must be recorded and not the subject of hearsay in informing decisions.

Now, the essential lessons:

Employers that embed a clear, workforce-wide understanding and practise of safe professional conduct will prevent more instances of harm, and provide a clear framework for evaluating reported incidents.

When conduct complaints arise (internally, externally, formally, informally), support and skill managers to address them early and constructively.

Where poor employee conduct patterns are identified, provide the employee with coaching and development and a clear expectation of safe conduct.

Most of all, managers, communicate:

When you want to check in with a staff member with a possible wellbeing or performance concern.

When you notice something’s a bit off with a member of your team, or others are affected negatively.

When complaints arise.

Communicate about how your team communicates. Communicate your concern, support, difficulties. Consult people around you, collaborate to come up with solutions. Don’t wait until you are discussing a misconduct complaint. And if you do, apply your policies accurately, and with support and compassion