Psychosocial Safety in the Workplace – 2024 in Review

It has been 12 months since the psychosocial risks and hazards regulatory framework was implemented in South Australia and other States and Territories.¹  The increased responsibility on employers to protect the psychological health of workers has coincided with evolving social values and higher expectations of corporate governance. Unfortunately, corporate culture has lagged behind community and legal expectations, with 2024 witnessing several high-profile corporate scandals that have placed psychosocial safety in the spotlight. 

Below, we explore the trends that have emerged over the past year.

Culture in Crisis: Workplace Investigations as a Response to Psychosocial Risks and Hazards

In 2024, workplace investigations have been increasingly used as an appropriate response to psychosocial risks and hazards in the workplace. Some notable examples include:

• Country Road: In May 2024, Woolworths Holdings engaged external law firm, Seyfarth Shaw, to investigate the internal handling of complaints made by employees of its subsidiary, Country Road, alleging bullying and sexual harassment on the part of senior executives, including the former Chief Supply Officer and former General Manager of Sourcing and Product Development. The investigation concluded in June 2024, leading to commitments to strengthen and enhance complaints handling processes going forward including “an end-to-end review of the complaint handling and reporting process; the launch of a refreshed sexual harassment training program to raise awareness and understanding of the complaint management process; and the commissioning of an independent review of sexual harassment and workplace misconduct policies and processes to ensure alignment with leading practice.” 
• Nine Entertainment: In May 2024, Nine Entertainment appointed independent workplace culture firm, Intersection, to investigate allegations of abuses of power, bullying, discrimination and harassment (including sexual harassment) among leadership in its newsrooms, including its former news and current affairs director. Following the release of Intersection’s report (which found that half of all employees had experienced or witnessed abuses of power and a similar proportion had been bullied, harassed or discriminated against), in October 2024 Nine confirmed that it had appointed independent law firm, Enterprise Investigations, to investigate complaints against specific employees. 
• ANZ: In July 2024, ANZ instructed external law firm, Allens, to investigate allegations of inappropriate conduct of traders in its Sydney dealing room, including excessive drinking during working hours and bullying.  Following a direction from the Australian Prudential Regulation Authority in August 2024  that ANZ “appoint an independent party to review the root causes of recent issues and risk governance in the Markets business, and assess the potential impacts across the broader bank,” in October 2024 ANZ appointed external consulting group, Oliver Wyman, to conduct a review of the trading team’s workplace culture.
• Merivale: In October 2024, Merivale appointed Barrister, Kate Eastman SC, to independently investigate allegations concerning exploitation of female employees at the Level 6 Penthouse (part of Merivale’s Ivy complex).
• WiseTech: In October 2024, WiseTech instructed external law firms, Seyfarth Shaw and Herbert Smith Freehills, to investigate (among other matters) allegations of bullying and intimidatory behaviour of its former CEO. Criticisms were subsequently made as to the robustness of the investigation (which cleared the former CEO of any wrongdoing) in circumstances where key witnesses had not been interviewed.

Workplace investigations and disciplinary processes remain under scrutiny, with the High Court of Australia having handed down its highly anticipated decision in Elisha v Vision Australia Ltd [2024] HCA 50 on 11 December 2024. 

The appeal principally concerned the availability of damages in contract for psychiatric injury (here, a major depressive disorder), where the employee’s injury arose from the manner of their dismissal.  At issue was whether Vision Australia’s 2015 Disciplinary Procedure, which required Vision Australia to provide Mr Elisha with a letter containing the allegations upon which Vision Australia ultimately acted in terminating his employment, formed part of Mr Elisha’s employment contract.  That procedure was not followed in the course of Mr Elisha’s dismissal. 

The appeal also considered an alternative claim for damages in tort, on the basis of Vision Australia’s alleged failure to provide a safe system of work that extended to the investigation and decision making with respect to discipline and termination of employment. 

The High Court allowed the appeal from the decision of the Court of Appeal of Victoria, holding that:

• Vision Australia’s 2015 Disciplinary Procedure was incorporated into 
  Mr Elisha's employment contract with contractual effect (at [46]-[47], [80], [109]), and that psychiatric injury was part of a class of physical or personal injury for which damages were recoverable for breach of a contractual duty concerning the manner of an employee’s dismissal (at [59], [80], [125]).
• Per the majority,²  Mr Elisha's loss was not too remote, because the kind of damage suffered (psychiatric injury) and the general manner of its occurrence was within the reasonable contemplation of the parties, at the time of the contract, as a serious possibility (at [68]-[70], [132]-[133], [137]). 
• Per the majority,³  As the ground of appeal on the basis of breach of contract had succeeded, it was unnecessary to consider whether Vision Australia owed Mr Elisha the duty of care in tort as alleged (at [74], [138]).

In obiter (at [74]-[78]) the majority⁴  observed that any determination of the existence and scope of a duty of care in tort to provide a safe system of work extending to the investigation of, and decision making with respect to, discipline and termination of employment, would require a consideration of the coherence of this potential duty with:

• Employment law legislation, such as the Fair Work Act 2009 (Cth).  In particular, the scope and availability of compensation for psychiatric injury, including in relation to the operation of provisions concerning adverse action (section 340).
• State workplace health and safety regimes, such as the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) and its equivalents in other jurisdictions.
• Administrative law, insofar as employment may be regulated by statutes other than the Fair Work Act.  
• An employer’s contractual power to dismiss an employee.

In a separate dissenting judgment, Stewart J found that an employer did not owe an employee any duty to take reasonable care in its implementation of the processes leading to, and resulting in, the termination of employment (at [93]).⁵   The reason why was the incoherence of this duty of care with the law of employment (at [96]).

In particular, the Fair Work Act governed unfair dismissal claims.  Compensation for such claims could not include a "component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person's dismissal" (section 392(4)). This reflected the common law position that shock, distress or humiliation resulting from the dismissal was not compensable (at [100]-[101]).  Here, Mr Elisha had pursued an action for unfair dismissal in 2015. That proceeding was settled shortly after it was commenced for the maximum amount payable under the Fair Work Act (being an amount equal to 26 weeks of pay) (at [103]).

Without any binding decision from the High Court on any duty of care in tort relating to implementation of the processes leading to, and resulting in, the termination of employment, its existence and scope remains an open question in 2025.

Empowering Executives: Fair Work and Human Rights Claims to Address Psychosocial Harm

In 2024, litigation emerged as a significant tool for senior executives who have suffered or witnessed psychosocial risks and hazards in the workplace. 

In particular, this year has seen a number of high-profile general protections dismissal claims brought by senior executives invoking section 340 of the Fair Work Act. ⁶  Among other matters, section 340 can be triggered where an employee is dismissed after making a complaint or inquiry to a regulatory body, or in relation to employment (being the exercise of a workplace right). The advantage of a general protections claim is the reverse onus of proof (meaning that the onus is on the employer to disprove the allegations) and uncapped damages.⁷

Key cases include: ⁸

• Super Retail Group: In July 2024, the former Chief Legal Officer and Company Secretary of Super Retail Group instituted a  claim in the Federal Court of Australia alleging that she was unfairly dismissed and discriminated against because of her exercise of her workplace rights. A similar claim was filed by the company’s former Co-Company Secretary in September 2024. The applicants have alleged that their dismissal came about after they raised a number of serious workplace allegations against senior executives including an undisclosed affair between the CEO and former head of HR, inappropriate company travel to further that relationship, and wider allegations of bullying and victimisation.  The trial of the first claim is currently part-heard before Justice Michael Lee, while the second claim (also before Justice Lee) has been adjourned until the determination of the first claim. In October 2024, ASIC commenced an investigation into Super Retail Group and the circumstances that led the applicants to sue the company.  
• Dentons: In July 2024, a former partner of law firm, Dentons, instituted a claim in the Federal Court of Australia alleging that he was forced to resign after making multiple complaints of bullying against another partner. Prior to the commencement of the legal proceedings, the majority of the applicant’s allegations had been substantiated in an internal investigation.  Notwithstanding, Dentons did not dismiss, suspend or demote the impugned partner, or require the partner to undertaking any anti-bullying training, or apologise. The trial of the claim has been listed before Justice Wheelahan in May 2025.
• Mineral Resources: In July 2024, a claim in the Federal Court of Australia by a former senior contracts manager at Mineral Resources, alleging that he was unfairly dismissed when he ‘blew the whistle’ on the CEO’s alleged improper conduct (including instructions to destroy evidence in a legal case), was settled after being on foot since May 2022.  Mineral Resources’ directors are now facing an investigation from ASIC into a tax evasion scheme established by the company’s departing founder and CEO.
• UniSuper: In August 2024, a claim in the Federal Court of Australia by a former investment manager of UniSuper, alleging that he was bullied and threatened by the Chief Investment Officer and then unfairly dismissed, was settled after being on foot since February 2023.

This year has seen senior executives resort to the human rights jurisdiction of the Courts to promote safe and respectful workplaces.⁹ These type of claims have arisen in the context of recent reforms under Respect at Work legislation, including:

• The Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Act 2022 (Cth), which imposes a positive duty on employers and persons conducting a business or undertaking to take reasonable and proportionate measures to eliminate, as far as possible, certain discriminatory conduct, including sex discrimination, sexual harassment, sex-based harassment and certain acts of victimisation in the workplace context.
• The Australian Human Rights Commission Amendment (Costs Protection) Act 2024 (Cth), which introduced equal access cost provisions in the Federal Circuit and Family Court and the Federal Court, to the effect that, except in very limited circumstances, a court (a) must order costs against the respondent where an applicant is successful in Federal anti-discrimination proceedings; and (b) must not order an applicant to pay a respondent’s costs in Federal anti-discrimination proceedings.¹⁰

A high profile example is the recent claim instituted by a former senior news reporter at Nine Network in November 2024, alleging sex discrimination in the workplace centring around the conduct of two male executives and inappropriate comments made in the newsroom. The applicant has also alleged that the network did not consider her mental health when assigning her stories to work on.

These type of claims are not limited to individual claimants.  On 11 December 2024, two separate class action proceedings were filed in the Federal Court against BHP Group and Rio Tinto Group, alleging systemic sexual harassment and gender discrimination against female employees.¹¹  Among other allegations, the proceedings alleged that BHP and Rio sent staff to remote sites knowing there was a high risk of personal danger, and then punished them with demotion, dismissal or discrimination when they reported it.

Looking Ahead

As we move into 2025, the focus on psychosocial safety and workplace culture will remain paramount. Employers must adapt to regulatory frameworks, prioritise employee well-being, and foster safe, respectful workplaces to meet societal and legal expectations. It can be anticipated that workplace investigations and legal disputes arising from poor workplace culture and unsafe work environments will continue to increase in the new year, as the legal landscape continues to evolve.

Footnotes: 

1. See https://www.lk.law/2024/06/double-edged-dynamics-psychosocial-risks-and-hazards-and-the-interplay-with-workplace-investigations/#_ftn5 
2. Gageler CJ, Gordon, Edelman, Gleeson Beech-Jones JJ (in a joint judgment) and Jagot J. Stewart  J dissented on this issue.
3. Gageler CJ, Gordon, Edelman, Gleeson Beech-Jones JJ (in a joint judgment) and Jagot J. Stewart  J dissented on this issue.
4. Gageler CJ, Gordon, Edelman, Gleeson Beech-Jones JJ (in a joint judgment).
5. Endorsing the decision in New South Wales v Paige (2002) 60 NSWLR 371.
6. The general protections dismissal jurisdiction is an avenue available to high income employees (earning over $175,000) who are not covered by an award or agreement who cannot invoke the unfair dismissal jurisdiction under section 385 of the Fair Work Act: https://www.fwc.gov.au/high-income-threshold 
7. In contrast to the unfair dismissal jurisdiction, where compensation is capped at the lower of these two amounts: half of the employee’s annual wage, or the current compensation cap of $87,500.
8. See also the general protections claim made by the former Category Manager at Myer in the Federal Court in 2023, alleging that she was unfairly dismissed when she made a bullying complaint about a fellow employee to Myer’s General Manager of People and Culture.
9. Discrimination claims can be brought in the Federal Circuit and Family Court or the Federal Court, on termination of a complaint by the Human Rights Commission: see section 46PO of the Australian Human Rights Commission Act 1986 (Cth).
10. See section 49PSA of the Australia Human Rights Commission Act 1986 (Cth). The Australian Human Rights Commission remains  a ‘no cost’ jurisdiction, meaning it has no power to award costs against an applicant or respondent for unlawful discrimination claims pursued in that forum.
11. The lead claimants are currently unnamed and the filings have not yet been made public by the Federal Court.