In the case of Leggett v Hawkesbury Race Club, the Federal Court has ordered the Club to pay out $2.8 million to the employee who had her life “destroyed” after being subjected to “increasingly intense” bullying and intimidating behaviour by the CEO of the Club.
The employee, Vivienne Leggett was a longstanding senior employee who had worked at the Club for 25 years and had enjoyed a good working relationship with the Club’s former CEO. However, the employee’s psychiatric health was found to have “progressively eroded” by the actions of an incoming CEO, Greg Rudolf who was described by the Federal Court as having an “overbearing and controlling” micromanagement style.
Following an incident described as “the last straw”, where the CEO yelled at Ms. Leggett down the phone, Leggett emailed the CEO outlining her concerns and requesting that those concerns be relayed to the Board.
In response, the CEO ignored the contents of Ms. Leggett’s previous email and simply instructed her to meet with him to discuss her work performance and to “bring a support person if you wish”. Upon receipt of this email, the Court heard the employee “felt even more distressed, emotionally drained and began vomiting”. She subsequently obtained a medical certificate indicating she was unfit to work for the next week due to stress. Later that day, the CEO was found to be “gloating” when he forwarded the medical certificate to a third party with the comment “dropping like flies”. In another external email, the CEO said the employee “pulled the ‘stress leave’ certificate” to avoid meeting with him.
It was also found that the Director’s response to the grievance was also found lacking. It was found that the employee had raised concerns about the CEO’s behaviour and the significant impact it was having on her (including her inability to eat or sleep) on several occasions to the Board, however the Board characterised these interactions as the employee merely having “a conversational whinge”.
The Federal Court found that the Board had essentially “left everything to” the CEO to deal with the complaint, including delegating authority to him to “handle the negotiation of the approach by [Leggett] to resign”. The CEO also made a decision to withhold entitlements owed to the employee in order to use these as “bargaining chips” in the grievance.
The Federal Court found that the Club had breached its obligation to take all reasonable steps to provide the employee with a safe and healthy workplace and to take reasonable care to prevent Leggett being exposed to the risk of psychiatric injury at work. The Federal Court found that the CEO’s conduct caused the employee to develop “a very serious psychiatric illness that may never be cured or ameliorated to any significant degree”.
In a damning judgement, Justice Steven Rares found that Ms. Leggett “cannot work and… is permanently incapacitated from doing so” due to the CEO’s and the Board’s conduct. It was found that Mr Rudolph’s conduct caused Ms Leggett to develop a significant depressive disorder with anxiety that has left her unemployable for almost six years and found the workplace bullying ‘effectively destroyed Mrs Leggett’s life’.
This case highlights the importance of monitoring standards of behaviour in the workplace, having proper complaints procedures in place, and being conscious of risks to employees’ mental health. Further, this case also highlights the growing trend of courts to order significant compensation in bullying and harassment matters, and the potential implications for businesses when they get things wrong.
Two of the key mitigating defences an employer can use to avoid liability in cases of bullying and harassment is to:
- Have a clear and robust bullying and harassment policy in place, and
- Have general education for your staff on bullying and harassment in the workplace.
For information on developing appropriate policies and training your staff, in particular your senior staff and managers, in relation to bullying and harassment, please contact us at Effective Workplace Solutions.
Greg Arnold – Director & Principal Consultant
Disclaimer: This article provides a summary only of the subject matter without the assumption of a duty of care by Effective Workplace Solutions. No person should rely on the contents as a substitute for legal of other professional advice.