A plain-English guide to the principles Australian courts apply when an employee claims psychiatric injury caused by work.
The duty is owed to each employee
Employers owe a non-delegable duty to take reasonable care to avoid exposing employees to unnecessary risks of injury. That duty covers psychological as well as physical harm, and it requires employers to devise a safe method of operation and adequate safeguards — including for the ordinary thoughtlessness, inadvertence and carelessness of people at work.
But the duty is owed to each employee individually, not to a workforce in the abstract. As the High Court put it in Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44, while it is general knowledge that some psychiatric illnesses can be triggered by stress, it is “a further and much larger step” to say that all employers must recognise that all employees are at risk of psychiatric injury from stress at work. The duty is engaged only where psychiatric injury to the particular employee is reasonably foreseeable.
Why these claims are difficult
Workplace psychological injuries are almost always multifactorial, and frequently develop without the employer having any actual awareness of what the worker is experiencing. Mere stress or distress is not enough: the worker must suffer a recognised psychiatric illness. Foreseeability that the illness will develop, ie a reasonable employer would anticipate that the illness could occur, must attach to that illness, not merely to physical harm.
Complaints are also not automatically warnings or red flags for an employer. In Koehler, an employee who made many complaints about workload and hours did not succeed in establishing negligence because none of the complaints suggested that her work was putting her health at risk; they were capable of being understood as an industrial relations problem. Employers are entitled to assume, absent evident signs warning of the possibility of psychiatric injury, that an employee is able to do the job.
Nor is the law of tort a general guarantee of a stress-free workplace. In Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 471, Spigelman CJ observed that some tension is endemic to any hierarchy, and that “[t]here is no breach of duty unless a situation can be seen to arise which requires intervention on a test of reasonableness.”
What Kozarov changed
The “evident signs” language in Koehler is not a precondition to liability in every case. In Kozarov v Victoria [2022] HCA 12, the High Court rejected that approach as a misunderstanding of Koehler. The employer’s entitlement to assume an employee can do the job does not displace its overriding obligation to maintain a safe system of work and to guard against foreseeable psychiatric injury.
Where the work itself puts the employer on notice of the risk — as with a prosecutor exposed to vicarious trauma in a specialist sexual offences unit — the employee need not show that the employer failed to respond to visible signs of distress. A further point from Kozarov matters in practice: a safe system of work must be implemented and enforced, not merely committed to writing in a manual and then ignored.
Causation is where claims usually fail
An employee alleging negligence must identify precisely which breaches caused the psychiatric injury. Where the harm is cumulative, and some alleged events are not proved, or are proved but do not amount to a breach, the claimant must establish what injury — or what part of the injury — would have been suffered in any event. Otherwise the claim fails.
Vulnerability and scope arguments remain live. Employers can be directly liable for failing to have, or enforce, adequate systems where they knew or ought to have known of the risk arising from the work, their systems, or interpersonal behaviour (Hayes v State of Queensland 2016 QCA 191). The standard is not lowered because the harm is mental rather than physical (State of New South Wales v Briggs (2016) 95 NSWLR 467).
A cautionary recent example
In Secretary, Department of Communities and Justice v Soulos 2026 NSWCA 185, a child protection caseworker was encouraged to watch an employer-endorsed SBS documentary. A two-minute segment discussed a deceased teenage client; neither he nor she was named, but she recognised him and believed a review panel was blaming her. She suffered a psychiatric injury and was awarded $1,389,457.74.
The employer conceded injury, causation and duty, contesting only whether the risk was foreseeable and within scope. That concession proved decisive: because it accepted that psychiatric injury was foreseeable if the employee could foreseeably identify the client and perceive herself as blamed. The Court of Appeal did not disturb the award, described by Ward P as “extraordinary” yet compelled by “the undemanding test of reasonable foreseeability”. The case is a reminder that foreseeability is a low bar and that scope-of-duty and breach arguments usually carry the weight of a defence — and that an employer’s own encouragement to engage with distressing material can supply the very risk later relied on.
This article is general information only and is not legal advice. Liability depends on the particular facts, the applicable statutory scheme and time limits that may apply. Anyone considering a claim should obtain advice about their own circumstances.
