On December 11, 2024, the High Court of Australia delivered a significant judgment in Elisha v Vision Australia Ltd [2024] HCA 50, addressing the availability of damages for psychiatric injury resulting from the manner of an employee’s dismissal.
Case Background:
Mr. Elisha, employed by Vision Australia since September 2006, was involved in a disputed incident at a hotel during work-related travel in March 2015. Following this, he was presented with a “stand down letter” and attended a disciplinary meeting where he denied the allegations. Despite his denial, Vision Australia terminated his employment on May 29, 2015, leading to his diagnosis of major depressive disorder. In August 2020, Mr. Elisha initiated legal proceedings seeking damages for his psychiatric injury.
Legal Proceedings:
Primary Judgment: The initial court found that Vision Australia breached its disciplinary procedures, which were part of Mr. Elisha’s employment contract, by not providing him with detailed allegations. The court awarded damages, recognizing that the risk of psychiatric illness was foreseeable. Court of Appeal: This decision was overturned on the grounds that damages for psychiatric injury are typically unavailable for breach of contract unless linked to physical injury or where the contract’s purpose is to provide enjoyment or relaxation. The court also deemed the psychiatric injury too remote from the breach.
High Court Decision:
The High Court allowed Mr. Elisha’s appeal, affirming that: The disciplinary procedure was indeed part of his employment contract. Psychiatric injury qualifies as a personal injury for which damages can be recovered in breach of contract cases. Such injury was a foreseeable consequence of the breach, making the damages not too remote.
Implications:
This landmark ruling underscores the importance for employers to adhere strictly to contractual disciplinary procedures. Failure to do so can result in liability for foreseeable injuries, including psychiatric harm, arising from breaches.
At Shawn Mendis Lawyers, we are dedicated to ensuring that both employers and employees understand their rights and obligations. Our expertise in employment law can help navigate such complexities, ensuring fair and lawful workplace practices.
For personalized legal advice tailored to your situation, don’t hesitate to get in touch with us to schedule a consultation.
