In Habermann v Cook Shire Council,[1] Justice Henry of the Supreme Court of Queensland found that an employer’s duty of care to its employees extends to the conduct of third parties where that conduct poses a foreseeable risk of psychiatric injury to an employee. This includes the publication of defamatory statements about the employee.
In this Insight, we explore the court’s reasoning, and the steps that need to be taken by employers to discharge this duty.
The Facts
The plaintiff was employed by Cook Shire Council (Council) as a senior Council officer. An email that had been fabricated by a third party purporting to be from the plaintiff, falsely portrayed her as a racist towards Indigenous people, and was later tabled in Parliament. This occurred notwithstanding that the Council:
- was forewarned of the email’s existence;
- was capable of disproving the email’s authenticity by auditing its internal email systems; and
- promised the plaintiff that it would “look into” the authenticity of the email, which it did not do.
The email caused significant damage to the plaintiff’s reputation, particularly amongst the local Indigenous community.
The plaintiff also suffered significant psychiatric injuries and was unable to return to work.
The Duty of Care
The key question was whether the duty of care owed by the Council to the plaintiff extended to guarding against the actions of third parties.
The Council argued that the duty of care was precluded from being imposed on it in such a situation. The Council submitted that even if there were reasonable protective measures that could have been taken to mitigate the risk, they had no duty to act as they could not control the conduct of the relevant third parties.
His Honour firmly disagreed, finding that the Council had in fact breached its duty to take reasonable care to prevent the risk of foreseeable psychiatric injury to the plaintiff. Justice Henry exclaimed:
“Where an employer holds the power to take reasonable protective steps to avoid the foreseeable risk of injury posed by third parties to its employees, in their capacity as its employees, then the employer’s duty of care to its employees requires it to take such steps. What if any protective steps are reasonable to take will inevitably depend upon the individual circumstances of the case, including how onerous the steps may be relative to the magnitude of the risk and the apparent probability of the steps influencing the third party’s conduct.”
The facts of this case were likened to a road worker at a road works site who may be put at foreseeable risk of physical harm by a third party such as an inattentive driver, or a bank teller who may be put at foreseeable risk of psychiatric harm by a third party such as a bank robber. In these cases, “the employer has no legal power of control over the third party but that does not mean the employer is unable to take steps to mitigate against the risk of the third party harming its employee.”
His Honour concluded that the Council knew, or ought reasonably to have known, that if the fabricated email was perpetuated in the public domain, it would have had “extreme consequences” for an employee in the plaintiff’s position. The Council’s breach of its duty of care was found to have caused the plaintiff’s psychiatric injury, and the plaintiff was awarded damages of in excess of $2.3 million.
The Key Takeaways
This decision reinforces that an employer’s duty of care to employees extends beyond the risk of physical harm and includes the risk of psychiatric and reputational harm where that risk is foreseeable.
The decision also clarifies that there is no blanket defence for harm arising from third-party conduct. Once an employer is alerted to a foreseeable risk of harm to an employee, they must take reasonable steps to mitigate the risk, even if that flows from the conduct of a third party.
Finally, the Council’s failure to properly investigate the source of the fabricated email and properly communicate with the plaintiff about its investigation were key to the Court’s finding that the Council had breached its duty of care. It is therefore crucial that workplace investigations are carried out in an appropriate manner and by sufficiently qualified individuals, and that findings of such investigations are communicated clearly and promptly to all stakeholders.
[1] [2025] QSC 214.