OHS Provision Legally Enforceable

14/8/2007
Source: OHS Alert

A Full Federal Court has confirmed that OHS provisions in workplace policies communicated to employees can become legally enforceable as contractual provisions, leaving employers open to breach of contract actions.

In this case a worker accepted the offer of employment with Goldman Sachs as a client financial adviser and was provided with several employer-generated documents, including one called 'Working With Us' (WWU).

The 119 page document set out information about the employer and contained a number of provisions, including OHS provisions, which were argued by the employee to constitute conditions of employment binding on both the relevant employee and the employer.

In two sections of the WWU, the employer refers to taking 'every practical step to provide and maintain a safe and healthy work environment for all people'.

The provision continues with the statements that prevention is the most effective health and safety principle and that 'through a shared responsibility, co-operation and support from all people' the firm will realise its health and safety objectives and create a safe working environment.

It is said that health and safety is a shared responsibility of the firm and each team member. The document continues: 'in fulfilling this responsibility, the firm has a duty to provide and maintain, so far as is practicable, a working environment that is safe and without risk to health'.

Worker dismissed

The worker complained of a breach of contract of employment, when as a result of a number of clashes and on-going disputation the employee was dismissed.

The nature of the conduct of the employer's office manager in connection with reallocation of clients following resignation of another adviser was in issue.

The financial advisor claimed the company had breached his employment contract by not adhering to the OHS provisions of its WWU policy.

A critical issue was whether the employee suffered a major depressive disorder as a result of conduct of employer's employees, including the office manager.

In July 2006, Justice Wilcox in the Federal Court found that the worker had established his case for breach of contract, which Goldman Sachs appealed.

Appeal dismissed by Full Court

The majority of the Full Court - Justices Black and Marshall - agreed with Justice Wilcox.

The Chief Justice noted: 'The relevant passage of the primary judge's reasons only need be set out to see the error of [the employer's] submission:

'It must be taken to have been within the contemplation of the parties that, if the obligations were not fulfilled, the particular employee to whom the obligations were owed might become upset, stressed and disturbed.

'It is notorious that stress and disturbance of mind may lead to a psychological disability. It may be unusual for disturbance of mind to lead to a psychological condition as severe as that suffered by Mr Nikolich; there is no evidence on the point. However, that is a statement about the extent of the injury, not its type.

'This is not a case, as in Rowe v McCartney, of a mental disability arising out of irrational guilt feelings that had only a tenuous connection with the plaintiff's cause of action. This is a case of a mental disability that was a particularly severe manifestation of the very type of detriment that the WWU promises were designed to prevent.'

The Full Court found it was evident the primary judge did consider that psychological injury was a 'foreseeable consequence' of the employer's failure to fulfil its obligations as set out in WWU policy.

The appeal was dismissed.

Goldman Sachs JBWere Services Pty Limited v Nikolich [2007] FCAFC 120 (7 August 2007)

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