Managing Psychosocial Risks in the Workplace: A Lesson from the High Court

A recent High Court ruling has highlighted the importance of managing psychosocial risks in the workplace. An employer was ordered to pay $435,000 in damages after failing to fulfill its duty of care—an outcome that serves as a crucial reminder for businesses to proactively address mental health risks before they escalate.

The Zagi Kozarov Case: A Cautionary Tale

Background: Zagi Kozarov, a solicitor working in the Specialist Sexual Offences Unit, developed PTSD and depression due to the nature of her work. However, she refrained from informing her employer out of fear that it would impact her career progression.

Legal Action: After leaving her job, Kozarov sued the State of Victoria for negligence. The employer contended that they could not be held accountable for an issue they were unaware of.

Court Decision: The High Court ruled in Kozarov’s favor, stating that the employer had breached its duty of care because:

• The risk was foreseeable and should have been managed.
• The organization had a Vicarious Trauma Policy in place but failed to enforce it, demonstrating awareness of the risk but a failure to act on it.

What Employers Can Learn

This case highlights several key considerations for organizations:

?? Foreseeability of Risk: Employers cannot claim ignorance when risks are foreseeable. The nature of certain jobs inherently comes with mental health challenges that must be proactively addressed.

?? Policy vs. Action: Simply having a policy is not enough. Employers must ensure their mental health and well-being policies are actively enforced and regularly reviewed.

?? Proactive Risk Management: The best defense against legal and financial consequences is demonstrating that risks are identified, assessed, and mitigated.

Taking Action Before It’s Too Late

Workplace mental health isn’t just about compliance—it’s about fostering a culture where employees feel safe and supported. Employee Assistance Programs (EAPs) offer a proactive solution, providing employees with access to confidential counseling, mental health resources, and strategies to cope with workplace challenges before they become overwhelming.

Importantly, this case underscores that reasonably foreseeable risks must be managed—even if employees do not report them. In some instances, prioritizing safety must take precedence over an employee’s reluctance to disclose personal struggles.

Final Thought: Employers who invest in EAPs and robust mental health strategies not only create healthier workplaces but also protect themselves from costly legal battles. Addressing psychosocial risks isn’t just about avoiding liability—it’s about creating a workplace where employees can thrive.

If your organization isn’t actively managing workplace mental health, now is the time to start. Don’t wait until it costs you in more ways than one.

Note:? Kozarov v State of Victoria. In April 2022, the High Court of Australia unanimously ruled in favor of Zagi Kozarov, a former solicitor in the Specialist Sexual Offences Unit of the Victorian Office of Public Prosecutions. Ms. Kozarov developed post-traumatic stress disorder (PTSD) and major depressive disorder due to her exposure to traumatic material in her work. The court found that her employer had breached its duty of care by failing to implement and enforce measures to prevent such psychological injuries, despite the foreseeable risks associated with her role. This landmark decision underscores the legal obligations of employers to proactively manage psychosocial risks in the workplace.

CDN.HCOURT.GOV.AU