Andrew Douglas: We’re up to our main topic now, Kim, and I want you to go through it because you know better than me, and it’s your skill. But can I just say to you, I know this is not law, okay? This is a disclosure document where people can say what it is. And I know they went down by $2 billion last year. And I know there’s a new government that wants to turn back to Dickensian times on how we work people, apparently. But this is crazy.

Kim McLagan: Yeah.

Andrew Douglas: Off you go.

Kim McLagan: So it’s primarily to address, as they did in Victoria last year, but this is just going a whole extra level in terms of trying to limit the cost on the scheme of psychological injury, because psych injuries have increased exponentially, and the costs associated with them as well. But I just, I can’t believe if this gets up, it would just be a crime, I think.

They want, so people can’t bring a claim for workers’ comp for bullying and harassment, if it goes through, unless they get a ruling from the industrial relations court that they have been bullied or harassed. So they need an order that they have been bullied and harassed before they are able to bring a claim for bullying and harassment in the workers’ comp scheme.

Andrew Douglas: Now, I just want to run this past you because I think it’s an argument. At a federal level, and under state discrimination law, if I treat someone differently as a result of them making a complaint-

Kim McLagan: Yes, victimisation.

Andrew Douglas: It’s called victimisation. Now, if the evidence is sufficient to satisfy an insurer that there has been bullying or harassment, why is it that you have to go and run the cost and expense of a trial to vindicate something which insurers have been doing for the last 40 years?

Kim McLagan: But how damaging is that going to be to the individuals?

Andrew Douglas: Oh, it’s terrible, and delaying and expensive.

Kim McLagan: Yeah.

Andrew Douglas: So I go to bring the psych claim, and I’m two years later having an argument in the Industrial Relations Commission to prove that I’m damaged. By that stage the person’s life is devastated, ’cause we all know psychological injury, it is the speed at which you address it, which is the key. And here we’re doing something that will prolong the exposure to the pain. And can I say litigation on a personal level hurts, harms, it’s constantly in your thought.

Kim McLagan: So damaging.

Andrew Douglas: Anyway, that gets better, don’t worry.

Kim McLagan: So they’re changing the definition of psychological injury to make it more in line with Victoria. That’s all okay. They’re introducing-

Andrew Douglas: Well, it sort of is, and as I say, that’s to cut out the burnout claim type argument.

Kim McLagan: Yep.

Andrew Douglas: But they go much further than cutting out the burnout claim. We’ll come to that in a second.

Kim McLagan: Yeah, we’ll come to that.

Andrew Douglas: But then they get-

Kim McLagan: I’ve got my notes. I need to follow my notes.

Andrew Douglas: You don’t need to follow your notes. You’re going to talk to me about reasonable management action and the rubbish in that?

Kim McLagan: Well, they’ve brought the same definition within Victoria, but, oh, I don’t know that this is such a rubbishy argument because so many claims in Victoria are accepted on perception. And I’ve sat in front of many an insurer, and they say to the employer, “You’ve done nothing wrong, but the employee perceives that you have.” And claims have been accepted that really shouldn’t have been. And so they are introducing a defence based on perception of reasonable management action. So I actually think that’s going to be a good thing if that does come in.

Andrew Douglas: Funny isn’t it, these are the subjective element of the…

Kim McLagan: I know.

Andrew Douglas: It underwrites the whole scheme’s-

Kim McLagan: I know, but I see so many claims get accepted.

Andrew Douglas: Remember you’re… Can I just say to you, I know you do, but we are pathologists, okay. You and I sit after people who are damaged. Does that make sense?

Kim McLagan: Yeah.

Andrew Douglas: We don’t see the thousands of claims that go through day to day. And the issue is a piece of legislation that’s designed to deal with 100th of a percent of the issues. It’s flawed. So remember this will be used for more than what we see.

Kim McLagan: Yeah.

Andrew Douglas: This will be used much more for people who are quite genuine. And that’s the part that I object to.

Kim McLagan: Yeah.

Andrew Douglas: When you create laws because of exceptions, you create exceptional laws and that means-

Kim McLagan: That’s true.

Andrew Douglas: Many more people are harmed by it. So I think the Victorian one is bullshit and I think this one is as well.

Kim McLagan: Yeah, well, it does get worse.

Andrew Douglas: Oh, yes, it does.

Kim McLagan: The psychological injury must be caused by a relevant event, or serious and relevant-

Andrew Douglas: And what are the events? They are horrible.

Kim McLagan: Violence, criminal contact, bullying and harassment, so, yeah.

Andrew Douglas: So in other words, from what we know, around about 90% of psychological injuries aren’t caused by those things.

Kim McLagan: Mm, that’s right.

Andrew Douglas: They’re caused by aggregational damage through poor leadership and design. That is actually why New South Wales introduced, was the very first to introduce the psychological hazards legislation. That bit of evidence, not these things, the aggregational nature of leadership and design areas that harm people and they can’t recover from ’cause they’re not once off incidents. They’re built up over time and the people are destroyed. So it gets around the very safety legislation what it’s designed to protect.

Kim McLagan: It’s crazy that you have the same regulator doing both and they just… I can’t think of the word, you know what I mean.

Andrew Douglas: Yeah, well I think incompatible is what it is.

Kim McLagan: Yes, that’s the word.

Andrew Douglas: That’s nice, I got the word for Kim, incompatible. There you go.

Kim McLagan: And to deal with work pressure, all they’re allowing for that is that an employer will pay-

Andrew Douglas: So that’s a new disorder.

Kim McLagan: A new disorder-

Andrew Douglas: Which is everything-

Kim McLagan: Work pressure disorder.

Andrew Douglas: Which is everything else.

Kim McLagan: Everything else. And all they get from that is the employer’s liable for eight weeks-Of medical treatment.

Andrew Douglas: Treatment.

Kim McLagan: So yeah, they’re just… If this comes through, it’s going to just damage so many more people than what it’s aiming, just trying to save some money for the scheme.

Andrew Douglas: The net result is that people will get around it through the creation of physical disorders, which is what, you know here in Victoria, where the changes came through and definitions using DSM-5 as the basis for it, all the doctors started using diagnosis from DSM-5. So all the claims are accepted.

So we saw an initial drop in claims go back up. We are going to harm people so badly in New South Wales that it will manifest in physical disorders as well that come through from it. But you’re right, Kim, there are very, very few people who bring a psychological claim who haven’t been harmed.

Kim McLagan: Mm.

Andrew Douglas: And are we really just turning a blind eye to that? Is that really what we’ve become as a culture? Because icare completely stuffed it up, should all of New South Wales’ workers be sacrificed when it’s an organisation that stuffed it? It didn’t have to do that. It could’ve rejected all the claims on the basis that it currently had. It didn’t have to be $2 billion in the red, but bad management has led to a decision to damage people. I think it’s horrible.

Kim McLagan: Yeah. And the other thing that really sticks in my craw, is to bring a claim for common law damages their whole person impairment has to be 31% or more, which means you totally stuffed at that point. You can barely care for yourself if you’re that high impairment.

Andrew Douglas: That’s shocking, hey Kim.

Kim McLagan: So it is, it’s awful.

Andrew Douglas: I think that’s probably enough. I think we’ve agreed now that it is terrible. That’s why I live in Melbourne. No, that’s not the reason.

Kim McLagan: Okay.

Andrew Douglas: It is terrible. Why don’t we get onto the case study, ’cause I think we got a bit excited during this.

Kim McLagan: Yeah, we did.

Andrew Douglas: We did. I think you could probably guess from us, we think that’s shit legislation and if it gets up, it is a shame, and one that should not be forgiven quickly.

Kim McLagan: No.

Andrew Douglas: Off you go.

Kim McLagan: Okay.

Andrew Douglas: Case study.

Kim McLagan: So case study. Ivy worked in the finance department of MovMe, an online business that manages all the changes of address issues when you move house. MovMe is a 24 hour operation and the financial management of the business is complex and fast moving. MovMe CEO Ackland Speak is a Harvard Business School graduate. At 29 years of old, this is his third startup. Risk might as well be his middle name. Nothing seems impossible to him.

His expectations of employees are extremely high. He wants them to be hungry, competitive, argumentative, creative, but above all, always available and hardworking. Ivy is a senior accounts manager. Her initial pay was minimal, but she was offered shares and accepted the trade off. Now she’s a wealthy woman. However, Ackland remains relentless. She told her counsellor that working for him was like an addiction. You don’t want it, but you can’t let go.

Andrew Douglas: It’s a bit like me, isn’t it? You been with me for 25 years.

Kim McLagan: Some of these case studies do speak of you. I can’t help it, I wrote them. Her official hours were set at 10 hours a day, five days a week, but it was not uncommon for her to work weekends and late into the night when client demand was high. She began to notice physical symptoms, hair collecting at the bottom of the shower, rough skin, and a breakout of pimples on her face and body.

Andrew Douglas: That’s me.

Kim McLagan: Something she’d never experienced before. She started taking melatonin at night to help her sleep and became careless about her appearance since she mostly worked from home.

Her relationship with her partner Tom became strained. She was constantly tired, irritable, and often missed meals with him, instead sitting cross-legged at the table working on her laptop. When she asked Ackland to introduce a bit more structure into his work planning, he told her that if she couldn’t handle it, she could leave. After that, his interactions with her became brusquer, at times bordering on rude.

Her employment contract stated that she could work flexibly from home or at the office, and her usual hours range from 38 to 50 per week. Her role was classified as award-free.

Andrew Douglas: There you go. So I thought it was an interesting set of questions. So I enjoyed writing it. So did Ivy have a right to disconnect and did Ackland’s conduct in relation to that right give her a cause of action.

Kim McLagan: Yeah. She did have a right to disconnect, didn’t she?

Andrew Douglas: Yeah, so remember the disconnect right does arise by statute, but it is only when she raises that right and it’s unreasonably refused. And then if you were treated adversely, there’s a general protections claim that arises. So the short answer is this is a , or a general protections claim.

Kim McLagan: Yeah.

Andrew Douglas: For that disconnect. But what I want to say about the right to disconnect is it’s not something you could just have until you raise it and it’s rejected on business grounds and those business grounds are insufficient. You don’t have a right to disconnect, which means, what do you need to do? In this case, the contract had to say, these are the reasonable hours of work, these are the expectation, set it out. That gets over the first part of the right to disconnect.

The second part is there is a policy and process that sits behind it that governs that. But the problem is that our friend here, Ackland, didn’t give a damn about any of that. So when she raised it, he had no business basis at all, no structure to work from. He was stuck with what he had because he was requiring her to work beyond what his contract said. So, a good one.

Kim McLagan: Okay.

Andrew Douglas: What’s two?

Kim McLagan: Would Ivy have a viable workers’ comp claim in Victoria, New South Wales or other jurisdictions? What if New South Wales changes its law? Hang on. What if New South Wales changes its law as proposed?

Andrew Douglas: Okay, over to you. Now you would’ve made some notes on that, I would’ve thought.

Kim McLagan: I did. She will have a claim, obviously, based on the accessible hours being unreasonable. If the laws come in as New South Wales, they’ll look at whether it’s a relevant event. So they would have to be satisfied that she had been bullied by Ackland for these hours.

Andrew Douglas: Yeah, not beaten ’cause she wasn’t beaten.

Kim McLagan: No, no violence.

Andrew Douglas: Just adding that. No, we can add a bit of violence. I should have probably-

Kim McLagan: But then, of course, she would have to substantiate that she’d been bullied.

Andrew Douglas: And she’d have to go off to the state Industrial Relations commission. So a year later she’d just be devastated.

Kim McLagan: Yeah.

Andrew Douglas: And in all other jurisdictions the answer is yes.

Kim McLagan: Yeah.

Andrew Douglas: She would have a good claim.

Kim McLagan: Yeah, for sure.

Andrew Douglas: Okay. Is there, sorry, here’s a-

Kim McLagan: I’ll ask this ’cause you’ll be answering it. Is there a work and health and safety issue? Could anyone be charged, and if so, who? What would be the potential charges and penalties?

Andrew Douglas: All right, not a hard one to do. So if we just go back to primary duties and the standard of care, first thing, standard of care, reasonable practicability. Was there hazards? Abundance of them, yep, no doubt about that. What was the nature of the risk? It was always becoming apparent clearly what those risks were. Harm was already being done so the risks were manifest. So what were the controls? Well obvious structure, clarity, less hours, less demand, all those things, all doable.

Kim McLagan: Yeah.

Andrew Douglas: Were there resources? Well, the organisation was a wealthy organisation, had no trouble actually doing that to provide her with a safe workplace, to monitor work, to ensure she was properly supervised. You know, there’s five breaches, five simple breaches.

Kim McLagan: Yeah.

Andrew Douglas: The difficulty here is it gets a bit uglier, particularly for our friend Ackland. Because, and because safety law is an attribution law, if Ackland is liable, the organisation is liable at the same level. He has due diligence obligations. Let’s forget about those. We don’t need to worry about those ’cause he’s well and truly failed those obligations. ’cause he knew of the risk. Objectively ought to know and he knew of the risk, failed to intervene and knew what the law was.

So he’s in trouble. So he would be liable just like the organisation at a primary duty level. But the difficulty for Ackland is, he knew the nature of the problems that she was talking about gave rise to a serious risk of harm, injury or disease. He knew that and he was indifferent to it. Well that’s reckless endangerment any day of the week.

Kim McLagan: Yeah.

Andrew Douglas: So I think here that he and the organisation are probably liable. The issue in sentencing is, although it sounds outrageous what’s going on there is a cultural phenomena that infects safety law. If it’s something part of a culture, the way people behave, even though Ackland owns that culture, I think it’d be seen as a low to moderate breach, not as a higher breach.

So if you’re looking at penalties, he’s certainly not going to jail, Ackland. He’d certainly be getting a fine and be in the couple of hundred thousand dollars sort of category. And the business, it’s probably be in the fine of the 300,000 lower end reckless endangerment. Even though primary duty, breach may have had the same effect. The difference with reckless endangerment is it does look to the nature of the harm. And at the moment we have harm, but not really significant harm that’s been caused. So, 300, 400.

Kim McLagan: Okay.

Andrew Douglas: So there you go. What about, I ask you this one. Does Ivy have any other remedies under the Fair Work Act and can you think what they are?

Kim McLagan: General protections.

Andrew Douglas: Yeah, I think she’s got a general protections claim and it doesn’t matter whether she’s dismissed or not. The claims there, it’s good.

Kim McLagan: Yeah.

Andrew Douglas: And I think the other part is, there is a bullying jurisdiction argument in relation to the conduct that’s occurring. So you could go and get an anti-bullying order as well.

Kim McLagan: Yeah.

Andrew Douglas: I think the difficulty for Ackland in all of this is he’s not going to change and he’s going to be defiant of any court intrusion. So I think Ackland’s in for big whack on the general protections. And can I say last week we gave you the case that talked about general protections damages lining up with the common law and discrimination. So this isn’t a small claim. When you look at what is the harm in general damages, you’re looking at 50 to $70,000 absolute minimum.

Kim McLagan: Yeah.

Andrew Douglas: Probably 90.

Kim McLagan: Yeah.

Andrew Douglas: Can’t work again. Senior employee, probably two to three years. She’s probably on 2 to 300,000. She’s got 6 to $700,000 medicals. It’s probably, you know, close to three quarter of a million to a million dollar claim. Probably your insurance is not looking so good around that. So I think an interesting case, ’cause it just shows you the the breadth of liability, which overwork can cause. How about that?

Kim McLagan: There you go.

Andrew Douglas: We got to the end, that wasn’t too bad, wasn’t it? You should show more control.

Kim McLagan: You’ll sleep well tonight.

Andrew Douglas: I’ll sleep well tonight, I will. Thanks very much. Good to catch up.

Kim McLagan: See you.

Andrew Douglas: See you later.

Kim McLagan: Bye.

Andrew Douglas: Cheers.