Recently, an employer's non-delegable duty to take reasonable steps to protect an employee from psychiatric harm was re-examined in Zagi Kozarov v State of Victoria [2020] VSC 78. 
 
Zagi Kozarov (Kozarov), a solicitor,¹ worked in the Specialised Sexual Offences Unit (SSOU) of the Victorian Office of Public Prosecutions ('OPP') from June 2009 to April 2012.²  Kozarov claimed that she sustained psychiatric injuries, specifically chronic post-traumatic stress disorder ('PTSD') and major depressive disorder ('MDD'), during the course of her employment in the SSOU due to repeated exposure to a high volume of sexual offence cases, many of which involved child exploitation and pornography. 

Kozarov alleged that her employer failed to take reasonable steps to protect her from harm, claiming negligence, breach of contract and breach of statutory duty³ against her employer, the State of Victoria. 

The employer denied liability and submitted that its managers⁴  had attempted to spread work evenly within the SSOU. The employer asserted that Kozarov agreed to the terms of employment, which included exposure to distressing content, and that the employer was entitled to assume that SSOU employees were fit to perform their contracted work unless otherwise notified.⁵ The employer stated that employee privacy and autonomy needed to be considered with regard to measures that the employer ought to have taken to protect Kozarov from harm.⁶  In the event the employer was found negligent, it submitted that the court should also find that there was contributory negligence on the part of Kozarov, who ought to have notified her employer of her symptoms earlier.⁷

Briefly, the important facts in this matter are as follows:

1. On 30 March 2011, SSOU staff convened a meeting without management and prepared a joint memorandum on staff wellbeing addressed to the management team ('2011 Memo'). The 2011 Memo was signed by the majority of the SSOU staff, including Kozarov. The 2011 Memo noted staff's struggles with working in the SSOU, including long hours and high levels of stress.⁸ 
2. Mr Brown sent an email to OPP executives on 18 April 2011, providing a copy of the 2011 Memo. In June 2011, Mr Brown submitted a 13 page document for the OPP executive outlining pressures on SSOU and requesting further resources (Business Case to OPP).⁹
3. Kozarov stated that there was no change to the volume of work after the 2011 Memo, nor did anyone approach her to check in.¹⁰
4. On 9 June 2011, Kozarov emailed her managers about a matter she had been allocated ('Lim Case') stating that she was unable to handle the matter with her current work load.¹¹  She was ultimately required to retain the file. The file involved two girls who were abused by their grandfather from the age of seven. 
5. On 11 August 2011, Kozarov took sick leave until 29 August 2011, while the Lim trial was ongoing. During this time, the more vulnerable complainant attempted suicide on a day that Kozarov was away sick. Kozarov attended her first session with psychologist George Foenander on 23 August 2011. 
6. On her first day back in the office after her sick leave, Kozarov had a disagreement with Mr Brown. 
7. On 9 February 2012, Ms Kozarov emailed management stating that she could not return to work in the SSOU because of how the work was affecting her. 

Negligence 

An employee will be able to recover damages against an employer for psychiatric illness if the employee can show that:

• they suffered a recognised psychiatric illness; 
• the employer could reasonably foresee that the employee would suffer a psychiatric illness; 
• the employer failed to take reasonable steps to avoid or diminish those risks, having regard to the nature of the contractual obligations, equity and statutory responsibilities; and
• the employer's failure to take reasonable measures to avoid the risk must be a cause of the employee's psychiatric illness.¹²

Reasonably foreseeable and notification to employer 

In determining whether there was a reasonably foreseeable risk to Kozarov, Her Honour found that executives and management were on notice of the risks to SSOU staff with respect to burnout, work stress and/or exposure to vicarious trauma ('VT') before the claim period.¹³

Her Honour noted there were signs specific to Kozarov which provided notice to the employer of the risks regarding Kozarov's mental health in connection to her work.¹⁴  Although the employer argued that Kozarov told her managers that she loved her job and showed no signs of illness before February 2012.

Her Honour accepted evidence that Kozarov's managers and peers noticed that she was not coping in the SSOU at the end of August 2011. Noting Kozarov's circumstances,¹⁵ her case allocation/work burden, along with her behaviour both leading up to and around the time of her meeting with Mr Brown at the end of August 2011,¹⁶  Her Honour concluded the facts of this case were distinguishable from caselaw, establishing that the employee must inform their employer of risks to their health.¹⁷  

Her Honour found there were sufficient signs available to Kozarov's employer of a reasonably foreseeable risk of injury that was not farfetched or fanciful.¹⁸  With regard to the 2011 Memo, Her Honour noted that it: 

"...is evidence that the system previously in place at the SSOU was defective in notifying management that staff were experiencing adverse health effects...it cannot be discounted as relevant notification regarding those individuals." ¹⁹

Breach of duty 

Determining the scope of an employer's duty of care to avoid psychiatric harm to an employee depends on the circumstances of the case.²⁰  The employer was aware of the safety risks within the SSOU, yet failed to implement a system that upheld the terms of the VPS agreement and internal policies, including the Vicarious Trauma Policy ('VT Policy').²¹  It was found that staff and management were not adequately trained on the risks to staff mental health from VT, the VT Policy, or the risks of developing PTSD from work.²² 

Her Honour outlined a safe system of work that should have been in place during the claim period, including:

• An active OH&S framework; 
• More intensive training for management and staff regarding the risks to staff posed by VT and PTSD; 
• Welfare checks and the offer of referral for a work related or occupational screening in response to staff showing heighted risk; and 
• A flexible approach to work allocation, especially where required in response to screening, including options to rotate temporarily or permanently out of the SSOU.²³  

It was held that the employer's response to the risks of SSOU staff and Kozaorv were not that of a reasonable employer.²⁴  

The court held that the SSOU staff made straightforward/practical suggestions to alleviate work stress and trauma exposure in the 2011 Memo.²⁵  The employer did not explain why these suggestions would be difficult to implement in reference to cost, practicality and convenience (applying the Shirt Calculus).²⁶  

Causation 

Her Honour accepted evidence regarding the link between the nature and intensity of Kozarov's work in the SSOU and her injury²⁷ finding that it was likely that the cumulative exposure to SSOU casework caused Kozarov's injuries.²⁸  Although Kozarov did not advise her employer about her referral to Mr Foenander in August 2011,²⁹ she was not diagnosed with PTSD until February 2012.

Kozarov was not adequately trained to understand that cumulative exposure to SSOU work could result in PTSD. In determining whether having reasonable preventative measures in place would have been effective in preventing the injury, it was found that Kozarov would have most likely participated in occupational screening, which would have revealed her work related symptoms of PTSD. Missed opportunities for early intervention and occupational screening lead to Kozarov's injury becoming more severe and if action had of been taken around August 2011 to reduce Kozarov's exposure to VT, she would not have suffered PTSD of the same severity.³⁰ 

Importantly, Her Honour found that Kozarov did not contribute to her injury. 

Breach of contract claim 

The VT Policy, contained in the SSOU manual, stated that the OPP would respond to VT by taking into consideration the impact of working in the sexual assault field when allocating working or managing a staff's workload, and encourage staff to rotate through the SSOU to minimise their exposure to some of the work.³¹ The court held that the language in the VT Policy was not binding or contractual in nature and ultimately it was not the intention of the parties to incorporate the VT Policy into the employment contract.³²

Kozarov's employment agreement stated that the terms and conditions of her employment were set out in the 2006 VPS Agreement³³ and the Public Administration Act 2004 (Vic). Importantly, it was found that the VPS agreement formed part of Kozarov's employment agreement. The VPS agreement stated that the allocation of work 'must include consideration of the Employee's hours of work, health, safety and welfare' and that work would be allocated so that the employee does not have to routinely work beyond their ordinary hours of work.³⁴

Kozarov and her peers in the SSOU often worked after hours and worked extensive overtime. The employer breached its obligation to Kozarov when allocating an amount of work that necessitated her routinely working overtime,³⁵ for example when Kozarov was allocated the Lim file.

Accordingly, the employer was in breach of express and implied terms of the employment agreement³⁶ when the employer failed to consider the risk of excessive hours of work on the employee's health and safety when allocating work to employees.³⁷

Significance and implications  

The court found that the employer breached its duty of care to Kozarov, which resulted in her psychiatric injuries. The court also found that the employer breached its contractual obligations. This case highlights the need for employers to be vigilant in the workplace in ensuring that there are systems in place that allow employers to identify risk of psychiatric injuries and prevent such injuries. Employers should also be aware of their obligations within their policies, especially in circumstances where they have been incorporated into the employment agreement. 

[1] Kozarov had a daughter in 2004 and a son in 2006.
[2] When Kozarov commenced work in the SSOU, her children were aged 3 and 5. In the second half of her time at SSOU, the majority of Kozarov’s cases involved child complainants. Kozarov said that there was not a day that she was not exposed to graphic images of rapes or assaults on children.
[3] Her Honour found that no specific statutory breach was ever properly pleaded or particularised and therefore Kozarov did not satisfy her onus in respect of this claim.
[4] Mr Brown, SSOU Directorate Manager, and Ms Robinson, SSOU Manager.
[5] In Taylor v Haileybury [2013] VSC 58, the plaintiff’s claim had ‘hallmarks of litigious hindsight’. The court was unpersuaded that the defendant knew or ought to have known that the plaintiff was at risk of psychological harm.
[6] Hegarty v Queensland Ambulance Service [2007] QCA 366 [45].
[7] Zagi Kozarov v State of Victoria [2020] VSC 78 [19]. The decision in Koehler v Cerebos (Australia) Ltd (2005) 225 CLR 44 places the onus on employees to advise the employer of risks to their health. Employees who fail to inform the employer may give rise to contributory negligence on their part in subsequent proceedings for negligence against the employer – Doherty v New South Wales [2010] NSWSC 450 [225]; Carangelo v New South Wales [2015] NSWDC 665 [278].
[8] Zagi Kozarov v State of Victoria [2020] VSC 78 [153] - [164].
[9] Ibid [169].
[10] Ibid [188].
[11] Ibid [249].
[12] Carolyn Sappideen et al, Macken’s Law of Employment, (Thomson Reuters, 8^th ed, 2016) 268.
[13] Zagi Kozarov v State of Victoria [2020] VSC 78 [558] – [563]. With respect to executive, Her Honuor noted that Ms Fatouros (Mr Brown’s predecessor) made suggestions to executive to further develop the SSOU manual and VT Policy and suggested a more structured approach in dealing with turnover and recruitment in the SSOU in regards to VT. Her Honour also noted the 2011 Memo, the Business Case to OPP, and a meeting that took place between Kozarov and Mr Ward (executive) in October 2011. Her Honour also noted that management were aware of the risks to staff via the monthly staff meetings where staff voiced their concerns regarding workload and the personal impact of working in the SSOU, direct knowledge of the work pressures on staff regarding volume of work and direct encounters with staff etc.
[14] Zagi Kozarov v State of Victoria [2020] VSC 78 [578]. Her Honour notes Kozarov was a signatory to the 2011 Memo, she was outspoken at staff meetings regarding the impact of the work, she was known to be carrying an excessive workload and worked outside ordinary hours, and she sought to avoid the Lim Case etc.
[15] Such as her young children.
[16] Zagi Kozarov v State of Victoria [2020] VSC 78 [609].
[17] Hegarty v Queensland Ambulance Service [2007] QCA 366, Taylor v Haileybury [2013] VSC 58, State of New South Wales v Briggs [2016] NSWCA 344; (2016) 95 NSWLR 467, Hardy v Mikropul Australia Pty Ltd [2010] VSC 42; Larner v George Weston Foods Ltd [2014] VSCA 62; Age v YZ. [2019] VSCA 313.
[18] Zagi Kozarov v State of Victoria [2020] VSC 78 [610]; Wyong Shire Council v Shirt [1980] HCA 12.
[19] Ibid [620].
[20] Dixon J in Swan v Monash LawBook Co – operative [2013] VSC 326; (2013) 235 IR 63 [155].
[21] Zagi Kozarov v State of Victoria [2020] VSC 78 [643].
[22] Ibid [650].
[23] Ibid [702].
[24] Ibid [703].
[25] Suggestions also made in the May 2009 Memo from Suzanne Penhall (then SSOU principal solicitor) to Ms Fatouros on SSOU staff health and well-being concerns.
[26] Zagi Kozarov v State of Victoria [2020] VSC 78 [700]; Wyong Shire Council v Shirt (1980) 146 CLR 40.
[27] Evidence from Mr Foenander, Professor McFarlane & Dr Dharwadker.
[28] Zagi Kozarov v State of Victoria [2020] VSC 78 [717], [719].
[29] YZ v The Age [No 1] [2013] VSC 335; Keane JA in Hegarty v Queensland Ambulance Service [2007] QCA (‘Hegarty’); New South Wales v Fahy [2007] HCA 20. Her Honour noted that Hegarty does not stand for the proposition that an employer owes no duty of care to take steps to identify and respond to signs of psychological distress caused by occupational exposure to stress - Zagi Kozarov v State of Victoria [2020] VSC 78 [544].
[30] Zagi Kozarov v State of Victoria [2020] VSC 78 [737] - [738].
[31] Ibid [98].
[32] Ibid [759].
[33] 2006 VPS Agreement (2009 Extended and Varied Version).
[34] Zagi Kozarov v State of Victoria [2020] VSC 78 [706], clause 11 of VPS agreement.
[35] Ibid [761].
[36] The employer was in breach of the express & implied terms of the employment agreement by its (a) unreasonable allocation of work to Kozarov, (b) failure to encourage or support work/life balance, (c) failure to identify, assess & control workplace hazards and (d) failure to provide a safe working environment - Zagi Kozarov v State of Victoria [2020] VSC 78 [765].
[37] Zagi Kozarov v State of Victoria [2020] VSC 78 [48] & [767].