Are Employers Liable for Employees’ Psychiatric Injuries?

Are Employers Liable for Employees’ Psychiatric Injuries?

July 13, 2022

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In the recent case of Kozarov v Victoria, the High Court of Australia made a significant and important decision affecting all employers and employees in Australia. The case concerns the liability of employers for any psychiatric injuries which employees suffer at work.

This article provides a summary of the case and its impact on work health and safety laws in Australia.

Facts of the Case

Ms Kozarov worked as a solicitor for the Victorian Office of Public Prosecutions (OPP) from June 2009. She worked in the Specialist Sexual Offences Unit (SSOU). Her work in the SSOU involved regular exposure to child sexual assault cases. This included observing graphic images as evidence and dealing with traumatised complainants who were both children and adults. Some of the complainants Ms Kozarov dealt with were the same ages as her own children.

In September 2009 or March 2010, Ms Kozarov attended one of the OPP’s workshops on vicarious trauma. During the workshop, Ms Kozarov gave examples of how her work had affected her as a mother, and how she had become uncomfortable leaving her children with their grandparents because she had thoughts of inappropriate behaviour.

By late 2010, Ms Kozarov had become increasingly outspoken during staff meetings about how the work at the SSOU was affecting the lives of staff members.

On 30 March 2011, Ms Kozarov attended an after-hours staff meeting at which “significant concerns” were raised about the struggles of SSOU staff and the fact that they felt they were not being provided with adequate support. Management was not present at this meeting.

On 18 April 2011, Ms Kozarov signed a staff memorandum which set out the “stress-related symptoms experienced by solicitors”.

On 20 April 2011, Ms Kozarov attended a resilience training session for SSOU staff. The session was run by a psychologist who also provided counselling services to OPP staff members on behalf of the OPP. During the session, Ms Kozarov spoke about her vigilance for paedophiles at swimming pools and her discomfort with strangers looking at her children.

On 9 June 2011, Ms Kozarov unsuccessfully attempted to resist the allocation of a further case file to her as she was unable to handle the new case due to her existing high workload.

On 11 August 2011, Ms Kozarov became ill and took two weeks of sick leave from work. She had an out-of-character dispute with her manager on her return to work on 29 August 2011. The dispute related to her heavy workload and how it was affecting her.

In January 2012, Ms Kozarov took pre-planned annual and long-service leave. In February 2012, Ms Kozarov was diagnosed with post-traumatic stress disorder (PTSD) as a result of the vicarious trauma she had suffered from her work. She requested an immediate transfer out of the SSOU. She was later also diagnosed with major depressive disorder.

The OPP requested that she provide medical evidence to support her request to be transferred out of the SSOU. After a number of unsuccessful attempts at redeployment, the OPP terminated Ms Kozarov’s employment.

Ms Kozarov sued the OPP in negligence, alleging that they had breached their duty of care to ensure her health and safety by failing to protect her from the risk of psychiatric injury.

The Decisions of the Supreme Court and Court of Appeal

At first instance, the Supreme Court of Victoria decided that the OPP had breached its duty of care towards Ms Kozarov by failing to implement its vicarious trauma policy and awarded her $435,000 in damages.

The vicarious trauma policy required the OPP to recognise that people would develop mental health issues within two years of being within the SSOU. It further indicated that individuals should be rotated and that welfare checks should be conducted on employees, the result of which would trigger the OPP to take action in accordance with the policy. However, as the policy was not well known, it was never followed.

The Court held that the OPP was aware of the serious mental health risk for Ms Kozarov and by the end of August 2011, the OPP had been put on notice to take reasonable steps to mitigate the risk (such as by rotating Ms Kozarov out of the SSOU). The evidence pointed to Ms Kozarov accepting such an offer if it had been forthcoming.

The Court of Appeal allowed the OPP’s appeal against the decision. It held that the exacerbation of Ms Kozarov’s psychiatric injury after August 2011 was not caused by a breach of duty. It disagreed that Ms Kozarov would have cooperated with taking steps to be rotated out of the SSOU.

Ms Kozarov appealed the decision to the High Court of Australia.

The High Court Decision

The High Court unanimously allowed Ms Kozarov’s appeal, setting aside the Court of Appeal’s decision, reinstating the Supreme Court’s decision, and awarding Ms Kozarov her costs.

Justices Gageler and Gleeson held:

  • The OPP had a duty to maintain a safe system of work, and to exercise reasonable care to avoid a foreseeable psychiatric injury to its employees.
  • Both the trial judge and the Court of Appeal were correct in finding that Ms Kozarov’s “genuine distress” in her dispute with her manager was a significant indicator of a possible work-related psychiatric injury.
  • The OPP had been put on notice that there was a risk of psychiatric injury to Ms Kozarov due to a number of “evident signs” which indicated that she may be experiencing vicarious trauma in the workplace. Those signs included:
    • The staff memorandum she signed on 18 April 2011.
    • Her statements at various staff meetings, the September 2009, and the April 2011 training session about her abnormally overprotective parenting of her children and hypervigilance.
    • Her excessive work load and propensity to overwork.
    • She had demonstrated an unhealthy emotional involvement in some of her cases.
    • She had demonstrated difficulties managing her existing case load and had resisted being allocated an extra file in June 2011.
    • The fact she took a period of two weeks’ sick leave in August 2011.
    • The fact she had experienced a recent significant traumatic event in the form of an attempted suicide by a child complainant in August 2011.
    • Her manager and others had formed the view that she was “not coping” with her work.
    • The fact she had a highly emotional and agitated response to her dispute with her manager in August 2011.
  • The Court of Appeal had erred in concluding that Ms Kozarov would not have accepted being rotated out of the SSOU in August 2011. Ms Kozarov had requested to be rotated out of the SSOU in February 2012. Expert evidence also suggested that a person who was suffering from a serious illness would be more likely than not to accept medical advice on how to mitigate or remove the cause of the illness. Thus, the Court of Appeal had failed to consider the inherent likelihood that a reasonable person advised of the risks of serious psychiatric injury may have, on the balance of probabilities, accepted advice on such risks.

Justices Gordon and Steward agreed with the decision of Justices Gageler and Gleeson. They held:

  • The OPP were put on notice that there was a risk of psychiatric injury to Ms Kozarov in August 2011 at the latest.
  • The Court of Appeal had erred in concluding that Ms Kozarov would not have cooperated with taking steps to being rotated out of the SSOU. In fact, she would have cooperated with these steps. Her exposure to trauma would have been reduced if she had been properly informed of the risks of vicarious trauma and PTSD by further training or proper diagnosis by a clinician.

Chief Justice Kiefel and Justice Keane, and Justice Edelman agreed with Justices Gageler and Gleeson. In particular, Chief Justice Kiefel and Justice Keane noted that the OPP should have appreciated the serious risk posed to Ms Kozarov’s mental health because of its vicarious trauma policy (which the OPP had failed to implement).

Impact of the Decision

The Kozarov case confirms that employers have a duty to recognise psychiatric injury risks in their workplace and take steps to protect employees from these risks. This is particularly relevant to employers whose employees perform work which inherently exposes the employee to a high-level of risk. Examples of such employees include: lawyers working within certain areas of law, police officers, prison and detention centre officers, paramedics, social workers and mental health care professionals. Whether an employer will be held liable for a breach of duty will be highly dependent on the circumstances of the case. Depending on the circumstances, employers may have to go beyond offering employees counselling, seminars or training programs in order to show that they have discharged their duty of care.

The Kozarov case also confirms the importance of employers taking steps to follow their own work health and safety procedures. An important reason for the Court’s finding that the OPP had breached its duty was the fact that it did not follow its own vicarious trauma policy. This demonstrates that it is vital that employers not only adhere to their legal obligations under work health and safety laws, but that they also know, understand and act on their own work health and safety policies.


PH Solicitor understands that the Kozarov decision may affect many employees and employers around the country.

If you would like to discuss your employment rights or your business’ rights about a workplace psychiatric injury, we are here to help. Call our office on (03) 9642 0435 or email for a confidential discussion with our team.


Kozarov v Victoria [2022] HCA 12