An employer must make a $2.8 million payout, including more than $1.7 million for pain, suffering and economic loss, to a long-serving manager who had her life “effectively destroyed” by a new chief executive.
In what is likely to be among the biggest compensation payments for a general protections claim, the Federal Court has ordered Hawkesbury Race Club to provide $1,770,510 in compensation, including $214,250 for pain and suffering, $1,169,048 for past economic loss, $78,980 in interest on past economic loss and future economic loss of $869,745, plus penalties and costs.
To arrive at the final compensation figure, the judge deducted $561,513 to credit the club for workers compensation payments already made to the manager.
After ruling last December that the club through its chief executive had breached its contract with the manager – failing to pay her commissions as well as long service and accrued leave following her early 2017 dismissal – Justice Steven Rares in March imposed penalties of more than $180,000 in addition to costs of $300,000.
In May he affirmed the primacy of federal over state laws in determining that NSW workers compensation caps did not shackle the amounts he could award (see Related Article).
That finding left him free this month to finalise compensation.
“Dropping like flies”
In his liability ruling last year, Justice Rares noted that the chief executive in his first meeting with the manager said she was earning “too much money” and from that point brought an “overbearing micromanagement style” to the relationship that included a “dogged interrogation. . . about trivial expenses”.
Among other pressures the chief executive applied to the manager was his denial of her annual bonus “because he was irritated by ‘her demands'”, as he put it in an email.
“Her ‘demands’ were to have the money then due to her paid,” the judge said.
Justice Rares said that, in his opinion, the club, through the chief executive “effectively destroyed [the manager’s] life”.
“She cannot work and, as the joint experts agreed, is permanently incapacitated from doing so because of [the chief executive’s] and the club’s conduct.”
“That conduct caused a very serious psychiatric illness that may never be cured, or ameliorated to any significant degree.”
He said the injury occurred “in no small part because [her] breaking point was [the chief executive’s] treatment of her” during a two day period in which she had asked him to convey to the board her concerns over his treatment of her.
The chief executive replied by asking her to meet with him to discuss her work performance, adding that she should “bring a support person with you if you wish”.
While the manager was apparently left “even more distressed, emotionally drained and began vomiting”, the chief executive was found to have been “gloating to his father-in-law [former Racing NSW chief steward Ray Murrihy] later that day”.
He used the term “dropping like flies” when he forwarded to Murrihy an email from the manager with a medical certificate informing him she was on stress leave.
Salutary warning on bullying
The case is a salutary warning to all employers that they need to take allegations of bullying seriously and that they should be proactive in monitoring and responding to the risks to mental health to which bullying can expose its employees.
In the case of Hawkesbury Race Club, it left it up to the chief executive to deal with the manager’s complaint himself.
The payout represents one of the largest awards of compensation for a general protections claim.
Racing NSW placed Hawkesbury Race Club into administration on the eve of the first judgment in the case.