Negligent Demotion: When Mishandled Management Becomes a Psychiatric Injury
A recent decision from the Queensland District Court, Gairns v Pro Music Pty Ltd [2024] QDC 118, serves as a powerful reminder that an employer's duty of care extends to protecting the psychological health of its employees, even during sensitive management actions like demotion. The court found the employer negligent for the abrupt and insensitive manner in which a long-term employee was demoted, causing a significant psychiatric injury, and awarded $395,767 in damages.
Case Summary: The Abrupt Demotion
The case involved Mr Gairns, a long-term internal sales supervisor for Pro Music Pty Ltd. Mr Gairns sued his employer for damages related to a psychiatric injury he suffered following a meeting with the managing director, Ian Corazzol, in February 2019.
The Critical Meeting
The incident occurred late on a Friday afternoon. Mr Corazzol telephoned Mr Gairns and requested he come to his office, without giving any warning or indication of the meeting's purpose.
During this unannounced meeting, Mr Corazzol told Mr Gairns that:
- He would no longer be the internal sales supervisor, effective the following Monday.
- His salary would be reduced by several thousand dollars.
- Mr Gairns was not provided with a job description for his new, demoted role.
Crucially, the meeting was held in an open-plan office setting, and the court accepted that Mr Corazzol raised his voice and told Mr Gairns there was nothing he could do about the decision, leaving the employee feeling "utterly stunned" and humiliated.
Employer's Knowledge of Vulnerability
The employer was well aware that Mr Gairns was an emotional person whose personality meant he could "quite easily" become stressed and anxious. In the weeks before the meeting, the managing director had even observed Mr Gairns to be visibly distressed, sobbing and hyperventilating, due to personal issues, and had delayed the demotion meeting as a result of this concern.
The Court’s Findings on Negligence
The key issue was whether the employer owed a duty of care to Mr Gairns in managing the demotion and whether they breached that duty.
Duty of Care Existed
The Court rejected the employer's argument that the demotion related to an inherent contractual right or disciplinary process (which can often shield employers from negligence claims). Instead, the judge found:
- The demotion was not part of a formal disciplinary process nor was Mr Gairns' performance shown to have warranted investigation.
- The manner in which the demotion was conducted fell within the ordinary course of employment and the general duty to provide a safe system of work.
- The employer's prior knowledge of Mr Gairns' emotional tendencies made the risk of him suffering a recognised psychiatric illness "real and not insignificant" if the demotion was handled poorly.
Breach of Duty and Failure to Take Reasonable Care
The Court found that a reasonable person in the employer's position would have easily taken obvious steps to avoid the foreseeable risk of injury, all of which the employer failed to do:
- Written Notice and Explanation: Provide Mr Gairns with proper written notice of the specific performance concerns that would justify demoting a long-term employee.
- Opportunity to Respond: Give Mr Gairns a proper opportunity to respond to the concerns before the meeting.
- Confidential Setting: Conduct the meeting in a confidential and calm manner (not in the open-plan office where co-workers could overhear) to avoid unnecessary humiliation.
The judge determined that the employer's approach was "inadequate and misguided" and that the demotion was conducted in such an unreasonable manner that it would likely have been very distressing for any employee, regardless of pre-existing vulnerability. The failure to take the first three of these precautions was deemed a necessary condition for the psychiatric injury.
The Injury and Causation
The psychiatric injury was diagnosed as an exacerbation of a pre-existing panic disorder (which resolved) and an ongoing aggravation of a pre-existing anxiety disorder. The Court also found that the increase in Mr Gairns' use of alcohol and cannabis was a "mal-adaptive coping strategy" for his anxiety, which was caused by the negligent demotion.
The Damages Award
The total judgment for Mr Gairns was $395,767.
The major components of the award included:
| Head of Damage | Award |
|---|---|
| Past Economic Loss (Loss of income to date) | $186,000 |
| Future Economic Loss (Inability to work full-time until retirement) | $130,000 |
| General Damages (Pain and suffering) | $4,350 |
| Past & Future Loss of Superannuation | $33,290 |
| Other Expenses and Interest | $42,127 |
| TOTAL | $395,767 |
The significant part of the award relates to the impact on Mr Gairns' earning capacity, as the Court accepted that his injury limited him to part-time work in a low-stress environment for the rest of his working life.
Key Takeaways for Employers and Employees
This case reinforces that employers have a legal duty to conduct management actions, including demotions and performance management, in a procedurally fair and psychologically safe manner.
| For Employers | For Employees |
|---|---|
| Act Reasonably: If a management decision (like demotion or disciplinary action) is not done reasonably, the employer loses the legal shield that would normally protect it from negligence claims. | Your Mental Health Matters: The law recognises psychiatric injuries, and distress or humiliation is compensable if it causes a recognised illness. |
| Be on Notice: If an employee shows evident signs of vulnerability or has a known history of anxiety or stress, the duty of care owed to them is heightened. | Foreseeability of Harm: Even if you don't have a known vulnerability, a very unreasonable or hostile action by a manager may still be considered negligent because it would foreseeably harm any employee. |
| Follow Procedure: Always provide written notice, a clear explanation of the concerns, and an opportunity for the employee to respond to the decision before a final demotion meeting. | The Manner Matters: The abruptness, the lack of warning, and the public/humiliating setting of a crucial meeting can be key factors in proving negligence. |
| Ensure Confidentiality: Sensitive employment discussions must be held in a way that cannot be overheard or seen by other staff, to prevent unnecessary humiliation. | Compensation is Possible: Damages can cover income lost in the past, future inability to work, and general compensation for pain and suffering. |
This is general information only and you should obtain professional advice relevant to your circumstances. If you need more information or if you need assistance or advice on how to proceed please call us on 07 5538 2766 or email jeff@dwyerlaw.com.au today.
Workplace sexual harassment and bullying are serious issues, and Australian law is clear that everyone has the right to a safe work environment. Recent court cases emphasise that our legal system is taking these issues very seriously, resulting in significant compensation for victims. This article breaks down what sexual harassment and bullying mean in the Australian workplace and provides insights from recent decisions on sexual harassment claims. The information is general only – if you’re experiencing issues in your workplace, we recommend seeking the assistance of an experienced lawyer for advice tailored to your circumstances. What is Sexual Harassment? In Australia, sexual harassment is unlawful under the Sex Discrimination Act 1984 (Cth) and state/territory anti-discrimination laws. Sexual harassment is unwelcome conduct of a sexual nature that a reasonable person would have anticipated could offend, humiliate, or intimidate the person being targeted. Sexual harassment does not need to be repeated behaviour – a single incident is enough. Examples of this unwelcome conduct can include: Physical Contact : Unwelcome touching, hugging, kissing, or deliberately brushing against someone. Verbal or Written Conduct : Sexually suggestive comments or jokes, intrusive questions about a person's private life, unwelcome requests for sexual favours, or sending sexually explicit messages, emails, or texts. Visual Conduct : Staring or leering, or displaying sexually explicit pictures or posters. Creating a Hostile Environment : Behaviour that makes the entire work environment uncomfortable or threatening in a sexual way, even if not directed at a specific person. What is Workplace Bullying? Workplace bullying is slightly different from sexual harassment. Bullying is defined under the Fair Work Act as when a person or group of people repeatedly and unreasonably behave towards a worker or group of workers, and that behaviour creates a risk to health and safety. While bullying is repeated and often involves actions that harm a person’s well-being, sexual harassment is specifically defined by its sexual nature and does not need to be repeated. However, some repeated forms of sexual harassment can also be considered bullying. Important Note : Reasonable management action carried out in a reasonable way - such as taking disciplinary action or managing poor performance - is not considered bullying. The Law in Action: Key Lessons from Recent Cases Recent decisions from Australian courts and tribunals highlight that serious workplace misconduct has severe consequences and that legal compensation is increasing to reflect the significant harm caused and evolving community standards. Case 1: Sexual Harassment and Victimisation by an Employer In the case of Magar v Khan [2025] FCA 874, an employee successfully sued her employer's director for sexual harassment and victimisation. The Conduct : The director engaged in a series of disturbing and explicitly sexual acts, known as the "Car Incidents”, including discussing sexual matters and involving sex toys, as well as humiliating and inappropriate comments about the employee's sex life (the "Hickey Incident"). The employee eventually stopped going to work due to the fear and psychological distress caused by the director's conduct. The Result : The Court was satisfied that the harassment had a profound impact on the victim, who was a young, vulnerable woman with existing mental health issues, and found the employer breached the law. The judge noted that threatening to sue the victim for defamation after she complained (victimisation) was a dangerous and wrongful attempt to stop her from pursuing her rights. The total compensation awarded was $305,000, comprising: General Damages for Harassment : $160,000. Compensation for Economic Loss : $130,000 for past and future inability to work due to her condition. Damages for Victimisation and Aggravation : $15,000, including for the improper way the defence was conducted at trial. Case 2: Sexual Harassment and Assault in a Small Business In JF v Oishi Teppanyaki & Café Pty Ltd & Anor [2025] QIRC 209, a restaurant employee, JF, successfully brought a complaint against her employer following a sexual assault incident. The Conduct : The employer first propositioned JF for sex and, upon her refusal, later subjected her to a violent and physically intimate sexual assault, even locking the doors of the restaurant to prevent her escape. The employer was later convicted of a criminal offence for the assault. The Result : The tribunal found the employer’s conduct was predatory and a serious violation of her rights, leading to a diagnosis of severe and chronic Post-Traumatic Stress Disorder (PTSD). The total compensation awarded was $150,000, comprising: General Damages : $140,000 for the ongoing pain, suffering, and the profound detrimental impact on her life. Aggravated Damages : $10,000 because the employer deliberately locked the doors to prevent her from leaving, which heightened her fear and sense of danger. Key Takeaways for Employees A Single Incident is Enough : You don't have to endure repeated bad behaviour for it to be considered sexual harassment. A single, serious instance can be grounds for a complaint. It's Unwelcome, Not Explicit : The law focuses on whether the conduct was unwelcome and sexual in nature, not whether it was intended to cause harm. Your Wellbeing is a Priority : The courts recognise that psychological injuries, like PTSD, anxiety, and depression, are a serious consequence of harassment and award compensation to cover these impacts and the inability to work. Victimisation is Also Unlawful : If you make a complaint, your employer or the alleged harasser cannot take action against you (like threatening legal action or firing you) in retaliation. This is known as victimisation and is a separate, unlawful act that can attract significant penalties and damages. Seeking Help is Vital : The law provides mechanisms to help you stop the harassment and seek compensation. Don't face it alone. Practical Steps to Take If you are experiencing or have witnessed sexual harassment or bullying, taking clear steps is important to protect yourself and your rights: Keep Records : Write down the details of every incident as soon as possible - what happened, when, where, and who was present. Keep copies of any relevant emails, messages, or documents. Speak Up : If you feel safe to do so, clearly tell the person their behaviour is unwelcome and ask them to stop. Use Internal Processes : Report the conduct to your supervisor, a manager, or the Human Resources (HR) department. Seek External Advice : Contact one of the following for free, confidential advice: The Australian Human Rights Commission (AHRC). The Fair Work Commission (FWC). Your relevant state or territory Anti-Discrimination or Equal Opportunity body. A lawyer who specialises in employment law or anti-discrimination matters. Remember : Australian law places a clear positive duty on employers to take proactive and meaningful action to prevent sexual harassment and other unlawful behaviours from occurring in the workplace. If they fail to do this, they may be liable. This is general information only and you should obtain professional advice relevant to your circumstances. If you need more information or if you need assistance or advice on how to proceed please call us on 07 5538 2766 or email jeff@dwyerlaw.com.au today.
Facing a total and permanent disability is life-altering, bringing about significant physical, emotional, and financial challenges. In such trying times, having total and permanent disability insurance and understanding your rights and entitlement to claim benefits can provide much-needed financial security for you and your family. This article provides general information only and you should obtain professional advice relevant to your circumstances. If you are considering making a total and permanent disability claim, we recommend seeking legal advice. A lawyer can help assess your eligibility, assist in gathering the necessary evidence, correctly file your claim, and negotiate with the insurer on your behalf. What is Total & Permanent Disability? Total and permanent disability (TPD) generally refers to a condition that prevents someone from returning to work or engaging in any gainful employment for which they are reasonably qualified by education, training, or experience. A TPD can arise from various illnesses and injuries, for example, serious medical conditions such as cancer, heart disease, or mental health disorders; and severe accidents resulting in permanent impairment, such as spinal cord injuries or traumatic brain injuries. In Australia, TPD insurance is generally obtained through: Superannuation: many superannuation funds include a TPD insurance compon ent as part of their default cover. Private insurance: individuals can purchase standalone TPD insurance policies from private insurers. TPD insurance provides a lump sum payment if you can no longer work in your usual occupation or other type of employment, based on your qualifications, experience, and training. It is important to carefully review the policy documents to understand the specific eligibility requirements and any exclusions that may apply. Note also, that TPD cover through your superannuation fund can potentially end if you change funds, stop making contributions to your superannuation, or reach a certain age. Eligibility for TPD Benefits The eligibility criteria for TPD benefits can vary depending on the specific insurance policy or superannuation fund. However, some general requirements typically apply: Definition of TPD: th e policy document will define what constitutes TPD, often including conditions like being unable to work in your occupation or any occupation for which you are reasonably suited. Waiting period: most policies have a waiting period (for example, six months) during which you must be continuously disabled before you can make a claim. Medical evidence: you will need to provide comprehensive medical evidence from your treating doctors to support your claim. The TPD Claim Process Navigating a TPD claim can be complex and time-consuming. The general process is as follows: Notify your insurer or superannuation fund: inform them of your intention to make a TPD claim as soon as possible. Gather supporting documentation: this includes medical reports, employment history, and any other relevant evidence. Complete the claim form: fill out the claim form accurately and comprehensively, providing all the requested information. Assessment of your claim: the insurer or superannuation fund will assess your claim, which may result in requests for further medical examinations or interviews. Decision: you will receive a decision on your claim, which can either be approved, denied, or require further information. Tips for a Successful TPD Claim While the TPD claim process can be daunting, following these tips can increase your chances of a successful outcome: Seek professional advice: a compensation lawyer specialising in TPD claims can help guide you through the process, ensure you meet the procedural requirements, and advocate on your behalf. Be organised: keep all your documents and correspondence related to your claim in one place for easy access - you might consider asking a trusted family member or friend to assist with this. Be thorough: provide as much detail and evidence as possible to support your claim. Be patient: the assessment process can take time, so be patient and persistent. Don't give up: if your claim is denied, you may have the right to appeal the decision. If you haven’t already, seek professional advice to explore your options. How a Compensation Lawyer Can Help A compensation lawyer with expertise in TPD claims can be invaluable throughout the process of making your TPD claim. Your lawyer can: Assess eligibility: review your po licy and medical evidence to determine your eligibility for TPD benefits. Gather evidence: assist in collecting and organising all necessary documentation to support your claim. Lawyers generally have a network of medical and other professionals who can be retained to assist with preparing evidence. Liaise with the insurer: this can be particularly helpful given the insured person will often be facing a traumatic and difficult period. Your lawyer can communicate with the insurer or superannuation fund on your behalf, ensuring your rights are protected and that the correct documents are lodged within any specific timeframes. Negotiate a fair settlement: if your claim is approved, your lawyer can assess it to ensure it reflects the full extent of your disability and its impact on your future earning capacity. Represent you at the Australian Financial Complaints Authority (AFCA): The AFCA helps resolve disputes between consumers, insurers and superannuation funds about products such as TPD insurance. Your lawyer can help lodge complaints about delays in processing claims, the calculation of entitlements under a policy, and an insurer’s denial to pay a claim. Represent you in court , if necessary. Conclusion Claiming total and permanent disability benefits can be a complex and emotionally challenging process. Understanding your rights, eligibility criteria, and the steps involved is crucial to securing your financial future. Seeking professional advice from a personal injury lawyer can strengthen your chances of a successful claim. This is general information only and you should obtain professional advice relevant to your circumstances. If you need more information or if you need assistance or advice on how to proceed please call us on 07 5538 2766 or email jeff@dwyerlaw.com.au today.
Navigating work cover for Gold Coast, QLD can feel overwhelming, particularly when you’re facing an injury or a dispute with your employer or insurer. At Dwyer Law Group, based in Bundall, QLD, we guide clients across the Gold Coast to understand their rights and maximise their entitlements. Call us today on 07 5538 2766 to discuss your case and get the support you need from the very start. Understanding the complexities of work cover for Gold Coast, QLD is essential to ensure your claim is properly managed. A skilled lawyer can help you navigate paperwork, communicate with insurers, and advocate for your best interests throughout the process. With Dwyer Law Group by your side, you can approach your work cover claim with confidence and clarity, knowing that every step is handled with care and precision. In this article, we outline five things to expect when engaging a lawyer for your work cover claim. Understanding Work Cover for Gold Coast, QLD Work cover for Gold Coast, QLD is designed to provide compensation to employees who suffer a work-related injury or illness. While the process is regulated under Queensland legislation, claims can become complex when disputes arise or when your claim is denied. This is where a work cover lawyer for Gold Coast, QLD steps in. A lawyer can guide you through the legal framework, help prepare your claim, and advocate on your behalf during disputes or appeals. Engaging legal support early ensures that your rights are protected and that you receive the maximum compensation available. 1. Detailed Case Assessment One of the first things you can expect from a work cover lawyer for Gold Coast, QLD is a thorough assessment of your case. At Dwyer Law Group, we review medical reports, injury details, and employment history to determine your eligibility for compensation. A lawyer will also identify potential challenges in your claim, such as gaps in documentation or discrepancies in medical evidence. This step is crucial in work cover for Gold Coast, QLD claims, as it helps you gauge the likelihood of success and equips you for the challenges ahead in the entire claims process. 2. Guidance Through Documentation and Forms The paperwork involved in work cover for Gold Coast, QLD can be overwhelming. Lawyers assist clients in completing forms accurately and submitting evidence in compliance with the relevant regulations. From medical certificates to employer reports, every document must meet strict guidelines. A work cover lawyer for Gold Coast, QLD ensures that nothing is overlooked, reducing delays and minimising the risk of claim rejection. This meticulous approach is especially important for appeals, where procedural errors can affect the outcome. 3. Representation in Disputes or Appeals Disputes are common in work cover claims, whether over the extent of injury, weekly benefits, or return-to-work obligations. A lawyer can represent you in discussions with insurers or at hearings before the Queensland Industrial Relations Commission. At Dwyer Law Group, we support clients in presenting evidence clearly and negotiating for fair outcomes. Our role is to advocate for your rights, so you feel supported throughout the process. This is essential for anyone seeking work cover for Gold Coast, QLD, as the system can be complex and challenging to navigate alone. 4. Explaining Your Legal Options Every work cover case is unique, and a lawyer will clarify all available legal avenues. Whether it’s negotiating a settlement, pursuing an appeal, or resolving disputes through mediation, understanding your options is critical. A work cover lawyer for Gold Coast, QLD will explain the benefits and potential risks of each option. This transparency allows you to make informed decisions, giving you confidence that your case is being handled strategically and in your best interests. 5. Ongoing Support and Communication Effective communication is a hallmark of a professional legal service. A lawyer will keep you updated on the progress of your claim, respond to questions, and provide guidance whenever challenges arise. At Dwyer Law Group, we pride ourselves on being accessible to clients across the Gold Coast, QLD. You can reach us directly at 07 5538 2766 , and we ensure that every client understands each step of the work cover for Gold Coast, QLD process.
Injured? Speak with a car accident lawyer in Gold Coast today. Call 07 5538 2766. Dwyer Law Group offers fast, expert legal support.
Injured at work in Gold Coast? A work accident lawyer can help you claim compensation. Call Dwyer Law Group today at (07) 5538-2766.
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Welcome to the June edition of the Dwyer Law Group newsletter. A newsletter for clients, friends of the practice and special interest groups. This is a free service and in this edition we have some topical articles written in a helpful, no-nonsense style with plenty of practical suggestions. We hope you enjoy the articles.
Welcome to the December edition of the Dwyer Law Group newsletter. A newsletter for clients, friends of the practice and special interest groups. This is a free service and in this edition we have some topical articles written in a helpful, no-nonsense style with plenty of practical suggestions. We hope you enjoy the articles.
