Vision Australia will have to pay almost AU$1.5m to a former employee, for terminating him after a “sham” disciplinary hearing, in a case that has gone all the way to the High Court of Australia.
The High Court confirmed that former employee, Adam Elisha, is entitled to the payout in damages for a psychiatric injury caused by his unfair dismissal.
Vision Australia must also pay costs.
The case arose after allegations that Mr Elisha was “aggressive and intimidating” towards a hotel owner during a work trip in 2015. He denied the allegations during a disciplinary meeting. However, Vision Australia terminated his employment later that day, basing its decision on a “pattern of aggression”.
Mr Elisha wasn’t given any notice or opportunity to respond to the allegation of a history of aggression and wasn’t told about the role of that allegation in the decision to terminate his employment.
Unfair Dismissal Proceedings
Mr Elisha commenced unfair dismissal proceedings in the Fair Work Commission and Vision Australia agreed to pay him just over AU$27,000 – the maximum amount in respect to an unfair dismissal proceeding.
After his dismissal, Mr Elisha was diagnosed with major depressive disorder and adjustment disorder with depressive mood, leaving him unable to work.
He lodged proceedings in the Supreme Court of Victoria, saying his termination had been “catastrophic”.
The primary judge held that Vision Australia’s actions contributed “very significantly to the disturbance of [Mr Elisha’s] mind and, consequently… chronic psychiatric illness”.
That Supreme Court judge ruled in favour of Mr Elisha, describing the disciplinary process adopted by Vision Australia as “nothing short of a sham and a disgrace”, noting there were “secret slurs” against Mr Elisha, that he did not have the opportunity to address.
Vision Australia was ordered to pay damages of $1,442,404.50.
On appeal to the Court of Appeal, Vision Australia was found to have breached the contract by failing to follow due process. But the Court of Appeal ruled that damages for psychiatric injury were not available to Mr Elisha, because the psychiatric injury was “too remote” from the contract breach.
the case gives rise to increased risks for employers for not following a procedurally fair process in cases of dismissal
The High Court Case
Mr Elisha subsequently appealed to the High Court, which agreed with the initial judge’s findings. It found the contract was breached. It also confirmed that a psychiatric injury is a type of injury for which damages can be recovered in breach of contract claims.
The ruling means that Vision Australia has to pay the almost $1.5m for damages for psychiatric injury plus costs.
As a ruling of the High Court, the case gives rise to increased risks for employers for not following a procedurally fair process in cases of dismissal: breaching an employee’s contract may give rise to a significant award for damages, if it results in a psychiatric injury.
Reference
- Elisha v Vision Australia Limited [2024] HCA 50, available at: eresources.hcourt.gov.au/showCase/2024/HCA/50 [accessed Feb 2025].
