Record General Protections Claim

In one of the biggest compensation payments for a general protection claims to date, the Hawkesbury Race Club (“the Club”) has been ordered to make a $2.8 million dollar payout to a long-serving manager, Vivienne Leggett (“Mrs Leggett”), who had her life “effectively destroyed” by a new CEO, Greg Rudolf (“Mr Rudolf”).

Background

In May 2016, Mr Rudolf was appointed as CEO and from the outset demonstrated an “overbearing micromanagement style”, in which he “interrogated” Mrs Leggett’s professional decisions, publicly belittled her, and took offence to the fact that she was earning the same remuneration as him.

Confrontations persisted until she complained in writing to Mr Rudolph on 9 October 2016 about the situation. In response, Mr Rudolph replied the following day with, “Please meet me in my office…to discuss your work performance“. Mr Rudolph’s reply made Mrs Leggett feel even more distressed and she commenced taking sick leave.

While Mrs Leggett was on sick leave, the Club did not display any concern for her welfare, and they made the decision to withhold her commissions. As a result, she terminated her employment in March 2017 by accepting the club’s repudiation of her contract by way of its failure to perform its obligations under her contract of employment in not paying her commissions.

Proceedings

Proceedings commenced in the Federal Court of Australia in 2019 for compensation under the Fair Work Act 2009 (Cth) and the Workers Compensation Act 1987 (NSW), in which she asserted that:

• Mr Rudolph issuing the 10 October Email and causing the club to withhold her entitlements constituted adverse action under the FW Act (“the General Protections Claims“).

• She was entitled to damages for the Club’s breach of contract in repudiating the employment agreement (“the Breach of Contract claim“); and

• The Club had been negligent in failing to protect her from the risk of psychiatric injury (“the Negligence Claim“).

The Outcome

In December of 2020, Justice Rares (“Rares J“) of the Federal Court of Australia found that the Club was liable to Ms Leggett for ongoing bullying and harassment, resulting in a significant depressive disorder which left her unable to work.

General Protections Claims

Rares J found that the Club failed to prove that Mr Rudolph had engaged in the adverse action for any reason other than that Mrs Leggett had exercised her workplace rights, being the right to make a complaint with respect to her employment and the right to take sick leave.

Breach of Contract Claim

Rares J agreed that, in withholding Mrs Leggett’s commissions with no reason other than providing that they would be “sorted out in due course“, the Club evinced a clear intention to not be bound by the contract, which constituted a repudiation of the contract.

Negligence Claim

Rares J held that the Club was liable in negligence and in breach of its obligation to take reasonable care to prevent its employee from suffering a reasonably foreseeable risk of psychiatric injury.

As a result, the $2.8 million dollar figure awarded to Mrs Leggett was made up of: $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, $869,745 in future economic loss, plus penalties and costs.

Takeaway

This case serves as a cautionary tale for employers, that when faced with allegations of bullying, you must take these matters seriously. Furthermore, employers must be proactively monitoring and responding to the risks to mental health to which bullying can expose its employees. The consequences of failing to do so are clear in this matter with a substantial $2.8 million penalty imposed against the Club.

If you have received complaints of bullying in your workplace and want to know how to proceed or think that you have experienced bullying against yourself personally in the workplace, please do not hesitate to contact Nick Stevens, Peter Hindeleh, Daphne Klianis or Josh Hoggett.

Leggett v Hawkesbury Race Club Limited (No 3) [2021] FCA 1658 and Leggett v Hawkesbury Race Club Limited (No 4) [2022] FCA 622