LEGAL - Nikolich v Goldman Sachs J B Were Services Pty Ltd [2007]FCAFC 120

On 7 August 2007 the Full Court of the Federal Court of Australia handed down its decision in Nikolich v Goldman Sachs J B Were Services Pty Ltd [2007]FCAFC 120. By a majority of 2:1 the Full Court upheld the decision of Justice Wilcox at first instance to order Goldman Sachs J B Were Services Pty Ltd (Goldman Sachs ) to pay $515,869 in damages to a former employee, Peter Nikolich.

Nikolich experienced Workplace Bullying, it was found that his employer failed to follow its own written policy on Workplace Bullying.

When Peter Nikolich commenced employment, he was given a written policy of 119 pages called ‘Working with Us’ which contained the employer’s policies on harassment, health and safety and the process for handling grievances.

After a few months of employment, Mr Nikolich experienced bullying behaviour from his direct manager. Mr Nikolich reported the behaviour to the HR Department as “extremely intimidating and threatening” and as a result he was depressed and suicidal.

The complaint was not handled properly and as a result MR Nikolich became more anxious and depressed and needed to access his sick leave. His employer terminated him.

Mr Nikolich began proceedings at the Federal Court, which held that the company’s written policy, stipulated that specific entitlements would be granted in the case of Workplace Bullying and Harassment. The court went on to say:

‘It is clear that [the employer] was concerned to insist that all its employees…would comply with those behavioural standards which it trumpeted as reflecting the firm’s values and culture. It provided mechanisms…for resolving problems, including satisfaction of grievances. It made promises about supporting staff, including (relevantly) ‘anyone who makes a genuine complaint’.

The Federal Court held that the employer, breached its contract by failing to adhere to its own policies on Bullying in the workplace.

On the facts of the case, the Court held that the employer had breached its contract with Mr Nikolich by failing to follow its policies on health and safety, harassment and grievance procedures.

Mr Nikolich was awarded $80,000 for his psychological injury and $435,000 for the two and a half years during which he had been and would be unable to return to work.

Bullying is a serious occupational health and safety issue as it creates a risk of harm to an employee’s mental health. Employers have a duty to protect employees from bullying and harassment by their coworkers. The duty extends to all employees including locums, casuals and agency staff. It may even extend to employees who work “off-site”. It is important for medical practices to have a written policy on bullying and harassment that defines unacceptable conduct. Staff should be made aware of the policy and it must be applied equally and consistently. Any complaint should be investigated promptly with appropriate action taken. Failure to do so may expose the practice to a substantial claim for damages.

Mr Nikolich was awarded $80,000 for his psychological injury and $435,000 for the two and a half years during which he had been and would be unable to return to work.