By Gaby Grammeno Contributor

A court has ruled in favour of a former Telstra employee who sued the company, claiming its breach of her employment contract caused her to suffer a psychological injury.

The worker was employed in the role of Emergency Customer Service Operator (ECSO). Her main duties consisted of answering and handling triple-zero calls.

Every two years all the ECSOs were required to undergo audiometric testing to check that their hearing fell within the thresholds specified by the relevant Telstra policy.

In August 2012 audiometry showed the worker had mild to moderate high frequency hearing loss, which put her outside the specified thresholds, but further testing indicated that she could continue to work as an ECSO using a binaural headset.

By about December 2017, however, management formed the view that she was not complying with certain key performance indicators relevant to her role as an ECSO, and that she was mishandling calls. 

She was placed on a number of ‘performance support plans’ (in November 2018, March 2019, June 2019, and September 2019) and she was issued with two written warnings for unsatisfactory performance, in March and June 2019.

In September 2019 she underwent further audiometry, the results of which were referred to an occupational physician, who provided reports to her manager.

On the basis of these reports, the manager understood that the worker did not meet the guidelines and was not fit to perform her role as an ECSO. On 7 November 2019, the worker was told she was not permitted to attend work. She was required to take sick leave, and when she objected, she was told her absence would be treated as discretionary compassionate leave.

This was paid until 14 February 2020, when the worker commenced proceedings against Telstra, alleging she’d been treated unreasonably and this caused her a psychological injury. She claimed the company had breached implied terms of her employment contract, including a duty to co-operate and act in good faith towards her and only issue lawful, reasonable directions.

Following a further medical assessment, she was told she was fit to return to her role as an ECSO; and on 26 June 2020 Telstra, without admissions, paid her an amount equivalent to her base salary for the period from 14 February 2020 to 12 June 2020, and personal leave she’d taken in that period.

However, she never returned to work, and provided Telstra with medical certificates saying she had a medical condition and was unfit for work.

In these circumstances, the worker claimed that in directing her to take sick leave when she was not sick or injured, and by not paying her wages from February 2020, Telstra contravened its enterprise agreement and in doing so, contravened s 50 of the Fair Work Act 2009. She also claimed that Telstra had breached implied terms of her contract of employment and unlawfully discriminated against her, contrary to s 5(1) and s 15(2)(d) of the Disability Discrimination Act 1992.

The case was heard in the Federal Circuit and Family Court of Australia.

 

In court

Telstra denied it engaged in any unlawful conduct, submitting that its conduct towards the worker was motivated by its desire to ensure that she was fit to perform the work of an ECSO.

Judge Nicholas Manousaridis heard that she’d failed to consistently meet the requirements of the role over a period of nearly two years, with numerous breaches of the competencies set out in the company’s KPIs for staff. She was also mishandling some calls, which can have life-threatening consequences for callers to the triple-zero number.

The worker’s evidence was that under common law the company had no right to suspend her without pay. After having worked there for 30 years, she was distressed and anxious about being removed from her job and any prospect of returning. She was losing sleep, would wake up ruminating about how she’d been treated, and was worried about the financial consequences of her situation.

In October 2021 a psychiatrist’s assessment commissioned by Telstra provided the opinion that she suffered from a ‘persistent depressive disorder’ and had done so since she left work almost two years earlier.

The Court’s task was to determine whether the employer contravened provisions of the relevant enterprise agreement by not paying the worker wages while she was suspended, whether the employer unlawfully discriminated against her on the grounds of her disability, and whether she suffered a psychiatric injury as a consequence of being suspended. 

On considering the evidence, Judge Manousaridis formed the view that in telling the worker she was not permitted to attend work until she was cleared to perform the work (the ‘Purported Direction’) and suspending her without pay, Telstra had repudiated its obligations under the worker’s contract of employment.

He accepted the psychiatrist’s opinion that from 7 November 2019 the worker had suffered from persistent depressive disorder. He was satisfied that the Purported Direction was a materially contributing factor to her acquiring the disorder, and that as a consequence she was no longer fit to work as an ECSO. 

The Court found that Telstra’s breach of the employment contract had caused the worker to suffer a psychiatric injury which incapacitated her from working.

However, the worker failed in her claim that Telstra had discriminated against her on the basis of her disability, because the reasons her manager gave for deciding on her actions did not refer to the worker’s disability, but to the perception of her inability to perform the role of an ECSO, considering the medical evidence, her declining performance and the calls she’d mishandled.

Judge Manousaridis ruled that she is entitled to damages for lost wages and general damages of $30,000. 

 

What it means for employers

Employers should thoroughly check the provisions and implied terms of relevant contracts of employment, as well as enterprise bargaining agreements and the provisions of the Fair Work Act 2009, before deciding to take action such as suspending a worker without pay.

 

Read the judgment

Martin v Telstra Corporation Ltd (No 2) [2024] FedCFamC2G 1174 (8 November 2024)