
Employee Awarded 1.4 million in Damages following High Court Ruling
- Performance Management
- LMHR Team
In a landmark decision in December 2024, the High Court ruled that an employee who suffered psychiatric injury due to an employer’s failure to follow a disciplinary process in their policy (leading to termination) was entitled to 1.4 million in damages, due to breach of contract.
The employer involved (Vision Australia) had a term in their contract of employment that incorporated provisions which specified that the employee would comply with Vision Australia’s policies and procedures. Specifically, it stated:
“In addition, employment conditions will be in accordance with regulatory requirements and Vision Australia’s policies and procedures. Breach of policies and procedures may result in disciplinary action”.
The decision found that a psychiatric injury is considered a class of personal injury, thereby giving access to recoverable damages for breach of contract. Historically this was not the case.
This case has highlighted some key learnings for employers:
- Be very clear what provisions are incorporated into a contract of employment. A review of your existing employment contract templates is recommended.
- If you do have policies and procedures in place related to disciplinary procedures and termination, ensure all managers have been trained in these policies and follow them.
- Ensure procedural fairness in accordance with the requirements of the Fair Work Act (2009) before terminating any employees. Seek advice if necessary.
More Posts

- Performance Management
- LMHR Team