Cutting Costs Can Cost You More: The Cautionary Tale of Roussety v Castricum Brothers


By Ruth Collins, Lawyer 

The recent Victorian case of Roussety v Castricum Brothers[1] should caution employers that  an employer owes a duty to take reasonable care to avoid any foreseeable risk of injury arising from an employee’s circumstances of employment. In particular, it warns of the dangers of cost cutting without having regard to the effect on existing employees.

What Happened?

Mr Roussety was a long term employee of Castricum Brothers. In 2004 he was promoted to manager of the rendering plant. He agreed to long hours and be on call 24 hours a day, seven days a week.

However, following a big reduction in staff numbers, including the full-time maintenance manager, the conditions of the rendering plant, and the conditions of Roussety’s employment deteriorated drastically.

Roussety gave evidence that he was required to work in excess of 55, and up to 91 hours a week and that he was required to remain on-call at all times, including during his honeymoon in Mauritius. The additional stress and the pressure led to insomnia and cumulated in Roussety fainting at work in February 2007, followed by extended absences from his role.

A number of employees observed a significant change in Roussety’s demeanour from being ‘always happy’ and ‘a good bloke’ to becoming stressed, tired and ‘on edge’. Even senior management conceded a significant change in Roussety’s character during his time as manager.

In July 2007 senior management required Roussety to stay at work even though he had worked extensive hours the previous weekend. Roussety was later found by the Nurse on the floor of the rendering plant complaining of chest pains. Roussety did not return to work after this, and was subsequently made redundant.

Roussety alleged that these conditions resulted in him developing a psychiatric injury, including major depression.

Was there a Foreseeable Risk of Psychiatric Injury to Roussety?

The Court accepted Roussety’s evidence that he reported problems of staffing and maintenance; that he requested a break from being on call 24 hours a day; that he complained to senior management about work related stress; and that he presented as withdrawn to colleagues.

Consequently the Court accepted that the senior management were ‘on notice’ that Roussety was at risk of psychiatric injury after his first collapse at work.

What was the Employer’s Duty of Care?

In the circumstances of a reasonably foreseeable risk of Roussety developing a psychiatric illness due to his workload, the Court held that a ‘reasonable person’ would have taken steps to minimise the risk, including:

  1. modify his workload;
  2. reduce or remove his on-call duties;
  3. monitor the hours he was required to work;
  4. increase the staff at the rendering plant; and
  5. provide him with support and direct that he take any sick leave he required or time off work if he had worked particularly long hours.

Did the Employer Breach its Duty of Care?

The Judge said Castricum Brother’s lack of response “beggars belief.” In response to Roussety’s complaints the Operations Manager conceded that she had grown tired of his complaints and that she had taken them with a “grain of salt”; in response to Roussety fainting she conceded that she had “reservations” about the “alleged collapse”; and following Roussety’s absence from work senior management did not enquire about his welfare, nor did they make any meaningful changes to his working hours.

Not surprisingly, the Court found that Castricum Brothers had breached its duty of care by: a) not putting in place measures to prevent him from working excessive hours from February 2007 onwards; and b) telling him to keep working on July 2007.

A Cautionary Tale

Damages are yet to be determined in this matter. However, it is evident that Castricum Brothers’ short sighted cost cutting measures will cost them in the long run, not least in significant Supreme Court legal expenses. Castricum Brothers could have avoided legal fees and future damages had it implemented proper employee management.

This case highlights that employers need to monitor the effects of workplace structural changes and workloads. Proper policies, procedures and training for management and supervisory personnel is also key.

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 [1] Joseph Roussety v Castricum Brothers Pty Ltd [2016] VSC 466.

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