In today's increasingly demanding workplaces, employers face difficult decisions about balancing performance expectations with their legal obligation to safeguard employee wellbeing. A significant Queensland Supreme Court decision provides an important reminder that performance management, however legitimate in principle, must always be exercised in light of the circumstances confronting the employee.
In Ackers v Cairns Regional Council [2021] QSC 342, Henry J considered the claim of Paul Andrew Ackers, a payroll supervisor employed by Cairns Regional Council. Mr Ackers had been recruited to improve both staffing and payroll systems within the organisation. However, following the departure of several experienced employees, he found himself carrying an increasingly unsustainable workload. He worked excessive hours attempting to keep the payroll system functioning while simultaneously dealing with the inevitable errors that arose under such pressure.
Rather than addressing the underlying causes of these problems, the Council implemented a Performance Improvement Action Plan. Although performance management is ordinarily a legitimate management tool, the court emphasised that its use cannot be considered in isolation from the surrounding circumstances. By this stage, there was ample evidence that Mr Ackers was exhibiting obvious signs of psychological distress. These warning signs were known within the organisation. Despite that knowledge, the formal performance process continued. Mr Ackers subsequently developed a major depressive disorder and was ultimately unable to return to work.
One of the most significant aspects of the judgment concerns the scope of an employer's duty of care. Employers must take reasonable steps to avoid exposing employees to a foreseeable risk of psychiatric injury. Importantly, foreseeability is not confined to what any one manager personally observes. Organisations accumulate what is often described as "corporate knowledge" through supervisors, human resources personnel, managers, workplace records, complaints, absenteeism, and other information held collectively by the employer. Where that accumulated knowledge reveals an employee is under exceptional pressure or displaying obvious signs of deteriorating mental health, the employer cannot simply proceed with business as usual.
Henry J concluded that Cairns Regional Council possessed sufficient knowledge of Mr Ackers' excessive workload and deteriorating psychological condition to appreciate that continuing the performance management process carried a foreseeable risk of psychiatric injury. The Council nevertheless persisted with that course without adequately addressing the underlying workplace conditions. In doing so, it breached its duty of care. The court found that the breach materially contributed to Mr Ackers' psychiatric illness and awarded damages exceeding $1.1 million.
The significance of Ackers extends well beyond its substantial damages award. The decision reinforces that workplace mental health cannot be treated as secondary to organisational efficiency or procedural compliance. Performance management is not rendered unlawful simply because an employee experiences stress, nor does every stressful workplace give rise to legal liability. Rather, liability arises where an employer knows, or ought reasonably to know, that workplace demands or management practices are creating a foreseeable risk of psychiatric injury, yet fails to take reasonable steps to reduce that risk.
The principles identified in Ackers also have wider significance for modern workplaces. Unrealistic workloads, prolonged periods of excessive pressure, repeated criticism without meaningful support, or formal disciplinary processes pursued despite clear evidence of psychological deterioration may, depending upon the circumstances, contribute to a breach of an employer's duty of care. Each case necessarily turns on its own facts, but the underlying legal principle is clear: management decisions cannot be divorced from their foreseeable human consequences.
The decision also reflects a broader evolution in employment law. Psychological health is increasingly recognised as deserving the same practical protection as physical safety. Just as employers are expected to address obvious physical hazards, they are likewise expected to respond reasonably when warning signs of mental harm become apparent. Effective leadership therefore requires more than adherence to procedure. It demands judgment, proportionality, and genuine attention to employee welfare.
The decision also illustrates that management responses should address the underlying causes of perceived performance deficiencies. Where excessive workload, inadequate staffing, or organisational failures materially contribute to an employee's difficulties, focusing solely on the employee's performance while disregarding those contributing factors may itself expose an employer to legal risk.
Ackers stands as an important reminder that organisational success is not measured solely by productivity or compliance with internal processes. It is equally measured by an employer's willingness to recognise when workplace pressures have become unreasonable and to respond before preventable psychological harm occurs. In an era where burnout, anxiety, and work-related mental illness are increasingly prevalent, the judgment offers both a legal lesson and a practical one: good management begins with recognising that people, not merely performance metrics, remain at the heart of every workplace.
As with all negligence cases, outcomes depend upon the particular facts. Nevertheless, Ackers provides valuable guidance for employers, managers, and employees alike. It reinforces that the law does not expect perfection, but it does expect reasonable care. Where warning signs are ignored and preventable harm follows, accountability may extend well beyond the workplace itself.