Mind Over Matter: Landmark Ruling Links Contract Breach to Mental Health Damages

Over 2 days, we filmed Adam Elisha in a small studio in Melbourne. For the very first time, he shares exclusively in the Shattered Documentary his monumental battle against his employer, Vision Australia. Adam reveals how this nightmare began, the years-long legal battles that ensued, and the consequences for his health as events unfolded.

Perhaps the most significant personal insight about Adam was his sheer tenacity - a quiet determination to hold his employer accountable for their actions and to eventually expose WorkSafe's handling of his case in his separate quest for medical expenses and weekly wages. This was an issue the insurers couldn't resolve in a simple letter, ultimately requiring him to take the matter to the Magistrate's Court of Victoria.

This remarkable story encompasses being ill, being entrapped within WorkSafe's Workers' Compensation system, and simultaneously, once his impairment was known, taking his employer to court for damages and negligence.

Despite these complications, his case concluded with a mixed outcome. At the High Court, he won on contract law - indeed, changed contract law - but lost on the duty of care action. The court found that employers owe no duty of care to employees and, in turn, their injured workers. Under these laws, they have considerable discretion in their actions.

In the annals of Australian legal history, some cases stand out not just for their outcomes but for their profound impact on the evolution of law itself. The case of Elisha v Vision Australia Ltd is one such landmark decision, where a single individual's pursuit of justice led to the overturning of a 115-year-old legal precedent that had long denied workers their full rights under contract law.

A Career Shattered

Adam Elisha's story begins innocuously enough - with a family holiday to Vietnam in 2015. After nearly nine years of dedicated service at Vision Australia, he returned to work expecting business as usual and refreshed from his holiday. Instead, he walked into a nightmare. Without warning, he was stood down based on allegations that would later be revealed as completely fabricated by his employer. The final blow came swiftly and impersonally - a termination email from an organization he had once considered "family."

Background - The Incident

In March 2015, a workplace incident involving Mr Elisha, then employed by Vision Australia Ltd (Vision Australia), occurred during a business trip. The hotel owner where Mr Elisha was staying reported that he had behaved aggressively and intimidatingly after expressing dissatisfaction with his accommodations late one evening. In response, Vision Australia suspended Mr Elisha and launched an investigation, which they pledged would adhere to their established disciplinary procedures and enterprise agreement - frameworks that mandated specific requirements for due process and procedural fairness.

Although Mr Elisha was allowed to present his version of events, Vision Australia had already found the hotel owner's account more credible. Their decision was partially influenced by what they characterized as Mr Elisha's "pattern of aggression" throughout his employment, despite there never being any aggression. Crucially, these historical allegations were never presented to Mr Elisha during the investigation or show-cause process, denying him the opportunity to address them. Based on their findings, Vision Australia terminated his employment immediately for serious misconduct.

Initially, Mr Elisha pursued an unfair dismissal claim through the Fair Work Commission. This matter concluded with a settlement of $27,248.68, representing the maximum compensation available through the Commission's unfair dismissal framework at that time. The parties formalized this agreement through a settlement deed that included a release clause covering "employment, proceedings and the termination."

However, approximately five years later, Mr Elisha initiated new legal action against Vision Australia. This time, he alleged that the company had both breached his employment contract and acted negligently in conducting the show cause process, claiming these actions resulted in substantial psychiatric harm.

The Battle Begins

What should have been a straightforward case of contract breach turned into a David versus Goliath battle against not just his former employer, but the entire system. The Victorian Workcover Authority (VWA) chose to defend Vision Australia's conduct vigorously, despite the clear injustice of the situation. They maintained that the investigation into Elisha's alleged "misconduct" was fair and the termination justified.

The judge's assessment painted a starkly different picture. In a scathing judgment, the investigation was declared a "sham and a disgrace" and the process "unfair, unjust and wholly unreasonable." Yet, despite this clear vindication, an antiquated legal precedent stood in the way of full justice.

Settlement Deed's Limited Scope

The initial legal defense mounted by Vision Australia - that Mr Elisha's signed release should prevent further legal action - was unsuccessful due to precise wording in the settlement agreement. The critical element was the word "and" in the release clause, which specifically covered "employment, proceedings and termination." The court interpreted this language as restricting the release solely to matters connected with the unfair dismissal case. Since Mr Elisha's subsequent claims regarding contract breach and negligence fell outside this narrow scope, the court determined he retained the right to pursue these additional legal remedies.

Contractual Breach Through Policy Violation

Vision Australia's employment contract with Mr Elisha explicitly stated that his employment would be governed by company policies and procedures, with potential disciplinary consequences for violations. Significantly, the contract lacked any clause excluding these policies from being incorporated into the employment agreement. The High Court determined that the mandatory and promissory language used in the policy clause effectively incorporated Vision Australia's disciplinary procedures into the employment contract. By failing to follow their own disciplinary protocol in Mr Elisha's dismissal, Vision Australia breached these incorporated contractual terms.

Shattered Executive Producer, Kathie Melocco and Adam Elisha meet for coffee and share their stories. It was a very healing meeting for both.

Compensation for Psychiatric Injury

The High Court's ruling marked a significant shift in employment law by establishing that psychiatric injuries qualify as compensable physical or personal injuries in contract breach claims. This overturned previous legal precedent that had denied such compensation. The Court found that psychiatric damages were not too remote from the contractual breach to be recoverable, thus upholding the substantial damages award of approximately $1.5 million at trial.

Breaking a Century-Old Barrier

At the heart of this legal battle lay an obscure 1909 UK case - Addis v Gramophone. For over a century, this precedent had prevented workers from claiming damages that flowed from a breach of contract. It was a relic of a bygone era, yet it continued to deny justice to modern workers facing workplace trauma.

The fact that such a clear-cut case had to reach the High Court of Australia speaks volumes about the system's resistance to change. As Elisha notes, "It's amazing to me that such an obvious cause of action had to go to the high court... and that little old me had to be the one to bring Australian contract law into the 21st century."

The Price of Justice

The VWA's strategy of "deny, delay, depose" proved costly - not just in human terms, but financially. What could have been settled for hundreds of thousands in 2020 eventually cost the state of Victoria millions. More importantly, it led to a landmark decision that finally overturned the outdated Addis v Gramophone precedent, opening new avenues for justice for future claimants.

The Bitter Aftermath

While the legal victory is significant, it came at a devastating personal cost. As Elisha poignantly notes, those responsible for the "disgraceful conduct" have moved on to "bigger and better things without any remorse," while his life was left in shambles. The mental health toll of such protracted legal battles cannot be understated.

A Legacy of Change

Yet, from this personal tragedy emerged a profound change in Australian law. The Elisha case serves as a powerful reminder that justice, while slow and often costly, can prevail. It demonstrates how one individual's determination can challenge and change a system that has long protected institutional interests over human dignity.

For future workers facing similar injustices, the path to compensation is now clearer, thanks to one man's unwavering pursuit of justice. The case stands as a testament to the importance of perseverance in the face of systemic opposition and the potential for individual action to create lasting legal change.

While the personal cost to Adam Elisha has been immense, his legacy will live on in Australian legal history, protecting countless others from similar injustices in the future. Sometimes, it takes just one person standing up to transform an entire system.