Psychological injuries as a result of work are significant workers compensation claims, however there is a potential defence for employers to prevent psychological claims.
The Workers Compensation Act 1987 states at section 11A, “No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.”
There are three main elements of the test. Firstly, that the injury was wholly and predominantly caused by work. Therefore, if there were other extenuating circumstances, which may have been the cause of the injury, then the injured worker is not successful with passing this test.
Secondly, whether the actions fall under a transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal.
Thirdly, what is considered reasonable action by the employer will depend on the facts of the case. For example in the case of Northern New South Wales Local Health Network v Heggie  NSWCA 255 it was noted that when considering what is reasonable, the employer is not required to consider everything; they are only required to consider the facts that are known to the employer at the time or could be known with reasonable diligent inquiries.
In the case of Green v Secretary, Department of Regional NSW  NSWPIC 37, Member Snell reviewed each element of the test and while she found the first two elements were satisfied, the third element of reasonableness was not. The employer failed to reassure the worker’s concerns in relation to a transfer and therefore the employer’s actions were not reasonable.
If you have suffered a psychological injury as a result of work and the insurer has denied the claim based on section 11A, or you are an employer with an employee that has suffered a psychological injury, please contact our office to speak with one of our IRO approved solicitors because Helping You is Our Business.
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