Government guidelines for work-related psychological injury claims have been developed to provide a best practice framework to help business owners and employers manage these risks, directed by research and insights published by Safe Work Australia1.
Psychological health conditions are now the fastest growing cause of illness in Australia, making work-related psychological injuries a major concern for businesses. Psychological injuries tend to involve more time off work and can be more complex to resolve as multiple factors generally contribute to the employee's condition.
The Safe Work report is aimed at helping insurers and claims managers support workers experiencing psychological distress and to also help the individuals at risk.
Although psychological illness is more prevalent than most people might realise, with 45% of people aged 15 to 44 experiencing a psychological illness in their lifetime, according to Safe Work Australia data2, there is also stigma associated with these conditions.
Considerations around the stigma and perceptions of mental health must be made while dealing with cases where the employee has applied for workers compensation for a work-related condition involving psychological factors. The employee may be hesitant about disclosing the extent of their condition and may elect not to speak up, they may claim less than they are entitled to, and either return to work too early or take excess leave.
Their manager and colleagues may lack sensitivity in responding to them, or have limited understanding of their experience, which can lead to escalation of compensation-related claim costs, as these situations often lead to delayed reporting of cases, or perceptions of inauthentic illness, ultimately causing premature and/or delayed return to work.
However, the Safe Work Australia findings report that many organisations are integrating stigma reduction initiatives into other employee management activities such as diversity and inclusion, mental health and wellbeing and general organisational culture development.
Employers are recommended to have a formalised policy in managing mental health-related psychological injuries in the workplace to help set clear expectations about workplace behaviour and the expected behaviour and processes for colleagues, supervisors and managers to follow in dealing with a person suffering a psychological injury or illness.
Employees can apply for workers compensation for a psychological injury such as post-traumatic stress disorder (PTSD), provided they meet three criteria:
This means that their employment must be the main or a major contributing factor to the injury or illness. If the psychological injury occurred in response to a reasonable decision or action taken by their employer, the worker may not be eligible for workers compensation, since their response is not rational under the circumstances.
If an employee makes a compensation claim on a psychological basis the employer is obliged to undertake the following actions:
Some workers compensation schemes offer provisional liability that allows payments to be paid to the affected employee before a decision has been made about the employer's liability in the case.
This gives the employee access to medical treatment and reduces the stress they might experience while waiting for the decision of liability to be determined.
The Gallagher Workplace Risk team can provide support and advice to businesses dealing with psychological injury and related workers compensation claims. Our service offering encompasses everything from incident management and investigation, safety mentoring and training through to health and wellness programs, injury management and assessment services, hazard and risk profiling or highly configurable online safety management systems.
1 Taking Action: A Best Practice Framework For The Management Of Psychological Claims In The Australian Workers' Compensation Sector, SuperFriend, Safe Work Australia, accessed 15 Dec, 2023.
2 Psychological Response to Injury: Research to support workers' psychological responses to injury and successful return to work accessed 15 Dec, 2023.
Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient's industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers' control.
Gallagher publications may contain links to non-Gallagher websites that are created and controlled by other organisations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by Gallagher, as we have no responsibility for information referenced in material owned and controlled by other parties. Gallagher strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources.
Insurance brokerage and related services to be provided by Arthur J. Gallagher & Co (Aus) Limited (ABN 34 005 543 920). Australian Financial Services License (AFSL) No. 238312
