It is common ground that a major cause of mental illness is workplace bullying and harassment. In a report published in 2016, SafeWork Australia noted that nearly one in ten workers had been subject to bullying in the workplace. Furthermore, SafeWork Australia highlighted the relationship between workplace bullying and a range of psychological health outcomes including anxiety, depression and PTSD.

Unfortunately, workers diagnosed with a psychological illness will face the daunting task of navigating the complex worker’s compensation scheme which provides insurers with a number of defences. The most common defence raised by insurers when declining liability for psychological injuries is contained within s11A(1) of the Workers Compensation Act 1987 (NSW). This section provides:

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.

The section provides insurers and employers alike with a “complete defence”. This means that if an employer is successful in proving that they have taken reasonable action, and that a worker’s injury was wholly or predominantly caused by that reasonable action, then no compensation is payable under the Act.

It is important to note that what is “reasonable” for the purposes of s11A is to be determined objectively. It will largely turn on the facts of the particular case and what the employer knew, or ought to have known, when they took the relevant action. The onus is on the insurer/employer to prove that the action they took, or proposed to take, was reasonable in the circumstances.

As disputes regarding s11A are based on the factual circumstances of the case, it is imperative that proper enquiries are made to establish the factual matrix that gave rise to the injury. Witness statements, internal investigations and independent medical reports need to be forensically examined to discern whether an employer has acted reasonably.

At Turner Freeman, we have decades of experience in investigating psychological injury claims and challenging the decisions of insurers to decline liability. Our team of lawyers include Accredited Specialists in Personal Injury Law who can help guide you through the workers compensation process.