The number of workers’ compensation claims being lodged for psychological injuries are on the rise, with claims being brought across all sectors of the community and across all industries.
Examples of behaviour in workplaces that increase the risk of psychological or psychiatric injury include:
The number of workers’ compensation claims being lodged for psychological injuries are on the rise, with claims being brought across all sectors of the community and across all industries.
Examples of behaviour in workplaces that increase the risk of psychological or psychiatric injury include:
(a) poor leadership practices and workplace culture;
(b) poor or no policies and procedures;
(c) work demands;
(d) inadequate support;
(e) bullying/targeted behaviour;
(f) vicarious trauma; and
(g) administrative/managerial decisions.
In short, if someone suffers a psychological condition because of their work, then they are entitled to compensation for that condition under the Workers Compensation and Injury Management Act 2023 (WA) (Act).
This is because:
(a) Compensation is available for a disease, or the recurrence, aggravation or acceleration of a pre-existing disease (section 6 of the Act).
(b) A psychological condition is a ‘disease’ (which is any ailment, disorder, defect or morbid condition, whether physical or mental and whether of sudden or gradual onset).
(c) Compensation is given for diseases that are contracted or recur or are aggravated, in the course of the employment, as long as the employment contributed to a significant degree to the contraction of the disease or the recurrence, aggravation or acceleration of the pre-existing disease.
It is a reasonably low bar to prove that worker is suffering from a psychological condition, especially because the criteria are so subjective. However, it is worth mentioning that mere sadness or grief or anger will not be enough to constitute a psychological condition that is a “disease” under the Act.
Once a worker has proved they have a psychological condition contributed to by their work to a significant degree, there is only one exclusion that applies to “defend” that claim. This is the “reasonable administration action” exclusion in section 7 of the Act.
There is not a “you brought this upon yourself” exclusion for workers who suffer a psychological condition because they are difficult to work with and alienate themselves from their colleagues, causing them to get anxiety about turning up to work because other people don’t like them.
Exclusion: reasonable administrative action
The Act excludes claims for psychological and psychiatric disorders which wholly or predominantly result from:
(a) reasonable administrative action taken by a worker’s employer; or
(b) a worker’s expectation of administrative action or a decision of an employer in relation to administrative action.
What is administrative action?
The Act gives this phrase an “inclusive” definition. This means that the Act gives examples of things that constitute administrative actions, without limiting the number of things that might be an administrative action. As Lindsay Lohan would say: “the limit does not exist!”.
The things that are specifically included are:
(a) appraisal of a worker’s performance;
(b) suspension, discipline, demotion, dismissal or retrenchment; and
(c) not obtaining benefits in relation to the employment such as being promoted, reclassified, transferred or granted a leave of absence.
Examples of actions that don’t appear in the list, but have been found to be administrative actions are:
(a) job plan discussions (Buck and Comcare [2012] AATA 327); and
(b) an employer attending at an employee’s home to collect a medical certificate and discuss welfare supports (Kennedy and Comcare [2013] AATA 696.
Some interesting questions arise around when this exclusion will and won’t apply:
(c) When the employer’s conduct was not administrative action: Case law in other states suggest that there is a difference between an administrative action and an operational action. An administrative action typically affects (at a higher level) the nature of the relationship between the worker and their employer, whereas an operational action is something that relates more to the granular day to day activities and way that work is performed. Stress caused by operational actions is compensable.
(d) When the employer’s conduct in relation to administrative action was harsh or unreasonable: Where the exclusion would otherwise apply but the administrative action is found to have been unreasonable and harsh on the part of the employer, the employer can still be held liable for the worker’s resulting psychological injury. This involves an inquiry about whether due process was followed and if the outcome of the action was reasonable in all of the circumstances. If a person was summarily dismissed for a typing error, that would probably be harsh and unreasonable.
(e) When the administrative action is not the whole or predominant cause of the injury: Even if the administrative action is one cause, and even if it is a significant cause of the injury, if there are other contributing factors (work related and non-work related), then the exclusion doesn’t apply.
Even though there is only one exclusion in the Act, that does not mean there is only one bases upon which an employer can question liability for a psychological injury claim.
Other reasons an employer might dispute liability are:
(a) If the worker’s symptoms are not serious enough to constitute a “disease”.
(b) If the worker says that their injury was caused by particular events, or duties or actions of others – but there is no corroborative evidence to prove those things occurred.
(c) If there are multiple different potential causes of the worker’s psychological condition – both work related and non-work related – and it is not clear if the employment is a significant contributing cause or not.
Where an employer/its insurer has declined to accept liability for a psychological injury allegedly sustained in the course of a worker’s employer, the worker may choose to ask for WorkCover WA to determine the issue of liability.
The following issues are likely to be aired in the course of arbitration proceedings:
(d) To convince an arbitrator that the employer should be held liable, the worker will need to establish that the employer’s conduct was a significant contributing factor to the contraction of the psychological injury. Of note, when the legislation refers to the word “significant”, it means “not insignificant”. In other words, the contribution must be material: Mokta v Metro Meat International.
(e) To an extent, the worker also has to prove that the conduct alleged occurred. However, sometimes it is enough for the worker to prove that they perceived a certain state of affairs and that their perception caused them to suffer a psychological injury. In this context, the worker establishes an entitlement to compensation if they can establish on the balance of probabilities that their subjective reaction was due to objectively proven facts. However, it is not necessary for a worker to prove that their subjective perception of proven facts was reasonable (Weigand v Comcare), or that a person of normal fortitude would have suffered the same reaction: Pilbara Iron Company (Services) Pty Ltd v Suleski. For example, if a supervisor raises their voice at a worker to make sure they are heard over other voices in an office, and a worker perceives that their supervisor is angry at them and that causes them to suffer anxiety – that may be enough to establish a compensable injury.
(f) The worker also bears the onus of proving that a potentially excluded matter (or the expectation of a potentially excluded matter), as set out in section 7 of the Act, is not wholly or predominantly the cause of the stress is on the worker: Granitto v Catholic Education Office .
(g) Similarly, the onus of establishing that the employer’s conduct in relation to an excluded matter was unreasonable and harsh also lies on the worker:
“The obvious purpose underlying the exclusion is to prevent the bringing of claims for compensation as a consequence of stress-related diseases that wholly or predominantly arise out of specified incidents of the employment relationship which, by their very nature, are particularly stressful, but which are not harsh and unreasonable on the part of the employer.” FAI General Insurance v Goulding per Steytler J at [39]
(h) Where a worker’s psychological injury arises out of their expectation in relation to an excluded matter or the employer’s conduct in relation to an excluded matter, there is no scope for a consideration as to whether or not the employer’s conduct was harsh and unreasonable: McPherson v State Print.
(i) In FAI General Insurance v Goulding it was also held that, where a worker has suffered a recurrence, aggravation, or acceleration of a pre-existing disease which was contributed to by their employment, the employer was unable to rely on a defence pursuant to section 5(4) of the then Workers’ Compensation and Injury Management Act 1981 (1981 Act). The reasoning behind that finding was that the disease could not then have been said to have been wholly and predominantly caused by stress.
The reasonable administrative action exclusion provision in the 2023 Act is yet to be considered in any published decisions in WA. We will keep you updated as to relevant determinations as they are published.
This article was written by Ash Glasson Senior Associate | Insurance & Risk