On 31 March 2024, significant amendments to the WorkCover legislation in Victoria were introduced.

Under the new amendments, a worker will not be entitled to WorkCover compensation if their mental injury is predominantly caused by work related stress or burnout resulting from events that are considered typical or reasonably expected in the worker's duties, unless a worker suffers mental injury as a result of stress or burnout resulting from traumatic events considered usual or typical and reasonably expected to occur in the course of work duties.

Whilst stress and burnout are not defined and are intended to take their ordinary meaning, the Explanatory Memorandum provides examples including “typical job demands, workload pressures and interpersonal interactions.” Bullying, harassment and discrimination are not captured by this exclusion as these behaviours are not considered typical or reasonably expected to occur.

Stress or burnout injuries constitute a significant portion of current WorkCover mental injury claims. This exclusion will now disentitle workers to compensation for mental injury resulting from stress and burnout in the future.

Provisional payments for reasonable medical services are still payable for mental injury claims, irrespective of whether the worker has an accepted WorkCover claim. This means that workers who lodge a WorkCover claim for a mental injury may be able to receive up to 13 consecutive weeks of reasonable medical treatment for their claimed injury.

For detailed information regarding the WorkCover amendments, please refer to Changes to WorkCover laws by the Workplace Injury Rehabilitation and Compensation Modernisation Act 2023.

Work-related mental injury claims are on the rise, and those affected are increasingly seeking compensation to assist with the costs associated with recovery.

Your employer's insurer provides compensation to injured workers on a no-fault basis in the form of weekly payments, medical and like expenses and potentially a lump sum payment for any permanent impairment.

Claims for injured workers with a psychological injury can be difficult, and there are some hurdles you should be aware of.

Reasonable management action

Central to mental injury compensation claims is whether or not your employer acted in a 'reasonable' way when discussing your performance or making changes to your employment. These discussions include:

• Disciplinary action
• Potential termination
• Refusal to provide a promotion, pay rise or requested leave
• Alterations to your role; and/or
• The need for increased performance.

If it is found that your mental injury is caused wholly or predominantly by the following, your WorkCover claim will be denied and you will not be entitled to compensation:

• Management action taken on reasonable ground and in a reasonable manner; or
• A decision of your employer, on reasonable grounds, to take, or not to take, any management action; or
• Any expectation by you that any management action would, or would not, be taken or any decision made to take, or not to take, any management action.

If your employer is found to have behaved reasonably, but your mental injury was predominantly caused by other work-related factors, you still may have an entitlement to compensation.

Pre-existing injury or illness

If you have a pre-existing mental injury prior to commencing employment and later your condition becomes aggravated or deteriorates or you develop a new psychological condition, then this will be a factor towards how your claim is managed. For injuries on or after 31 March 2024, employment must be a predominant cause to the mental injury or the aggravation of a pre-existing mental injury. For mental injuries prior to 31 March 2024, your employment must be a ‘significant contributing factor’ to any aggravation of a pre-existing mental injury. 

Bullying and harassment

Workplace bullying is repeated, unreasonable behaviour directed at a worker or group of workers that creates a risk to health and safety.

To claim for a bullying injury, you need to provide specific examples of repeated negative behaviour that put your health and safety at risk. It will also assist you if you have made prior complaints about the behaviour and you are supported by witnesses.

Overturning a rejected claim

A difficult part of the WorkCover system is when someone puts in a mental injury claim and that claim is subsequently rejected.

There are a number of reasons why mental injury claims might be rejected and these include:

• You have not been diagnosed by a medical practitioner in accordance with the most recent Diagnostic and Statistical Manual of Mental Disorders (DSM) and does not cause you significant behavioural, cognitive or psychological dysfunction
• Your mental injury has not predominantly developed due to your employment and there are other non-work-related causative factors
• Your mental injury is predominantly caused by stress or burnout that arose from events that may be considered usual or typical and expected to occur in the course of your duties
• Your mental injury is caused wholly or predominantly by reasonable management action, as outlined above.

If your WorkCover claim is rejected, you have 60 days from the date you receive the rejection notice, to refer the matter to the Workplace Injury Commission (conciliation).

Types of lump sum compensation claims

Permanent impairment claim

If you have a permanent mental injury, you may be entitled to a lump sum payment of compensation. To be eligible, an assessment by an independent medical examiner must determine that you have a minimum whole person primary impairment of 30%. For example: a 30% primary psychiatric impairment rating for a date of injury occurring in financial year 2024/2025 will result in an offer of $100,500. 

Unfortunately, this assessment level is very difficult to achieve for most people as it requires demonstration of very severe ongoing symptoms when examined in accordance with the following mental functions: intelligence, thinking, perception, judgment, mood and behaviour.

Common Law

If you are determined to have a permanent and 'severe injury', you may be eligible to sue under common law for pain and suffering damages and in some instances economic loss. A claim must be made within 6 years from the date of injury.

With a psychiatric injury, establishing negligence can be very challenging. Even though you may suffer from a psychiatric injury and have an accepted WorkCover claim, this does not mean your employer has admitted negligence.

An employer’s duty of care to prevent workers from suffering a psychiatric injury is engaged in circumstances where it is reasonably foreseeable that a worker is at risk of developing a psychiatric injury. This test requires the worker to exhibit evident warning signs of psychiatric injury in order to put the employer on notice.

To succeed with a bullying case, you must establish:

• You were subjected to repeated unreasonable behaviour that creates a risk to your health and safety
• Your employer knew or should have known that you were at risk and did not take steps to eliminate the risk; and
• The bullying behaviour/s gave rise to a reasonably foreseeable and recognisable psychiatric injury. 

Sadly, many workers are either not aware that they are suffering from mental decline until they have a breakdown of some sort, or they are too scared to advise their employer about their condition. In terms of negligence, if an employer does not know there is a problem, then according to the law, how can they be expected to rectify it? The onus of proof heavily rests on the injured worker.

If you have suffered a psychological or physical injury arising out of your employment, it is important you seek legal advice regarding your entitlements. To arrange a free initial consultation to discuss your claim, contact our legal team on (03) 9321 9988 or submit an online enquiry today.