LawTalk Blog

I am depressed because of work issues and want to claim workers compensation?

Workers compensation stress claims

All too often clients seek legal advice after developing significant psychological problems as a result of workplace stressors. Sometimes workers feel that they have been bullied, harassed and victimised at work or sometimes they feel they have been unreasonably denied the chance of a promotion or other entitlements or that the work pressures are so high that they just can’t cope with the demands of the job.

Unfortunately, no one is immune to the consequences that can flow from these workplace issues, and workers regularly develop diagnosable psychological problems including anxiety, mood disorders, depression, adjustment disorders and even post traumatic stress disorder.

Sometimes the mental condition resolves on its own without the need to consult with a professional or take medication. In some situations, simply being moved away from the bully is enough for a worker to make a full recovery from their illness. But other times, the condition becomes so severe that it renders a worker partially or even totally incapacitated to perform their employment duties.

If a worker has to take time off work or seek medical treatment as a result of workplace stress, they should lodge a claim for workers compensation. This claim is made under the Return to Work laws which have been operational since July 2015. A successful workers compensation claim would entitle the injured worker to reimbursement for reasonable medical expenses and payment of income maintenance during their period of incapacitation.

"... in order to have a successful claim, the worker should demonstrate that they are suffering from a psychological condition or a disorder of the mind..."

Unless the psychological injury is so severe that the worker is categorised as ‘seriously injured’, the maximum entitlement to income maintenance payments is 2 years.

But in order to have a successful claim the worker should demonstrate that they are suffering from a psychological condition or a disorder of the mind – simply being ‘stressed’ or ‘upset’ may be not sufficient to lodge a claim for compensation.

Secondly, if the worker shows that they do indeed suffer from such a condition, they need to prove that work was “the substantial cause” of the development or the condition. Unfortunately, this is a higher threshold compared with the previous workers compensation legislation.

The implication with the word ‘the’ is that if the worker’s psychological injury has been caused by a combination of work related and non work related factors, the claim would most likely be rejected. For example, if the worker recently suffered the loss of a loved one, or went through a tough divorce, an argument could be made that work was not the substantial cause of the psychological illness.

The proper interpretation of ‘the substantial cause’ will likely be determined by the judiciary in due course through law suits on this very point.

But assuming that these first two elements are met (ie, the worker is suffering from a psychological/psychiatric condition and work was the substantial cause of the illness), the employer and/or Return to Work SA often rely on the defence that the illness resulted from ‘reasonable administrative action taken in a reasonable manner’.

If it can be shown that the illness did result from reasonable administrative action taken in a reasonable manner, the workers compensation claim will fail.

Workers compensation claims involving psychological injury are arguably the most difficult due to this particular legal defence.

Workers compensation is generally not payable to an injured worker if the psychological injury results from an employer’s reasonable decision to transfer, demote, discipline, redeploy, retrench or dismiss a worker. For example, if a worker becomes depressed because they were disciplined by their boss for constantly arriving at work late, they should not have a claim; it makes sense that their workers compensation claim should fail.

Furthermore, compensation is generally not payable to an injured worker if the employer makes a decision (based on reasonable grounds) not to award or provide a promotion, reclassification or transfer or benefit in connection with employment to the worker. Again, if a worker strongly believes they are entitled to a promotion, but do not receive one, and the employer acted reasonably, their claim would likely fail. The workers compensation system could not cope with the sheer number of claims that may result from workers upset from not being awarded a promotion.

Although the ‘reasonable administrative action’ defence is relied upon heavily by Return to Work SA and employers to reject claims, the scope of this exclusion is actually quite narrow. Importantly, to reiterate, the exception applies to ‘reasonable action taken in a reasonable manner’. This means that a worker’s claim should succeed if reasonable action is taken in an unreasonable manner. And also a claim should succeed if unreasonable action is taken in a reasonable manner.

Often a decision to discipline or dismiss a worker is the last stage in a long and complex history of workplace events. It is important to look at the entire chronology of workplace events to see if any of the actions were unreasonable, or whether the manner in which the actions were taken was unreasonable.

For example, a decision to dismiss a worker for poor performance might seem completely reasonable in isolation but if the worker’s poor performance was due to years of mismanagement, unreasonable work demands, etc, the worker may have a legitimate claim for their psychological injury.

Similarly, a worker may be legitimately disciplined for incorrect/dangerous use of machinery, and this discipline might cause a mental illness. If, however, the worker had never been properly trained in the use of the machinery even after repeated requests for training, they would likely have a legitimate claim.  

Given the complexity of psychological injury claims, it is important that workers compensation claim forms are completed correctly at the outset. An incorrectly completed form can have potential consequences for your claim in the future, so you should consider seeking legal advice even before lodging your claim form.

If you feel you are suffering psychologically as a result of workplace stresses, you should consult with your doctor immediately, and consider lodging a workers compensation claim.  You may also want to seek advice and guidance from an organisation that assists people with anxiety, depression and similar health issues; Beyond Blue may be of assistance.

If you require more information regarding lodging a claim, or if your claim has been rejected, please feel free to get in touch directly with today’s blog writer.


Please note, this Blog is posted in Adelaide, South Australia by Andersons Solicitors. It relates to South Australian legislation. Andersons Solicitors is a medium sized law firm servicing metropolitan Adelaide and regional South Australia across all areas of law for individuals and businesses.


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