Eligibility / compensable injuries

Overview

Psychological injuries often present unique challenges that are different from those faced by workers with physical injuries. Workers with physical injuries may also have psychological barriers that can impact recovery and return to work. Best practice case management begins with understanding this complexity while ensuring a worker feels empowered and supported throughout the claims process.

This guidance outlines how to adopt and tailor key evidence-based case management practices to achieve better outcomes. When adopted for workers with a physical injury this approach may help prevent secondary psychological injuries.

Note: This guidance is informed by the Safe Work Australia Taking Action: A best practice framework for the management of psychological claims in the Australian workers’ compensation sector (the Taking Action framework). The Taking Action framework provides “practical and evidence-based guidance to assist workers compensation insurers and case managers to better support workers with a psychological injury or who are at risk of developing one”. The framework deals with the important role of insurer and employer in a person centred case management process.

Workplace related psychological injuries

A worker can experience a psychological injury at work as a result of a specific event  or as a result of exposure to many events over time (for example, harassment at work). Some causes of psychological injury in the workplace may include:

• work pressure (work deadlines, organisational restructures, interpersonal conflicts, disciplinary actions or performance counselling)
• work related bullying or harassment
• work related trauma or violence
• poor environmental conditions
• remote or isolated work

Common work-related psychological injuries may include (but are not limited to):

• adjustment disorder or generalised anxiety disorder
• depression
• post-traumatic stress disorder

A worker may experience a range of symptoms, such as:

• depressed mood - sadness, pessimism, discouragement
• irritability
• anxiety - physical symptoms such as breathing difficulties, rapid heartbeat, sweating, aches and pains, headaches as well as fear associated with performing certain activities
• sleep difficulties, and resultant fatigue
• feelings of being overwhelmed and unable to cope
• cognitive difficulties, such as a reduced ability to concentrate, decreased motivation
• loss of interest in social/recreational activities which were previously considered enjoyable
• avoidance related to a specific event
• hyper-alertness
• re-living a traumatic event

Effective treatment and workplace adjustments should be tailored to the worker’s individual experience with their injury and any associated fears about returning to the workplace.

A work-related injury may also be the result of the exacerbation of a pre-existing psychological condition, where work was the main or substantial contributing factor to the exacerbation of that condition. In this situation the worker may have a good understanding of the impact the injury has on their activities of daily living (including work) and may be best placed to guide actions to assist their recovery.

Best practice approach to case management

As outlined in the Safe Work Australia National Return to Work Strategy 2020-2030, case managers who are responsible for triaging and managing claims require “soft skills (e.g. negotiation , supportive communication skills, empathy), knowledge of how to apply the principles of the health benefits of good work and the biopsychosocial approach, and the ability to coordinate and tailor the process and support to meet the needs of the worker”.

Successful return to work and health may be maximised when claims are managed end to end by case managers who act as a single point of contact for all stakeholders. The case manager should be committed to promoting recovery and tailor return to work strategies to mitigate barriers and meet the individual needs of the worker.

Best practice includes implementing:

• a person-centred approach to engage with the worker as an active contributor and collaborator to tailor treatment, recovery and return to work planning
• active listening and a supportive approach to engagement with the worker and employer
• a biopsychosocial approach to understanding the whole person, as biological, psychological, social/environmental factors are unique to each worker
• tailored work focussed treatment and workplace supports to meet the worker’s needs
• education and support for employers, for example promoting the health benefits of good work
• continuous collaboration with, and active management of providers to ensure a goal-oriented return to work focus throughout the claim
• strategies to identify those at risk of developing a secondary psychological injury and taking swift action to address barriers to recovery and return to work.

The insurer should establish the worker’s needs in relation to their individual experience, as this is an important first step to recovery and return to work. Using a biopsychosocial approach to understand the worker and identify challenges will inform support, treatment and return work strategies.

A worker’s psychological response to a perceived stressful event is unique. Two workers exposed to the same work-related event may not respond in the same way or experience the same symptoms and may respond differently to the same treatment.

Determining liability

‘Injury’ is defined in section 4 of the Workers Compensation Act 1987 (1987 Act) and means a personal injury arising out of or in the course of their employment.

A mere emotional impulse or nervous response such as anger, anxiety, frustration, grief or sorrow is not regarded as a psychological ‘injury’ for the purposes of section 4. However, a diagnosis using the Diagnostic and Statistical Manual of Mental Disorders is not always necessary (see State of New South Wales v Seedsman [2000] NSWCA 119).

Section 9A of the 1987 Act provides that no compensation is payable in respect of an injury (other than a disease injury) unless the employment was a substantial contributing factor to the injury. The contribution of employment to an injury needs to be ‘real and of substance.’ A substantial  contributing factor to an injury does not need to be the sole contributing factor.

Disease psychological injury

Various events experienced over time can result in the onset of a disease, including psychological injuries.

For disease injuries received on or after 19 June 2012, it will be necessary to prove that employment was the main contributing factor to the contraction or aggravation, acceleration, exacerbation or deterioration of the disease (section 4(b) of the 1987 Act). The test for exempt workers is a substantial contributing factor.

Outcome-focused decision making

Delays in determining liability, including decisions around approval for treatment and services and return to work, can result in poorer return to work outcomes (refer to National Return to Work Strategy 2020-2030). Insurers should determine liability at the earliest opportunity (see Standard of practice S3. Initial liability decisions - general, provisional, reasonable excuse or full liability and S4. Liability for medical or related treatment).

Liability decisions are to be determined based on the best available evidence, in accordance with the legislation, and without prejudice or blame. Provisional liability allows sufficient time to gather information (if required) while enabling access to early treatment.

The case manager should identify escalation points for decisions that require higher levels of authority or may be contentious.

Diagnosis

Section 11A of the 1987 Act provides that the use of the term “stress or stress condition” for the purpose of describing the worker’s medical condition on the certificate of capacity is not acceptable. In this instance, genuine documented attempts to contact the doctor should occur in order to clarify the diagnosis.

An initial diagnosis on the certificate of capacity may only be an interim diagnosis. The diagnosis may change over the course of management or be refined by the medical practitioner sometime after the claim is notified to the insurer. It is possible to commence treatment and return to work activities based on an interim diagnosis.

“For the purposes of treatment and return to work, two individuals may share the same ‘diagnosis’ but the way in which it impacts the individual, the recovery period, and the appropriate treatment may differ significantly” (refer to the Safe Work Australia Taking Action Framework, page 6).

“Clinicians describe the most important aspect of the general practitioner diagnosis was the opinion that work was contributing to the psychological injury. The role of diagnosis was seen to facilitate the provision of evidence-based treatment, but most stakeholders acknowledged that the diagnosis for someone with a psychological injury often changed over the course of management” (Work-connected intervention for people with psychological injuries).

Reasonable excuse

If the insurer applies a reasonable excuse to not commence provisional weekly payments or accept a claim for medical expenses, the insurer should consider providing the worker with information about how to access community-based treatment and financial supports while a liability decision is being made. The nominated treating doctor may be engaged to assist with support and referral. Claims are only to be reasonably excused in accordance with Part 2 of the Workers compensation guidelines (the Guidelines).

Making liability decisions

Even where a worker’s complaints may seem insignificant, if the events are real and the worker perceived those events in a particular way, this may support the finding of a compensable psychological injury. A worker’s perception of an incident or event that actually occurred is relevant. A worker’s perception of events was considered in Attorney General’s Dept v K [2010] NSWWCCPD 76.

If there is an actual event in the workplace, it does not matter that the worker’s reaction is extreme or irrational. However, a reaction that is caused by what the worker thought occurred but that did not actually occur is not compensable.

A decision about the need for a factual investigation should be considered carefully due to potential impact on the worker’s psychological health. Refer to Standard of practice S24. Factual investigations for more information.

Insurers should also consider the current mental state of the worker prior to surveillance, in particular the need for surveillance in the circumstances. Refer to Standard of practice S25. Surveillance for more information.

When arranging an independent medical examination insurers must provide a clear explanation of the purpose of the referral. When referring for the first time insurers should provide information to the worker about what to expect. Refer to Part 7 of the Guidelines.

If the insurer disputes liability for a claim, they should specify what grounds are being relied upon in the dispute notice, together with the factual and medical evidence relied upon to support the decision.

Psychological injury caused by reasonable action of employer – section 11A(1) defences

Section 11A(1) of the 1987 Act provides employers with a defence to claims for psychological injury occurring in the workplace. Section 11A(1) is only relevant if the worker establishes he/she suffered a work related psychological injury to which their employment was either a substantial contributing factor or the main contributing factor (sections 4 and 9A of the 1987 Act) and where the injury amounts to a psychological or psychiatric disorder (section 11A(3) of the 1987 Act).

Section 11A applies where the injury is wholly or predominantly caused by the reasonable action taken or proposed to be taken by or on behalf of an employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment, dismissal or provision of employment benefits to the worker.

The employer has the onus of proof in establishing each of these elements to be successful in the defence.

A. ‘Wholly or predominantly caused’

This requires an assessment of all the available evidence to consider the various causes and determine whether the employer’s actions were wholly or predominantly responsible for the psychological injury.

The terms ‘wholly’ or ‘predominantly’ are separate concepts. ‘Wholly’ is regarded to be the one and only cause.

In some situations, there may be various causes behind the development of a psychological injury. In these situations, 'predominantly' means the main or principal cause or that the relevant section 11A(1) elements were stronger and prevailed over other causes.

The employer must establish that the employer’s reasonable actions in relation to the transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits was the main or principal cause behind the worker’s injury. The Commission has held that 'predominantly caused' means 'mainly or principally caused by' (see Ponnan v George Weston Foods Ltd [2007] NSWWCCPD 921).

B. ‘Reasonable action’

The employer has to establish that the action taken or proposed to be taken by the employer was ‘reasonable’ in relation to any of the following:

• transfer
• demotion
• promotion
• performance appraisal
• discipline
• retrenchment or dismissal or
• provision of employment benefits to the worker

Determining whether an employer’s actions were ‘reasonable’ is a question of fact, not law, and is determined by an objective test (see Northern NSW Local Health Network v Heggie [2013] NSWCA 255). This includes a consideration of all the facts.

Determining whether conduct was reasonable includes:

• weighing the rights of the employees against the objective of the employment
• considering whether the conduct was fair (the action, and the way it was carried out needs to be reasonable)
• considering the facts known to the employer or that could have been ascertained by reasonably diligent inquiries
• focussing on the employer’s actions at the time, not a hypothetical analysis of what should have occurred
• looking at the entire process involved, including the actions leading up to and following the process
• weighing the consequences of the employer’s conduct against their reasons
• considering the full history of the employer’s dealing with the particular worker
• taking into account relevant procedure and policy documents, and if relied upon by the employer, were they reasonable?

Not all actions of employers, even if reasonable, will fall within section 11A.

Communicating decisions

The case manager should discuss the effect of the liability decision with the worker and employer, including impact on entitlements, evidence relied upon to make the decision, review process and any further actions (for example, if an insurer is waiting for an outstanding report the worker could assist the case manager to obtain it).

Insurers should ensure case managers are supported to have difficult conversations and can adjust their approach to the circumstances of the worker.

Employers continue to have injury management obligations under Chapter 3 of the Workplace Injury and Workers Compensation Act 1998, even if a claim for psychological injury is disputed. There are resources to assist employers to manage psychological health and safety risks and return to work. The SafeWork NSW Code of Practice: Managing psychosocial hazards at work has information on managing the risks to psychological health and can assist an employer to ensure the workplace is psychologically safe for the worker to return to work.

Effective communication

Transparent, regular and inclusive communication is important to facilitate positive working relationships, and to set clear expectations about the roles and responsibilities of all parties. These expectations should be documented in the injury management plan, the recover at work plan and reflected on the case file.

Communication should be clear and succinct. Workers with a psychological injury may experience feeling overwhelmed and helpless. Sometimes important information provided to the worker can be misunderstood, not heard or forgotten. The case manager should confirm the worker understands information provided and offer important information in a format preferred by the worker (for example, by email, text message, brochure and/or via a trusted support person).

Avoiding re-traumatisation

The insurer should be careful to avoid requiring the worker to describe any trauma they have experienced as this can lead to re-traumatisation and can increase distress for the worker. (Refer to Implementation of Early Intervention Protocol in Australia for 'High Risk' Injured Workers is Associated with Fewer Lost Work Days Over 2 Years Than Usual (Stepped) Care).

Establishing a communication approach

There is value in establishing a communication approach with the worker. This approach should be established early in collaboration with the worker and regularly reviewed.

A communication approach can assist case managers to promptly respond to the needs of the worker by predicting and preparing for events likely to result in avoidant behaviours that may impact a worker’s progress.

A communication approach may include:

• the names of key support people
• agreed frequency and method of contact between the worker and insurer (in the context of a worker's obligations to participate in the injury management planning process)
• the approach to disclosure and confidentiality in the workplace (for example, the name of a key support colleague/s, what information that may be provided to them, and who has permission to provide this information).

Disclosure

The manner and nature in which a worker chooses to manage disclosure of information about their injury in the workplace will be unique to each worker. Some may prefer that only information related to capacity for work be disclosed to the relevant supervisor. Others may have a preference to disclose particular information to selected colleagues to receive return to work support and reasonable adjustments (refer to Web-based decision aid tool for disclosure of a mental health condition in the workplace: a randomised controlled trial).

Some workers will prefer to manage disclosure themselves; others may seek assistance. Workers with a psychological injury may have to deal with the stigma associated with mental illness, so it is important that the discussion is guided by the worker and managed sensitively by the case manager. Disclosure preferences may change and should be reviewed and documented throughout the claim.

The agreed approach for communication and disclosure between the worker, insurer and employer should be included in the worker’s injury management plan and/or their recover at work plan.

Early planning for recovery and return to work

Optimum claim outcomes are associated with early positive engagement with workers, the implementation of a coordinated approach to return to work planning and provision of early treatment.

An analysis of return to work data as part of Safe Work Australia’s National Return to Work Strategy 2020-2030 found that “the quality of the worker’s interaction with the insurer has an influence on return-to-work outcomes, with a positive experience associated with a higher return to work rate. Likewise, treatment which has a return to work focus is associated with a higher rate of return to work.”

The injury management plan

A tailored injury management plan should be developed early. An ongoing coordinated approach will help maximise recovery and return to work outcomes for both the worker and employer. This approach includes:

• maintaining a focus on the physical and mental health benefits of good work
• appropriate assessment matched to the needs of the worker
• screening for biopsychosocial factors that may impact on recovery and return to work
• ensuring that the results of biopsychosocial screening are used as a basis for evidence-based intervention
• strategies to address any interpersonal issues
• promoting the engagement of a workplace rehabilitation provider at the earliest opportunity
• regular review of the plan, in consultation with the worker’s treating practitioners and the workplace rehabilitation provider (where engaged).

Refer to Standard of practice S12. Injury management plans for more information.

Person-centred approach to planning

Workers are more likely to achieve positive health, social, economic and recovery at work outcomes if the case management process is tailored to their individual needs. A person-centred approach can be achieved by:

• including the worker in planning
• encouraging the worker to talk about their goals and suggest their own solutions. Where a suggested solution is not possible, be clear about why and discuss alternative options with the worker
• adjusting the injury management plan based on worker needs using goal-directed activities
• personalising all letters, emails and other documents
• using respectful, open communication that considers the worker’s and employer’s primary language, cultural background and literacy skills
• promptly addressing barriers with the view to promoting recovery at work
• building relationships through negotiation and influence to achieve the best outcomes
• managing relationships with a view to motivating and empowering the worker, employer and treatment providers to accept their responsibilities as facilitators of recovery at work.

Facilitate early employer contact and support

Where appropriate, employers should be encouraged to establish early and ongoing contact with the worker. Research presented in the Return to work in psychological injury claims report (Safe Work Australia) found that employer support, early contact and assistance with lodging claims were the top three employer actions that positively influence return to work outcomes.

Evidence outlined in the Safe Work National RTW Survey 2018 indicates that workers with psychological injuries receive less contact from their employer than those with a physical injury, leading to a more negative claims experience, including more disputes, and lower levels of support. Safe Work Australia conclude that it is likely this occurs for two reasons:

1. employees with a psychological injury have lower levels of resilience, and may need or benefit from higher levels of support
2. employers and supervisors may be less confident in communicating with employees with a psychological injury. Insurers often take over this role from employers, but due to the existing relationship the worker has with their employer, the lack of contact from the employer can be perceived by the worker as rejection

Case managers may suggest that the worker and employer nominate a key contact at the workplace to maintain regular positive contact with the worker during any period of absence from work. The nominated contact person should establish early involvement, stay connected and plan collaboratively for return to work.

Resolving workplace conflict

Conflict in the workplace needs to be dealt with if it presents a significant barrier to return to work. Workplace conflict is a predictor of poor outcomes when a return to psychologically safe work is resisted by the worker and/or employer. Conflict should be identified as soon as possible and dealt with immediately by promoting positive workplace culture and mental health awareness and by connecting employers to mentally healthy workplace resources and training programs (for example, the SafeWork NSW Mental Health at Work website).

If attempts to resolve conflict are unsuccessful, consider alternative options such as return to work in a different part of the business or the use of a SIRA funded program to support temporary return to work with a different employer. Where it is identified that return to work with the same employer is not possible, planning for a return to work with a different employer should be commenced.

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Early treatment is essential to promote early return to work and will assist the development of positive relationships. Principles which guide the provision of effective treatment include:

• a focus on recovery and return to good work as the primary goal
• facilitation of work focused treatment in line with evidence-based research tailored to the worker
• an expectation that an objective assessment of whether treatment is achieving expected outcomes will be undertaken, and
• if treatment requests are declined, the worker and nominated treating doctor are advised as soon as practicable.

Treatment to manage symptoms of anxiety or depression can include medication, relaxation, systematic desensitisation, challenging negative thinking (for example cognitive behavioural therapy) and mindfulness. Evidence-based Psychological Interventions in the Treatment of Mental Disorders suggests that these treatments can be effective when associated with dealing with specific work related issues and can guide practical strategies to deal with issues in the workplace.

Support for recovery and return to work

There is considerable evidence that recovery at work is a key component of rehabilitation. In most cases, employers and workplaces can play a significant role improving the health and well-being of their workers by using psychologically safe work as part of their treatment and recovery.

Extended periods away from work can undermine work relationships and has been shown to lead to poorer return to work and health outcomes for workers. Feeling isolated from work colleagues and having unresolved workplace conflict negatively impacts the worker’s capacity to return to normal functioning, including productive work.

Person-centred approach to work design

A person-centred approach to work design involves:

• tailoring work activities according to capacity related to the psychological injury (see examples below)
• identifying suitable work adjustments to maximise inclusion at work
• disclosure of key information to enable support in the workplace (if preferred and consented to by the worker)
• workplace adjustments that are graded or gradually re-introduced, and
• monitoring the worker’s response as part of the return-to-work process.

Some examples of capacity related to psychological injury:

• Cognitive capacity (attention, memory, information processing)
• Interpersonal capacity (verbal and non-verbal communication, listening)
• Intrapersonal capacity (motivation, patience, flexibility, resilience).

Workplace supports and adjustments are an essential component of recovery focussed planning. These may include

• using supports which already exist for all workers in the workplace based on the workers needs and preferences, (for example workplace lifestyle programs and other workplace supports)
• establishing with the worker what (if anything) they are prepared to disclose to co-workers with a view to enlisting co-worker support if appropriate
• grading return to work based on time (short days/extra breaks) and/or tasks and other factors (least difficult/fear–evoking to more difficult/fear-evoking)

Supporting employers to help workers to return to a psychologically safe workplace

Psychological risks need to be addressed to enable a worker’s safe return to work and successful recovery. If risks are not addressed, workers may be unable to return to the same workplace. Employers may be directed to the People at Work website which outlines a risk assessment process and contains a validated and evidence based psychosocial risk assessment survey tool with benchmarking that measures psychosocial hazards and factors. A workplace rehabilitation provider can assist an employer to identify these risks.

Workplace culture and job demands have an impact on the level of psychological risk and whether it is safe for the worker to return to work. Where job and workplace adjustments cannot be made to facilitate an early return to work, SIRA funded programs may be considered to assist in achieving the return-to-work goal. There are a range of programs for workers and employers which enable the worker to remain with their employer or commence work with a new employer.

Barriers and strategies

The worker is most often best placed to identify their individual barriers to return to work. A collaborative approach between the worker and employer is an effective way to overcome barriers in the recovery journey.

The case manager should use the injury management plan as a tool to design strategies to address these challenges and maximise the opportunity for a positive outcome.

Identifying and mitigating the risk of secondary psychological injury

A psychological injury can result from the impact of a physical injury. Safe Work Australia’s Taking Action Framework makes the observation that sometimes the secondary psychological injury presents the main barrier to recovery and return to work. Good case management practices can help prevent the development of secondary psychological injury (refer to Multimorbidity and depression: a systematic review and meta-analysis).

People with a substantial or chronic physical condition are at a greater risk for developing depression, compared with people who have no comorbidities. Insurers should have procedures in place to:

• use an evidence-based biopsychosocial approach for accurate early identification of claims where there is an elevated risk of developing a secondary psychological injury.
• provide early support for workers who may develop a secondary psychological injury
• act quickly to implement reasonably necessary treatment and support plans to assist the worker and employer, delays can reduce the effectiveness of management strategies.

(Refer Standard of practice S13: Additional or consequential medical conditions).

Insurers may consider establishing a small management team for workers identified as having mental health issues to monitor treatment, rehabilitation, and return to work.

Strategies to address risk factors

Suggested strategies to identify and mitigate the risk of developing a secondary psychological injury may include:

• discussion with the nominated treating doctor for referral to an appropriate treatment or support service
• involvement of a suitably qualified workplace rehabilitation provider
• discussion with treatment providers to address concerns
• talk to the worker about strategies they may have adopted in the past.

Lump sum compensation for psychological injury

Section 65A of the 1987 Act distinguishes between primary and secondary psychological injuries and provides details of when lump sum compensation is not paid for psychological injury.

If a worker receives a primary psychological injury and a physical injury, arising out of the same incident, lump sum compensation is not payable for permanent impairments resulting from both the psychological injury and the physical injury. Lump sum compensation is only payable for the impairment that results in the greater amount of compensation payable.

See Insurer guidance GN 5.7 Permanent impairment for further information on lump sum compensation for permanent impairment.