Stress-related workers' compensation claims

If you are suffering from a work-related stress injury, you may be entitled to compensation through Workcover and also by bringing a common law claim. Whilst Workcover is a ‘no-fault’ system of insurance payment to employees if they are injured at work, a common law claim is a ‘fault’ system where a claim for damages is brought against an employer if they were negligent in causing a worker to suffer an injury.

In this article we will explore the Workcover regime and whether these entitlements are available for mental health problems caused by stress. To find out more about common law claims, click here.

Factors such as high job demands, poor support and poor workplace relationships can adversely affect your mental health. Exposure to these hazards can lead to work-related stress, and when stress is high or prolonged, it can lead to psychological injury.

Stress related claims are becoming increasingly common. However, it is often more difficult to secure compensation for psychological injuries. If you believe you are suffering from a stress related injury, it is important to seek legal advice to understand your rights and entitlements.


Can I make a claim for a stress related injury?

If your stress related injury is caused or aggravated by your work then you may be able to make a WorkCover claim for compensation.

What do I have to prove to have a successful stress claim?

To make a claim for stress under WorkCover.

  1. First need to prove that you have a diagnosed medical condition which is classified as an ‘injury’. Seeking medical help early is very important – not only for your claim but for your health and wellbeing.
  2. Secondly, you must show that the conditions of the job caused the condition. This may include work pressures, bullying, sexual harassment or exposure to traumatic events. However, even if you can show a causal link between work and your condition, employers are protected if they can show that they took reasonable action.
  3. In order to access benefits under the WorkCover scheme you must notify your employer of your injury within 30 days.

Read on to see our case studies on Kelly the Kitchen Hand and Alex the Banker.

Case study: Kelly the Kitchen Hand

Kelly works in a restaurant called Health Hit, primarily putting final touches on dishes. The restaurant’s hit dish is called the Prawn Punch and Kelly as Health Hit’s sole kitchen hand, is required to place an intricate crown of woven kale leaves before the dish goes out to hungry patrons. Kelly persevered through the stress for a month until a customer sent back their dish complaining of how their crown kale leaves had collapsed. She had a meltdown in front of the staff and ran out of the kitchen in emotional tatters. Kelly saw her treating doctor after the incident who subsequently diagnosed her with severe stress disorder with anxiety and depression. Kelly informed her manager of her diagnosis straight away and went home feeling hopeful that appropriate action would be taken. After all, couldn’t they hire more kitchen hands?

For months, Kelly’s manager continued to tell her that Health Hit was not able to find an appropriate kitchen hand to help her with the finishing touches on dishes. To make it worse, they added another dish to the menu which required Kelly to handle a paper thin piece of chocolate to add to a dessert item.

Kelly is likely to be successful for a WorkCover stress claim since being the sole kitchen hand caused her illness. Further, Kelly notified her manager of her condition and there is no evidence that the manager took any action to reduce Kelly’s stress. By filing a WorkCover claim, Kelly was able to get her psychology sessions covered, and weekly payments for the time she took off work to recover from her illness.

Case study: Alex the Banker

For example, Alex has been accused of sexual harassment in the workplace by a colleague. Her employer investigates the allegation by interviewing Alex and other witnesses. The employer also gathers evidence, such as text messages and emails that may support the claim of sexual harassment and queries Alex about this evidence. Since the allegation is serious, Alex is suspended from work until the investigation is complete.

A few weeks later, the investigation concludes and finds that Alex was not at fault, and she returns to work. Alex used to love her job as a banker but now feels a wave of dread when she comes into work. She feels as though all her colleagues are whispering about her and is embarrassed to have been accused of sexually harassing her colleague. As a result of the stress of the investigation, Alex feels overwhelmed with her day-to-day and is unable to cope with her responsibilities.

Where an employee reports a claim of sexual harassment, the employer is obligated to investigate, and the employer is entitled to suspend the employee until the investigation is over. The employer’s actions in this instance constituted reasonable management actions. Therefore, unfortunately for Alex, since her employer carried out reasonable management action, it is unlikely she will be able to make out a successful stress claim.



What sort of compensation am I entitled to?

If you are suffering from a stress related condition which was caused or aggravated by your work, you may be entitled to:

  • Weekly payments
  • Medical and related expenses
  • Lump sum benefit for permanent impairment

Weekly payments, and medical and related expenses are available even if your injury has not stabilised. In other words, you may be able to access these forms of compensation even if your injury is not permanent.

On the other hand, in order to access a lump sum benefit for permanent impairment, you must be suffering from a permanent injury. Further, you must meet a whole person impairment threshold which is set at 30% for psychological injuries.

The amount of compensation you may be entitled to depends on your individual situation.  A lawyer with expertise in Workcover will be able to give you a good idea of your rights and entitlements after reviewing your situation.

Our lawyers have decades of experience in handling difficult cases and understand the unique nature of this kind of work. Contact one of our experts today on 9603 3000 for advice so you can stop worrying about financial restraints and focus on getting your mental health back on track.

For personalised and individual advice, we offer consultations to discuss your matter.

Please call Gordon Legal (Melbourne) on (03) 9603 3000 or our Geelong office on 5225 1600 to speak with a member of our team.

Given the current environment, we are providing consultations over the phone, Zoom, WebEx or Skype.

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