CASE STUDY

When Workplace Stress Becomes a Workers’ Compensation Matter

By Joseph Nunweek
Content Coordinator, Portner Press

A recent case, Hunter and Telstra Corporation (2015), highlights some important considerations in the area of workplace mental health.

The employer’s decision to reject a workers’ compensation claim for depression was overturned by the Administrative Appeals Tribunal of Australia, reinforcing the fact that employers cannot simply rely on an objective assessment of what constitutes an unreasonable workload for health and safety purposes.

The Facts of the Case

The applicant, Mr Hunter, had worked for Telstra for over 30 years, eventually reaching the position of project manager.  Between November 2011 and April 2012, he underwent a performance management process that ended in him receiving a written warning.  In 2013, he lodged a claim for workers’ compensation, describing his injury as a “major depressive episode”.

He attributed the condition to “intense and sustained ... Stress levels’, “long-term exposure to high workloads” and “volatile and mentally demanding work”.

In rejecting his claim, Telstra argued that Mr Hunter did not have a heavy workload.  Telstra provided evidence that it said showed other project managers coped with more work than Mr Hunter was asked to perform.

Additionally, Telstra argued that because Mr Hunter’s performance management amounted to reasonable management action, he was precluded from claiming compensation.

What was the Decision?

The Tribunal heard from the consultant psychiatrists about Mr Hunter’s condition.  The psychiatrists confirmed that Mr Hunter was affected by a major depressive disorder arising out of prolonged workplace stress, and that this disorder was likely to have developed from mid-2010 onwards.

Finding that Mr Hunter had indeed developed an injury from his employment, the Tribunal noted that it was not necessary that his workload was “objectively excessive”.  It was sufficient that Mr Hunter genuinely perceived he had a high and stressful workload.

Telstra’s argument that any psychological injury was the result of reasonable management action also failed, as it was established that Mr Hunter had already suffered the psychological injury nearly 18 months before that action was taken.  This meant it was not necessary to consider whether Telstra’s actions in managing Mr Hunter’s performance were reasonable.

The decision to refuse Mr Hunter compensation was set aside, and Telstra was also held liable for Mr Hunter’s court costs.

What Does this Mean for You?

This case confirms that courts and tribunals considering a claim for depression, stress or burnout will start with the question of whether a worker’s psychological injury was aggravated by their workplace – not with the question of how much work is too much.

As this and other cases show, an employer’s personal assessment of whether work circumstances contributed to a worker’s psychological injury will not count for much.  In reaching its decision, the Tribunal drew on an earlier Federal Court case, Wiegand v Comcare Australia (2002), which stated:

“If the incident or state of affairs actually occurred, and created a perception in the mind of the employee (whether reasonable or unreasonable in the thinking of others) and the perception contributed in a material degree to an aggravation of the employee ailment, the requirements…..are fulfilled.”

Generally, a worker will be able to make a successful claim due to the ‘no fault’ principle typically adopted by workers’ compensation schemes, i.e. a worker will be entitled to compensation if they cannot work due to a work-related injury, even if their employer committed no wrong.  Similarly, that issues or experiences outside work may also be affecting a worker’s psychological condition will not itself eliminate a worker’s right to claim worker’s compensation.

However, bear in mind that psychological injury caused by reasonable management action (such as disciplinary action or performance management) is not compensable, or otherwise in breach of health and safety laws.